Side Mirrors and Tired Buzzwords: Ford Gets a Rough Ride at Wall Street Meeting
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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- Dukeisduke Why the hell doesn't Farley just resign? Why hasn't Bill Ford fired him? I lay all this at Farley's feet.
- Dukeisduke I tried watching the livestream (I'm a MT+ subscriber), but after 15 minutes of jawing by the presenters, I got bored and turned it off. I may watch it this weekend, when I can fast forward through that stuff, to get to the reveal.
- Dukeisduke Electric power steering, I assume. First-gen Chevy Cruzes can suffer from similar issues, usually traceable to a flaky battery negative cable, a $10 OEM part. Weird, huh?
- Kwik_Shift Once 15 Minute Cities start to be rolled out, you won't be far enough away from home to worry about range anxiety.
- Bobbysirhan I'd like to look at all of the numbers. The eager sheep don't seem too upset about the $1,800 delta over home charging, suggesting that the total cost is truly obscene. Even spending Biden bucks, I don't need $1,800 of them to buy enough gasoline to cover 15,000 miles a year. Aren't expensive EVs supposed to make up for their initial expense, planet raping resource requirements, and the child slaves in the cobalt mines by saving money on energy? Stupid is as stupid does.
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.
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.