Hackett's Much-needed Stock Boost Is Nowhere in Sight

Steph Willems
by Steph Willems
hacketts much needed stock boost is nowhere in sight

It’s generally agreed that former Ford CEO Mark Fields was shown the door after failing to turn around the company’s steadily declining stock, but his successor hasn’t had any success on that front, either.

Jim Hackett took over in May of 2017 and, despite an ongoing cost-cutting program and numerous new model (and technology) promises, Ford’s share price shows no lift. Wednesday’s earnings call was easily the worst of Hackett’s tenure.

As Bloomberg reports, no member of the Detroit Three went unscathed yesterday. Headwinds in China, rising commodity prices, and new tariffs took a bite out of earnings, with all three automakers adjusting their annual profit forecasts downward.

Ford had the worst showing. Revenue from its automotive division fell by $1.2 billion in the second quarter of 2018, with Europe and especially China posing a major problem. Both regions saw a combined loss of nearly half a billion dollars. Chinese Ford sales fell by 25 percent over the first half of the year, and it’s worth noting that the country’s retaliatory tariffs only took effect this month.

While Hackett claims his $25 billion-plus streamlining plan continues to “take hold,” investors weren’t happy to see profit per share fall to 27 cents — below expectations. That’s half of what Ford saw in Q2 2017. On Wednesday, Ford’s share price dipped to a 52-week low, flirting with the $10 mark.

According to CNBC, Ford’s head of global markets, Jim Farley, called the overseas results “unacceptable,” while CFO Bob Shanks forecasted more pain in the months ahead. The United States’ tariffs on steel and aluminum will likely cost the company $600 million in profit by year’s end, he said. In a statement, Hackett said, “We’re clearly committed to redesigning and restructuring the underperforming parts of our business.”

An investor meeting scheduled for September is now off, with no word on when it will be rescheduled.

Adam Jonas, analyst at Morgan Stanley, wasn’t reassured by what he heard. He got into it with Hackett after the CEO stayed tight-lipped on the company’s restructuring.

“I really do hope you can reconsider the communications strategy, because it’s just not good enough, Bob,” Jonas said. The analyst, no doubt thinking of Fields, asked Hackett if he expected to still have his job by the time the investor meeting rolls around.

“Hell yes, I expect to be in front of everybody declaring where we’re going and what we want to get done,” Hackett replied. “There should be zero question around that.”

[Image: Ford Motor Company]

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  • V16 V16 on Jul 26, 2018

    Outside of the current F Series, what vehicle in the Ford lineup is considered category leading? The stock price is a negative answer to the above question.

    • DenverMike DenverMike on Jul 26, 2018

      Mustang. Stockholders are frightened, as they should be when they watch FOX NEWS.

  • Akear Akear on Jul 27, 2018

    For the first time since the recession Ford's stock is in the single digits (9.86usd). The shocking announcement that Ford was cancelling their entire carline was seen as a desperate not strategic move. It was suppose to prop up Ford's stock price, but has done just the opposite. With Fields in charge Ford had a decent lineup of cars and trucks. Now Hackett has made Ford into a one trick pony that will be almost totally reliant on trucks and SUVs. The next scenario to this sad story is once loyal dealerships will be leaving Ford for greener pastures. This is the one car company that is should be on a dead watch. Please no more stories praising Fords one dimensional truck line. I am sick of F-150 stories. One successful product does not make a company. Besides GM sells far more trucks and SUVs than Ford does. They are also still selling cars.

    • See 2 previous
    • DenverMike DenverMike on Jul 27, 2018

      @DeadWeight "3X3" is 3 patties, 3 cheese slices, for those wondering. I've had a 4X4 (their biggest) but at one time, there was no limit and would pile them on as high (laying on it's side) as you wanted! Animal Fries are great too. But how dare they "break out" of the traditional, written in stone, fast-food, burger joint, 90 damn things on the menu, business model? If they were a Wendy's or something, and decided out of nowhere to narrow their entire menu to just burgers and fries, stockholders would freak the hell out! And rightly so. What do you think would happen to stock prices? Toyota, Nissan, Honda couldn't do what Ford is doing, and really have no reason to. They have a stronghold on sedans/coupes/subcompacts, but definitely couldn't live off their "trucks" alone. Toyota, Nissan, and Honda are like the McDonald's, Jack in The Box, and Burger King of the new car scene.

  • Zerocred So many great drives:Dalton Hwy from Fairbanks to the Arctic Circle.Alaska Marine Highway from Bellingham WA to Skagway AK. it was a multi-day ferry ride so I didn’t actually drive it, but I did take my truck.Icefields Parkway from Jasper AB to Lake Louise AB, CA.I-70 and Hwy 50 from Denver to Sacramento.Hwy 395 on the east side of the Sierras.
  • Aidian Holder I'm not interested in buying anything from a company that deliberately targets all their production in crappy union-busting states. Ford decided to build their EV manufaturing in Tennessee. The company built it there because of an anti-union legal environment. I won't buy another Ford because of that. I've owned four Fords to date -- three of them pickups. I'm shopping for a new one. It won't be a Ford Lightning. If you care about your fellow workers, you won't buy one either.
  • Denis Jeep have other cars?!?
  • Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
  • Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI coupe....it's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark V.....it was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
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