By on November 16, 2018

It’s no surprise to anyone reading this site that the suits on Wall Street are unimpressed with Ford’s attempts to haul itself out of the proverbial financial basement. With a recent downgrade by Moody’s to near-junk status, the Blue Oval needed to reassure the money mavens that the company is on track for success.

That’s not what happened at a recent presentation made by Joe Hinrichs, Ford executive VP and head of global operations, at Barclays Global Automotive Conference in New York earlier this week. Despite a 25-minute talk supported by a 21-slide PowerPoint deck, investors were left wanting more information.

In the words of one economist who listened to the speech: “Rarely have I heard so many tired old buzz words that told us so little.”

Yikes. Them’s harsh words, ones which are found in a report from the Detroit Free Press. At the Barclays event, Ford spent time defending its recent decision-making, which includes the purchase of a train station and scooter company. From the Freep:

After a 25-minute presentation, investors told Hinrichs they wanted more detail.

He said the current redesign effort by Ford is the most fundamental he has seen in his 18 years with the company. Yet the first investor who asked a question said it was “a very good presentation” but a listener “would have thought” Ford would have done “all of this for the past 10 years already. What is the reason it took so long?”

Hinrichs responded, “Just recognize that I presented at a high level intentionally. Details are competitive. We don’t want to give away our secrets. … You’re right, this is part of manufacturing and Auto 101.”

The criticism continued into the post-presentation Q&A session:

Another audience member told Hinrichs he gave “very little detail in terms of how exactly it’s going to play out.”

Hinrichs acknowledged the feedback and responded, “We have the details in our mind.  … We’re not ready to talk about them.”

An audience member noted that Ford is “significantly underperforming” its competitors in South America, Europe and China.

“Our business model needs to be restructured in South America,” said Hinrichs

Give Ford and Hinrichs some credit here. At least they didn’t bat away the criticism or ignore questions.

As an example of its efforts on the road to financial fitness, Hinrichs showed a slide detailing a production decision they’ve made on the upcoming 2020 Explorer. Currently, there are 139 different side-view mirrors available on the SUV, he said. This presumably includes all combinations of colors, blind spot monitoring, signal light repeaters, and so forth. In 2020, that number will be slashed to just 25, thanks to a decision to paint all of them black and include the CoPilot 360 safety suite on all trims.

Like a group of kids who want their old headmaster back, a lot of folks are wishing that Alan Mulally would once again occupy an office in the Glass House. There is little chance this will happen (though anything is possible in the auto industry), but that hasn’t stopped people from asking his opinion.

In a recent Automotive News story, the retired CEO is quoted as saying Ford “will figure it out” while speaking at an industry conference in Arizona. This is largely the same statement that parents make while watching their children flail about during their first year living away from home.

Look, you guys and gals know I’ve personally spent more of my own hard-earned money on the Blue Oval and their associated brands than any other manufacturer. I’m rooting for their success – partly because of my affection for their past products and partly because healthy competition makes for a better auto industry overall – more than most.

But the corporate line lately has essentially been “we have plans but we’re not ready to tell you yet,” which is a dandy proclamation to make around the dinner table while talking about family vacation plans but a poor statement when one is trying to turn around public perception of a large car company. It’s fine to say this in the short term – no one wants to give away too many of their secrets – but the public needs something, anything, to assure us that Ford is doing more than buying train stations and creating “energy rooms.”

Who knows? Maybe it’ll all become clear in January when top brass roll out Bronco and Mustang sub-brands on stage in Detroit. Let’s hope so.

[Image: Ford Motor Company]

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30 Comments on “Side Mirrors and Tired Buzzwords: Ford Gets a Rough Ride at Wall Street Meeting...”


  • avatar
    cimarron typeR

    Hopefully it will include a 4 dr 5.0L Mustang with black mirrors

  • avatar
    dwford

    More and more Ford’s protestations that they have a “plan” are sounding like FCA’s multiple 5 year plans that never panned out.

    What do we know for sure is coming (that we’ve seen with our own 2 eyes):

    New Explorer and Aviator
    New Escape and MKC
    EV crossover
    Mustang GT500
    Bronco and Baby Bronco

    Did I miss anything? Any other prototypes running around Dearborn?

    • 0 avatar
      Steve203

      “Did I miss anything? Any other prototypes running around Dearborn?”

      Yes, the four door Mustang I saw driving down Oakwood by the Ford Museum several weeks ago.

      “More and more Ford’s protestations that they have a “plan” ”

      The thing is, Ford has put a price on their plan: $11B for “restructuring”, but nothing about what is being restructured. Ongoing product development, like any company should be doing, is not “restructuring”.

  • avatar
    James2

    I’ve said it before but will repeat it. Ford needs to go private, because even when they were bringing in 10 digits worth of profit during and after the Mulally years Wall Street’s response was Meh. Why would anything be different now?

