By on November 1, 2017

All-New 2018 Ford F-150 - Image: Ford

At a Detroit Economic Club event held last night in the Motor City, Blue Oval Chairman Bill Ford opined that Ford Motor Co. may have been too forthcoming with Wall Street in past years.

“In the past, maybe we said too much,” Ford said Tuesday.

In a report from Bloomberg, Mr. Ford is quoted as saying the company with his name on the building is trying to provide clarity without tipping their hand in key competitive areas. “The key is providing clarity when we’re ready [emphasis mine] so that investors can make an informed decision.”

This brusque assessment of Wall Street comes on the heels of analysts downgrading their rating of Ford stock just days after new CEO Jim Hackett told investors it’ll take time to for him to turn around the company. According to Bloomberg, which tracks recommendations of certain analysts, five moneymakers suggest buying Ford shares, while nineteen rate them a hold. Two advise selling. Perhaps they were affected by the door latch recall.

Bill Ford went on to say, “This is a very competitive world we’re in. You want to give Wall Street enough information, but you also don’t want to telegraph exactly where you’re going. And I think that’s a balance that we are going to continue to work on.”

Alrighty then. Safe to say the Glass House won’t be sending any cards or brightly wrapped gifts to Wall Street this December.

This new tight-lipped policy is undoubtedly a response to the market’s persistent pessimism of Ford, despite the Blue Oval beating analysts’ earnings expectations every quarter so far this year. This is without mentioning the roughly $40 billion in cash Ford is reported to have lying around.

How has Wall Street rewarded Ford’s good performance? With a stock price mired in the $12 range, down 2.5 percent, year-to-date. Meanwhile, GM is up nearly 20 percent in the same timeframe. Tesla continues to mystify by reaching stratospheric stock market heights, despite its current inability to turn a profit making cars.

Sure, Ford could stand to do a few things in a speedier manner, such as bringing the Ranger and Bronco to market in order to tap hot segments. Ford is not exactly in turmoil, though, so Mr. Ford’s annoyance at Wall Street is largely justified, in this author’s opinion.

Investors seem to buy into the narratives they want to hear, and whatever they’re hearing right now about Ford, they don’t seem to like — despite Ford being profitable for ages and having enough resources to walk its own path. Perhaps Mr. Ford could take a page from Sgt Dignam in The Departed who, when asked about disclosure, opined, “Treat them like mushrooms. Feed ‘em shit and keep ‘em in the dark.”

[Image: Ford Motor Company]

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43 Comments on “Ford to Wall Street: Drop Dead...”


  • avatar
    stingray65

    What do Tesla, Uber, Twitter, YouTube, Netflix, and Instagram have in common? Answer: They are all part of the “new economy” which seems to mean not ever needing to earn a profit while getting wildly inflated market valuations. Its got to be tough to be a Ford or P&G that actually earns profits quarter after quarter, have well loved products that sell in the millions, and have flat or declining stock values.

    • 0 avatar
      deanst

      Instagram is owned by Facebook, which makes a ton of money; YouTube is owned by Google, another hugely profitable firm.

      The problem for Ford is history and the economy – the economy will turn, and profit margins will disappear. Ford makes all its money on pickups – and there is a limit to how many more they can sell, and how much higher they can inflate prices. 96 month loans anyone?

      • 0 avatar
        SD 328I

        That makes some sense, but the F150 has consistently been the best selling vehicles in the Unites for Decades, even in the height of the last depression and $5 gas, it was still the best selling vehicle.

        If that’s the case, what is the explanation for GM?

        • 0 avatar
          EBFlex

          Please show me the F-150 sales numbers that show it’s the best selling vehicle for decades.

          • 0 avatar
            Art Vandalay

            There is this tool…Google I want to say it is called. Use it and quit being a clown.

          • 0 avatar
            EBFlex

            “There is this tool…Google I want to say it is called. Use it and quit being a clown.”

            Yea Google does not have any links showing me the Ford press releases that detail F-150 sales. So again, prove your assertion.

      • 0 avatar
        stingray65

        deanst: Instagram and YouTube were never profitable when they were purchased at greatly inflated valuations by Facebook and Google, and I’ve never heard any reports that they were contributors to the profits of either.

        Your argument against Ford is also wrong. Sure Ford is making big profits from trucks, and a slow-down in the economy could impact those profits, but at least they are making a profit. Tesla has also been in the “sweet” part of the market the last few years, but have never earned a profit, why would we expect them to do better in a downturn – are you assuming people without jobs are going to start wanting to buy over-priced electric cars?

    • 0 avatar
      tylanner

      This is an industry in transition…and Ford may be behind the curve when compared to the vision and trajectory of its competition.

      The general consensus suggests that the future of automotive design will be tied to the development of hybrid/electric power-trains, integration of autonomous technology and powerful infotainment features.

      Quite simply, Ford needs better engineers and more of them.

