By on May 11, 2017

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As anticipated, Ford CEO Mark Fields was grilled today over his plans to improve the company’s waning fortunes by board members who had scheduled extra time to question him.

Hot topics at the annual meeting centered on why profits are falling, what is Ford doing about the market shift toward SUVs, and how the company’s colossal investments into technology are affecting its present-day financial situation. Ford has poured billions into self-driving vehicles and ride-sharing platforms as its traditional car business loses some ground to General Motors in a slowing U.S. market. Fields spearheaded Ford’s rebranding as a mobility company, but many have suggested this future-focus isn’t healthy for the brand.

Fields stuck to his guns, emphasizing that Ford was heading “aggressively but also prudently” into “the biggest strategic shift in the history of our company.” 

That didn’t appease major shareholders, however. After posting a none-too-shabby pretax profit of $10.4 billion in 2016, the automaker anticipates a less impressive $9 billion for 2017 — which it admits is largely due to massive investments in technology.

The company’s stock price has also trended downward since July of 2014, while General Motors’ has remained much more stable. But the assumption was that Ford’s emerging identity as a tech-first mobility brand would energize shares à la Tesla Motors — which holds a higher market value, despite not turning a steady profit.

This has resulted in plenty of bent out of shape investors, some of whom speculated Ford’s virtual shareholders meeting was intentionally set up to avoid face-to-face confrontation. However, the company answered 27 questions this year, compared to last year’s nine. It also said it would eventually answer the “remaining pertinent questions” online. Ford also managed to reach more investors by going digital.

According to Automotive News, 59 individuals were in attendance at last years meeting. This year, Ford said 147 shareholders took part via their computers, with an additional 203 guests — mainly media — logging on.

Still, complaints persisted. Ford shareholder John Chevedden called the event a “horrible retreat into a foxhole for the company,” suggesting upper management was essentially “hiding in Dearborn in the basement.” Other interested parties continued their assault on the brand’s investment choices and financial well-being as the market stagnates — even though Ford was the only domestic automaker to avoid bankruptcy in the last recession.

You have to feel a little sorry for Mark Fields, who seems to have nothing but the company’s long-term success in mind. It would be easy to imagine investors equally angry if Ford simply ignored emerging technologies, provided its share price was the same.

“If things stay the way they are for another 12-to-24 months, Mark [Fields] could be under even more scrutiny,” said David Whiston, an analyst with Morningstar. “Whether that’s fair or unfair, it won’t even matter at that point. The board will just want to see the stock go up.”

One person Fields had in his corner was Executive Chairman Bill Ford Jr. “We’re as frustrated as you are by the stock price,” Ford said at the meeting, stating the company “continues to succeed in the present, even as we build a foundation for greater success in the future.”

[Image: Ford Motor Company]

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34 Comments on “Fields Defends Ford’s Honor in Tense Shareholders Meeting...”


  • avatar
    SCE to AUX

    “future-focus”… Clever.

    I wonder how Ford (or any mfr) connects the dots between self-driving vehicles/ride-sharing platforms and revenue/profits.

    Point 1: People want this stuff and will pay for it. Counterpoint 1: People will avoid this technology and not buy it or use it.

    Point 2: Regulations will eventually require AV technology, and insurance companies will reward its use.
    Counterpoint 2: Litigation will limit AV deployment, possibly exposing mfrs to expensive legal claims.

    Point 3: Regardless of market interest or liability issues, mfrs need to develop the best AV technology they can muster.
    Counterpoint 3: It will be cheaper to simply wait until costs come down, and license someone else’s technology. Why reinvent Sony Betamax?

    • 0 avatar
      benders

      The commercial sector will be the first to embrace it because they can reduce their labor expenses. Doesn’t matter what “the people” want because it will increase the boss’s bottom line.

      States have already been known to make exceptions for autonomous vehicles testing would likely continue to keep big employers like Ford happy. There have already been a few proposals floated about insulating the vehicle manufacturer from autonomous vehicles liabilities.

      And finally, there’s no guarantee that anyone would license technology for a reasonable cost. If GM is the first to market, why would they sell to their competitors when they can use it to expand market share and profitably?

  • avatar
    phila_DLJ

    “what is Ford doing about the market shift toward SUVs?”