    • 0 avatar
      Steve203

      The Street’s response to Ford is always going to be “meh” because of the control the Ford family wields.

    • 0 avatar
      SPPPP

      I don’t like what Ford is doing product-wise, but I would like to see them show a little swagger once in a while. Something along the lines of “We’ve paid you a consistent dividend for the last 15 quarters, even as the stock price dropped, and we have more cash on hand now than we did last year at this time. So what more do you need to know?”

      • 0 avatar
        Steve203

        “So what more do you need to know?””

        Little things like “why is Ford being hammered in China, the largest car market in the world?” “what are you going to do about your poor results in Europe and Latin America?”

  • avatar
    Steve203

    Hackett has been CEO for a year and a half. He had been on the BoD since 2013. He still says he needs time to get his arms around the situation? Bah! I used to work for a Steelcase dealer when Hackett ran Steelcase. I didn’t think much of his management style then. Don’t think much of his management style now.

    • 0 avatar
      dwford

      Yeah, what situation is he struggling with? He inherited a product plan with the entire next generation of Fords already developed and pending production. All he had to do was execute it. Instead, he scrapped everything and now has some mystery plan he isn’t ready to share after 18 months. By the time he reveals his plans, all the new Fords could’ve been on the market and selling for several years. Instead, he has sent huge numbers of buyers to other brands, with no plan to keep them.

      • 0 avatar
        Steve203

        “He inherited a product plan with the entire next generation of Fords already developed and pending production.”

        He is doing the same thing Marchionne did at FCA: eliminating all the low priced/low profit margin products, because higher transaction prices and higher margin per vehicle is what Wall St wants to see. I note the irony that this strategy is exactly the opposite of what Henry Ford used to make Ford the largest automaker in the world in the early 20s: make cheap cars, with minimal profit margin, and sell them in vast quantity.

        • 0 avatar
          danio3834

          ” I note the irony that this strategy is exactly the opposite of what Henry Ford used to make Ford the largest automaker in the world in the early 20s: make cheap cars, with minimal profit margin, and sell them in vast quantity.”

          This is merely a footnote. When the industry was young and there were few real competitors, it was easy to control the market and profits, even at a company that was ineptly managed as Ford was in that era. This is particularly true when there were next to no regulatory requirements to satisfy.

          Things are much different now with many viable competitors and regulatory issues squeezing all the margin and then some out of low priced products.

          Car companies used to be money mints when there were a few that had free reign of the market. Now they can’t afford any loss leaders.

          • 0 avatar
            Big Al from Oz

            danio,
            Remember all vehicle manufacturers are confronted with the same regulatory challenges. So, this is not the issue at Ford.

            Ford has not publicly recognise the fact that the F Series cost them massive amounts. This must be paid down. Ford has mentioned over the past couple of years that commodity prices were affecting their bottom line, but all manufacturers face the same commodity impost, like regulatory costs.

            It’s more the structure of how Ford operates is inefficient. There cars were okay, they are just more expensive than most competition.

      • 0 avatar
        SPPPP

        This is an interesting point. Even if the products were profitable in only a small way, selling those cars at a small margin is better than selling no cars at all and introducing your customers to your competitors.

        • 0 avatar
          Steve203

          ” Even if the products were profitable in only a small way, selling those cars at a small margin is better than selling no cars at all and introducing your customers to your competitors.”

          I don’t think Wall St sees it that way. The thing for a few decades now has been “right sizing”, ie shrinking companies to only their most profitable endeavors. Thank Jack Welch, who decreed that he didn’t want GE to be in any field where it wasn’t #1 or #2, and also decreed that the bottom ranked 10% of the work force be terminated every year. So now the thing is to delete your least profitable thing. That makes something else your least profitable thing, so delete that, which makes something else the least profitable thing, and so on. Hackett would probably be delighted if he could carve Ford down to two factories: the one making Mustangs, and the one making Navigators. This process has worked so well for GE (/sarcasm)

          • 0 avatar
            HotPotato

            Glad you added the /s, since it turned out that Jack Welch was a charlatan and GE’s money nearly all came from its GE Financial unit, which specialized in high-interest loans. And the stacked-ranking employee evaluation thing also ended up proving a disaster for teamwork and morale; Microsoft also used it and that explains why it has managed to fail in new ventures when it has all the resources in the world to succeed.

        • 0 avatar
          sportyaccordy

          The reality is, in the US, Ford was giving customers the margin on the small cars to keep them. That makes no sense. And because their image with cars is so terrible, there’s no easy fix. They made the right call.

          Don’t forget the Fiesta and Focus have been redesigned and launched in Europe. So I’m not sure what he scrapped

  • avatar
    genuineleather

    Wow, so innovative to extend non-body color trim pieces from the fleet specials to the high margin blingmobiles; customers will be thrilled! The company is saved! Quality is job one!