      • 0 avatar
        deanst

        Ford needs to do something bold, like enter into a partnership with Honda to do all their 4 cylinder gas engines, and redeploy the engineers to electric drive trains. Ford can’t make a reliable, competitive 4 cylinder engine anyway, so it would be a win-win proposition.

      • 0 avatar
        MrGreenMan

        Ford may be squeezed financially, but they’ve had some foresight on these things you say they have lacked foresight on. If you may recall, Ford invented the same hybrid system at almost the same time as Toyota, hence the big patent war over hybrid technology, and the limitation that Ford could only sell the Escape Hybrid and not a car hybrid while Toyota held its monopoly. For infortainment, however much you may hate Sync, it was pretty forward-looking at the time to partner with Microsoft to build in-car infotainment…right idea, wrong partner, as Microsoft flamed out in their attempt to make a phone.

        • 0 avatar
          Kyree S. Williams

          From what I understand, the only parts of SYNC1 (the voice-activated, non-infotainment system) and SYNC2 (My Ford / MyLincoln Touch) that Microsoft developed were the speech recognition system. MyFord / MyLincoln Touch was built atop Windows CE, but the fact that it’s a crappy system isn’t Microsoft’s fault; Ford built it poorly.

          I agree with you. Ford is a forward-thinking company. But it seems they do make too much profit on the F-Series.

          That said, it seems like GM has an equally-high dependence on truck profits, so I’m not sure why their stock is being treated differently. Maybe it’s GM’s continual efforts to decrease its fleet sales; I dunno. And the Tesla thing beggars belief.

          • 0 avatar
            nvinen

            What’s so bad about Sync2? I have it in two vehicles and it beats the pants off the systems I had in my previous two Hondas, my dad’s Volvo and my mum’s Audi. It has the occasional glitch but most of the time I find it works very well.

          • 0 avatar
            brn

            nvinen,

            Ford was early to the mass market with a graphical infotainment system. As such, they had some growing pains that the others did not experience. Even though it evolved into one of the best systems on the market, the automotive press was unable to forget the early days.

            It became popular and acceptable to slam Sync2, so they didn’t stop. By the time Ford gave up on it, it’s only issue is that it’s a little sluggish. Beefier hardware would have solved that.

            It’s too bad this had to go this way. If Ford was able to put the resources into improving Sync2 that they put into creating Sync3, it’d be incredible.

          • 0 avatar
            DavesNotHere

            Kyree, I worked on Sync 2, and in fact, Microsoft was the Tier 1 for the Infotainment system, so your statement isn’t exactly accurate, because Microsoft were directly responsible for the Infotainment system software dev and integration. They wanted to be a Tier 1, but WinCE was a poor platform to build on, and in typical Microsoft fashion, everything had to be done in their idiosyncratic way. Ford did have a hand it building it poorly as well, by choosing to build it on top of the previous front-end codebase, which contained a lot of spaghetti code and overbuilt functionality.

        • 0 avatar
          sgtjmack

          That’s why Ford is buying Toyota’s older hybrid system for their hybrid cars. Because they decided that Toyota can do that better than they can and don’t need to copy the Toyota design. Remember, Ford is known to rip off other inventors and companies and get away with it because they have high paid lawyers. But in this case, they met their match.

    • 0 avatar
      I_like_stuff

      Ford should rename itself iFord. Them every quarter when it loses $1B, its stock goes up 15%.

    • 0 avatar
      Advance_92

      Every 5-10 years Ford lurches from being a global company with global products to a global company with a separate US market. They’re just not consistent enough for investors.

  • avatar
    EBFlex

    That’s Ford’s attitude towards their customers too!

  • avatar
    YeOldeMobile

    Wall Street has always been full of sharks, from the days when it was a single room where stocks were called up individually by the auctioneer. However, watering stocks is the norm these days and you’d be roundly mocked if you said that stock prices should be based on the fundamental performance of a business.

    If Ford really, really wanted to raise their stock prices they could focus on stock buybacks instead of investing in R&D. Or raise their dividends so that there’s more demand for F. Otherwise, they’re just at the mercy of the market, and the market is STUPID.

  • avatar
    tomLU86

    Since the USA is so deeply in debt (government AND individuals), the future is going to be “poorer”.

    Our virtual toys, as well as virtual telephone operators, are a way of dealing with this.

    Technological improvement can grow the economy, but not enough to cover our whopping indebtedness, not to mention the increasing lack of natural resources like clean water and oil.

    The “electric, autonomous future of automotive design” will reflect the average person’s static or reduced standard of living by limiting their freedom of transportation. This won’t be felt by the top 2%, but it will be keenly felt by the bottom 40-70%.

    Electric and autonomous are hugely expensive. They can’t make it without targeted govt subisidies.

    Ford and P&G make things people buy freely, and the make money doing so without the mega-big subsidies (they just get the ‘standard’ subsidies, like tax avoidance and tax breaks that most corporations enjoy, but the 90% do not).