    Ford sells the Escape, Edge, Flex, Explorer, and Expedition, along with the Transit Connect Wagon and, soon, the Ecosport.

    HOW MANY MORE UTILITIES DO THESE SHAREHOLDERS WANT???

    • 0 avatar
      FreedMike

      More…MORE………..MOAAAAAAAAAAARRRRRRRRRRRRRRRRRRRRRRRRRRRRRR

    • 0 avatar
      Asdf

      What the shareholders should have asked Ford instead was how it intends to deal with the SUV backlash in the marketplace once it inevitably arrives. But perhaps that’s too far-sighted for most shareholders, since the backlash probably won’t manifest itself already during Q2 or Q3 of this year.

    • 0 avatar
      RobertRyan

      @phila_DLJ
      Maybe ones that sell Globally rather than in the US. Ford / Gm lag behind many companies in this regard. I cannot see Ford moving up from their 7th placing Globally unless they do.

    • 0 avatar
      EBFlex

      “HOW MANY MORE UTILITIES DO THESE SHAREHOLDERS WANT???”

      Maybe they just want good ones…

    • 0 avatar
      SuperCarEnthusiast

      With the exception of the Expedition; all are crossover vehicles. Ford could of continued with the Bronco like they did in Australia but chose to discontinue it and let Land Rover Defender and Jeep Wrangler, G Wagon, EJ, etc… take up the slack! Now, Ford said it will take another 3 years to bring the Bronco back? Three years?

  • avatar
    Bazza

    How about trying “Quality is Job 1”, and mean it?

    NAAAAAHHHHHHHHHHH….

  • avatar
    zip89123

    Ford should be raking in the dollars, as one must remove the dash to replace a cabin air filter and remove the front bumper to replace any light bulb. All that aside, a higher quality vehicle would help Ford’s long term outlook. Signed, a Ford owner who Ford forgot about once the car left the dealer lot. I like my Ford, but some BS I can do without.

  • avatar
    dwford

    You can tell from Ford’s lineup that investment in model redesigns has been postponed so money can be spend on autonomous and EV tech. The new models are coming, but they should have been here already.

    This is a risky time for the automakers. If they don’t invest in the emerging tech, they could beltway behind in 5-10 years. If they do invest, there is no guarantee of a payoff down the road. And autonomous tech will mean fewer sales down the road, as car sharing becomes more common. So they are essentially investing in tech that makes themselves obsolete. Not a great business model and why the stock is going nowhere.

  • avatar
    Scott_314

    Personally I think we’re starting at a hit product in the Australian Ford Ranger.

    If they would freaking bring it here before 2019.

    • 0 avatar
      dwford

      Yeah. It dies seem like the new product has been pushed back a couple years. At least Ford is smart enough to keep their mouths shut about it, unlike FCA.

    • 0 avatar
      RobertRyan

      @Scott_314
      They have done well with the Thai built Ranger. Currently testing the 2.7 and 3.5 Ecoboost engines and the 3 litre V6 Lion Diesel in Australia.

  • avatar
    EBFlex

    For the most part, this is all Big Als doing. His business model of “short term gains, long term losses” is starting to rear it’s head.

    Letting your product rot on the vine because you want to develop a baby’s crib or a mobility app isn’t smart. Ford is in the business of making automobiles….not figuring out way to get people out of automobiles.

    • 0 avatar
      toxicroach

      Yeah mate, that’s how you get Blockbuster’d.

      You don’t want to cannibalize your business by getting ahead of the curve, you just let someone else eat you alive.

    • 0 avatar
      RobertRyan

      @EBFlex
      Everyone was praising Mullally when he was CEO, but I thought he was leading Ford down the garden path.. Now many are doubting the wisdom of ” Big Al”

      • 0 avatar
        JimZ

        http://www.urbandictionary.com/define.php?term=Some%20Argue

        “many” is nothing more than a weasel word.

        • 0 avatar
          RobertRyan

          @JimZ
          How about a lot think Ford is going downhill rapidly.
          He seems to be following ” Big Al’s ” distaterous reorganisation of the Company.
          Things like this will get them nowhere.He forgot to add ” biggest strategic shift downwards for our company”
          “Fields stuck to his guns, emphasizing that Ford was heading “aggressively but also prudently” into “the biggest strategic shift in the history of our company.”