    • 0 avatar
      HotPotato

      Yeah, the whole thing doesn’t even make sense. Like, can’t you just have a mirror cap that’s painted with everything else and snap it onto said plain black mirror, so your Ford Extinction Platinum doesn’t look like a Ford Extinction S? It smacks of stupidity.

  • avatar
    happycamper

    My complaint about Ford is the forget to redesign vehicles and they go stale.

    My whole neighborhood is full of current generation Explorers, which has been made since 2011. Most people do not want to buy a new vehicle that is exactly the same as the one sitting in their neighbor’s driveway for 7 years. Do you think current owners are going to buy the exact same vehicle when their lease is up or they replace it?

    Same thing for the Escape, Edge, Flex and all of their passenger cars. Ford waits too long to redesign and people’s interest disappears.

    • 0 avatar
      SCE to AUX

      “Do you think current owners are going to buy the exact same vehicle when their lease is up or they replace it?”

      Great question. A: No.

    • 0 avatar
      EBFlex

      “Do you think current owners are going to buy the exact same vehicle when their lease is up or they replace it”

      Depends if the vehicle is desirable. In the case of the Explorer….probably not.

    • 0 avatar
      danio3834

      Customers need a reason to re-up. The average new car buyer keeps 5-6 years which happens to be about the average product cycle. No coincidence.

      Some generations are kept fresh enough with the right amount of product actions to keep their customer base interested. ie. Challenger.

      Others hit a certain niche of customers that replenish but probably won’t re-up. ie. Dodge Journey

      In the case of the Explorer, it’s been a hot segment with strong demand and they’ve been able to stretch the product cycle without losing too many sales. But it’s now the end of the road for this design which truly dates back to the Ford Freestyle/Taurus X.

  • avatar
    mike978

    Ford should have reduced the build combinations years ago. An example is the Focus where if they had just simified build options (to something like the Civic sedan) they would have saved money and maybe stayed in that market. Another example is the fiesta ST that has four standalone options (Recaro seats, sunroof, nav and black wheels). They should have done an ST and ST2 range to hslve options.

  • avatar
    pdog_phatpat

    You could try having some patience. Waiting a week and running another story about how bad Ford is failing doesnt help things. Youre pushing people into the failure camp. You guys act like “well I waited forever(a month maybe), and Fords done nothing I want it to do so it must be closer to dead”. Stop acting like a kid where “back in the day” means last week. Things take time.

  • avatar
    Rich Fitzwell

    I’ll write it again, who cares what Wall Street says about anything, these clowns value Amazon at $799B, yes I know the arguments, but Amazon has made a total of $2B IN TOTAL PROFITS since 1996-you can look it up.

  • avatar
    sportyaccordy

    The reality is, in the US, Ford was giving customers the margin on the small cars to keep them. That makes no sense. And because their image with cars is so terrible, there’s no easy fix. They made the right call.

    Don’t forget the Fiesta and Focus have been redesigned and launched in Europe. So I’m not sure what he scrapped

  • avatar
    forward_look

    Any color mirror you want, as long as it’s black.

  • avatar
    forward_look

    Any color mirror you want, as long as it’s black.

  • avatar
    Big Al from Oz

    Ford is in a pickle, the biggest issue confronting Ford (and GM and to a slightly lesser degree FCA) is it’s organisational structure and it’s processes.

    Ford has layers of management and processes that need elimination. Culture and the institutional culture of empire within Ford will not allow it to change fast enough.

    I have had an experience with my Mazda BT50, which is a Ford Ranger with different sheet metal. I had an issue that couldn’t be resolved at the Dealer so I complained to Mazda on line. Mazda sent an engineer out to look at my vehicle. He made a decision then and there on the repair and repair processes.

    I was talking to him and he said luckily it’s not a Ranger as the issue I had would of taken months for a decision to be reached. I asked why and he stated the damage would of been sent to Fisherman’s Bend in Victoria, forwarded to Detroit, then flow back to the orignator.

    This is just one example.

    Ford does (did) make some nice vehicles, but it’s overseas operations in the EU, Asia and around the world outside of the US was overly managed with teirs of processes.

    GM and FCA are similar, the Asians are the best at running lean organisations in manufacturing, particularly the Japanese. The EU is second with the Koreans, then lastly the US.

    This is where the US auto manufacturers are failing, they still are operating in the past, as always.

    Ford, GM or FCA give me a ring and I’ll have a look at your processes and org structure.

    US retail is in a similar boat. The EU are now the best at running lean retail outlets. The reason why is higher wages and taxes forced the EU retailers to maximise human resources, the same the Asians have done with auto manufacturing.

  • avatar
    Big Al from Oz

    Ford could sell more Rangers in Australia, just drop a Ranger with the 2.7 EcoThirst in a few models, and not the premium models as seems to be Ford’s current rage.

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