  • avatar
    PrincipalDan

    Sure, Ford could stand to do a few things in a speedier manner, such as bringing the Ranger and Bronco to market in order to tap hot segments.

    Gee, ya think? This is quickly becoming Ford’s “Camaro” – tease tease tease until you feel like the thing has been on sale for 3 years before the first one hits dealer lots.

    • 0 avatar
      Advance_92

      You’ll know it’s about three years out when it shows up in a “Transformers” movie.

    • 0 avatar
      Adam Tonge

      They’ve been pretty clear on when these products are coming out. 2019 Ranger and 2020 Bronco. They announced both coming to the US market in Jan 2017. Both should be available under three years from that original announcement.

      • 0 avatar
        nvinen

        Why does it take so long to bring a vehicle to market that has already been on sale (and very successful) in other markets for years? Sure it will require some tweaks for NA and crash testing, emissions testing and so on but surely 90% of it is already there and sorted.

        • 0 avatar
          Lou_BC

          @nvinen – the term used is “technical barriers to trade”.
          Different jurisdictions have different safely and emissions requirements which require engineering design changes. Very few countries have 100% unencumbered reciprocity.

          Another thing to consider is the fact that different countries have different tastes in vehicles.

        • 0 avatar
          Scoutdude

          This is not the Ranger that has been on sale for years in other markets. It is an all new truck as the other one has reached the end of its life cycle and it wasn’t worth setting up the line and tooling for a vehicle that would have only had a 2 year life cycle.

  • avatar
    I_like_stuff

    Ford should focus on making Trucks. Despite the hoopla about electric cars, it’s still less than 1% of the market. And it’s 2 completely different sets of buyers. Very few people are deciding between a F150 and Tesla3 or Prius.

    So this idea that Ford has to abandon trucks because the industry is shifting to EVs is ridiculous. This nonsense comes from people who live in Palo Alto and Los Gatos, and other than their pool guy, have never seen a truck up close.

    • 0 avatar
      DenverMike

      It doesn’t have to be one or the other. Dollars to donuts Ford is busy prototyping or testing an electrified F-150. Or bringing back the EV Ranger.

      Everything points to this. Aluminum F-series, the Ranger coming back, and Ford holding off on EV car investment? Having just 1% of F-series “electric” would have the max CAFE impact for Ford, vs EV car offerings.

      Fleets, utilities, industry, etc, have very little use for an EV car anyway. Same with most consumers.

    • 0 avatar
      raph

      They can’t afford to ignore the EV market. In a scant 15 years or so if you don’t have a hybrid and EV line-up anywhere outside the US your going to be a niche player at the international level.

  • avatar
    JohnTaurus

    Not sure how you can infer “drop dead” from what he actually said, more like “proceed with caution about what we say, and to whom we say it”.

    Maybe Ford needs to lose money instead of making it. Obviously that’s what investors think is a deserving business model.

    I don’t see how they can blame Ford for not embracing Hybrids or autonomous technology, they’ve been pretty heavily invested in both. No, they don’t have an EV yet (the Focus compliance car doesn’t count), but its not as though the market for them is guaranteed. They’re also planning a Model E, and Hybrid F-150 and Mustang.

    If quality were the issue, why would Tesla enjoy such high values? The only reason is Ford is seen as a dinosaur, despite much evidence to the contrary.

    • 0 avatar
      Lou_BC

      Unfortunately the stock markets want to make money on “bubbles”. Artificially inflate the stock value even though the business has nothing of substance to offer. Tesla is a prime example.

  • avatar

    Since we’re talking about the domestic auto industry, around Detroit it was Gordie Howe who coined the phrase “Mushroom Treatment” to describe the position the Detroit Red Wings gave him after he retired for the first time. He chafed at being a figurehead with no real authority as he watched the team decline under the ownership of the Norris family (this was years before Mike Ilitch bought the team). He described the Mushroom Treatment as “You know, they kept me in a dark room and every once in a while they’d throw some manure on me.” With his laconic rural Saskatchewan accent, the way he said manure, with three sylables, only added to the punchline. As a farmboy, Gordie had first hand experience with manure.

  • avatar
    MrGreenMan

    Take it private.

    • 0 avatar
      cartunez

      Agreed no reason for Ford to be a public company in this current environment.

    • 0 avatar
      brn

      Not a terrible idea. I’ve worked for privately owned companies, family owned companies, publically owned companies, and in the public sector.

      The worst was the family owned company (it’s amazing what money and greed can do, when a small group is fighting over a couple billion dollars). Close to the bottom was the public company (way too focused on today’s stock price).

      The best was the private company, as they focused on the long term. Public sector wasn’t too bad either, as they focused on doing the right thing. Biggest problem in the public sector is trying to work with an excessive number of rules.

  • avatar
    its me Dave

    So I should spend my money on Ford stock so they can put it in the bank with the rest of the $40B in STA? I can do that all by myself. These car companies should go back to the strong emphasis on dividends, and let the market price adjust around that.

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