Another Ford Recall: Is CEO Farley on His Last Legs?

By Douglas A. McIntyre Published May 25, 9:10AM EDT

Key Points

Ford Motor Co. (NYSE: F) is facing another major recall, this time involving 270,000 Lincoln Navigators and Ford Expeditions, highlighting persistent quality control failures.
CEO Jim Farley continues to face criticism over ongoing product issues and large recall-related financial charges, raising questions about leadership effectiveness and board accountability.
Despite strong truck sales, commentators suggest Ford may be a value trap for investors due to operational mismanagement and stagnant long-term performance.

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Another Ford Recall: Is CEO Farley on His Last Legs? — © 24/7 Wall St

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Transcript:

[00:00:04] Doug Mcintyre: So Lee, we’ve got another Ford Recall. Yeah. 270,000 Lincoln Navigators and Ford Expeditions. The Ford family and Farley, the CEO said to the Wall Street Journal two, three years ago that. The, that was the big monkey on their back recalls and that they were getting hit with these huge charges, every quarter.

[00:00:26] Doug Mcintyre: And they still are. The problem is, that hasn’t gone away. The CEO keeps saying, we’re gonna fix it. We’re gonna fix it. The CFO says, Oh, we’re sorry. We have several hundred million dollars in charges this quarter because of, and it just goes on. It’s another example of why this is the worst run big car company in the world by far.

[00:00:49] Doug Mcintyre: And Bill Ford and the Ford family, they won’t get rid of Farley. It’s a joke.

[00:00:54] Lee Jackson: Yeah, it’s funny, they’ve never been shy about getting rid of good CEOs in the past or bad ones, so I don’t know why they wouldn’t be prepared to make a move. Now,

[00:01:05] Doug Mcintyre: the only CEO they had, it was any good under Ford’s tenure was Alan Mulally who came up, right?

[00:01:11] Doug Mcintyre: Boeing, and he was great. Everybody else, bill Ford has put into those jobs. they’re just jokers. It’s and that’s why there’s churn. It’s time to churn this guy out. Yeah. And hopefully find somebody who can look, I know it’s a big company, but you’ve got to be able to get product quality.

[00:01:29] Doug Mcintyre: And I always wonder how is it that if your number one goal is the quality of your products, why can’t you get, Just get to the level GM’s (NYSE: GM | GM Price Prediction) at, you don’t have to get to Toyota’s level, just,

[00:01:43] Lee Jackson: Yeah, absolutely. like we’ve talked about to our viewers and readers for some time now, they dominate truck sales in the United States and there’s, I have now determined there is 8,000 different versions of the F-150 and two 50 and holy cow, I mean there’s the King’s Ranch.

[00:02:02] Lee Jackson: There’s this one, there’s that one, focus on your key products. And again, I think you mentioned, that the recalls were for navigators and, big SUVs. It’s who in the heck owns the a navigator anymore?

[00:02:19] Doug Mcintyre: They’re used as limousines now that they’ve discontinued the old town cars, which, I don’t get.

[00:02:25] Doug Mcintyre: The town car seemed to me to be a perfect both family sedan and. Yeah. And

[00:02:31] Lee Jackson: fake. Yeah, absolutely.

[00:02:34] Doug Mcintyre: So if you’re a billionaire and you have a driver taking you around and a navigator, I think you’re gonna take think twice. Maybe you need to get an Escalade,

[00:02:43] Lee Jackson: I guess so. there’s one thing for sure is that, he may be on his last legs regardless of what Bill Ford says, because you know there’s gonna be a point when the board starts banging the table.

[00:02:55] Doug Mcintyre: Yeah, so anyway, it’s, I don’t want to beat a dead horse ’cause we get to do it all the time. But it’s just another example of why Ford is, the worst of the big car companies and we harp on it over and over again. But unless you change management, you’re not going to, What’s that old saying? You keep repeating something,

[00:03:16] Lee Jackson: Oh, the, definition of insanity.

[00:03:18] Doug Mcintyre: Yes. Yes.

[00:03:19] Lee Jackson: Expecting a different outcome.

[00:03:21] Doug Mcintyre: Yes. Okay. Sorry. There we go. So

[00:03:23] Lee Jackson: I think that’s about right. All right. We’ll, keep an eye on this. The one thing that our, viewers should remember is, it’s not going to zero, but it’s likely a value trap. And you’ll get in there thinking, okay, I got a big dividend, and it can go higher and it’ll sit there and trend lower and so I’d be careful with that one.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.