          • 0 avatar
            highdesertcat

            RobertRyan, I sure hope that Ford is not going downhill. It’s the only American car maker we have left.

            These turnabouts are cyclic. But the trouble and strife emanating from Washington DC do not instill confidence in people that their lives will be better in the future.

            And consumer spending drives sales and the economy. Sales of even the other lame products that Ford puts on the market besides pickup trucks.

            IMO what hurts Ford is that they really only have ONE product — pickup trucks.

          • 0 avatar
            RobertRyan

            @highdesertcat
            Where the US has many Pickuos not sold anywhere else. Ford is in a precarious position.

          • 0 avatar
            highdesertcat

            RobertRyan, the history of the pickup trucks in America goes back a long, long way, all the way back to the horse-drawn cargo wagons of the pilgrims, pioneers and settlers, Prairie Schooners, Conestoga wagons, and on.

            Necessity was the mother of invention.

            A rich history, thus. What set these historic wagons apart, and what sets today’s pickup trucks apart, is that they were designed for work and built beefier and girthier than people movers.

            As such, American pickup trucks are not sold in many markets outside of the US.

            It’s kinda like a national trade-mark vehicle that Americans like to affiliate with.

            So I hope that Ford will be able to keep their line of trucks as best sellers and cash cows.

            I don’t mind if GM becomes Chinese or whatever, because they already died. Chrysler is no more, so no big deal.

            But Ford? Ford’s the only American automaker left.

            And the precedence has already been set in 2009; so if Ford goes under even President Trump will bail them out and nationalize them like GM was.

            Congress would not have it any other way.

  • avatar
    fiasco

    Best stock move I ever made: buying F at $1.87. Worst stock move I ever made, buying more at $16.00 after it dropped like a rock from $18.50 or so with no reasonable explanation.

    • 0 avatar
      highdesertcat

      You need to diversify your beta-risk over a wider array of automotive stock, if that is your chosen investment segment.

      Even Warren Buffett made some exuberantly optimistic buys that disappointed him, like IBM.

      What the Oracle loses in one, he makes up in spades elsewhere.

  • avatar
    Syke

    The problem here is that nobody knows where the auto industry is going. If you ignore self-driving tech and spend all you money on current crossovers, crossovers, crossovers, you’re going to keep the shareholders happy this quarter, but possibly hurt yourself badly (if not fatally) in the long run.

    Spend too much on self-driving tech, you’re guaranteed to piss off the shareholders now (because no matter how good a return you give, they want better), but you could be setting yourself up to be in the catbird seat years or a decade from now. Unfortunately, shareholders are invariably short term stupid. Nobody buys stocks for the long run – except the smart investors who usually don’t go out of their way to bitch, piss and moan.

    Or, you could be wrong following either path, as the market influenced by forces that nobody sees today, goes in a direction that neither of the aforementioned two alternatives fit well (gas skyrocketing, making electric cars profitable?).

    The only thing we know for sure is that hindsight is incredibly cheap. And ten years from now, everybody here will happily pontificate on every single last tiny mistake Ford made this year and next, while of course none of us have the slightest clue to come up with the necessary answers right now.

    I couldn’t never be a CEO of a shareholder owned corporation. I’d be bounced out of my job within a month for telling the shareholders what whiny self-centered little brats they are. Oh yeah, I do own investments. They’re approximately 40% of my retirement income.

    • 0 avatar
      JimZ

      “I couldn’t never be a CEO of a shareholder owned corporation. I’d be bounced out of my job within a month for telling the shareholders what whiny self-centered little brats they are. Oh yeah, I do own investments. They’re approximately 40% of my retirement income.”

      Tim Cook has done something like that.

  • avatar
    xcalibur255

    “what is Ford doing about the market shift towards SUVs”

    Seriously? This is a legitimate concern for shareholders? People honestly think Ford lacks for selection in the SUV market? With the Expedition redesign and the EcoSport coming there is no visible light in the gaps between their lineup.

  • avatar
    Mullholland

    Silly shareholders! Fields should have told them that a new totally redesigned Lincoln Navigator will arrive this summer.


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