Ford's Game Plan

[analogman]

Here's a link to an interesting story today in The Truth About Cars, about Ford's game plan:

http://www.thetruthaboutcars.com/20...cull-cars-slash-configurations-boost-profits/

As others have commented on before in several threads, CEO Jim Hackett is all about boosting short-term profits - by cutting car models and reducing configurations. It's just what you'd expect of a penny-pinching bean counter who doesn't give a rat's a$$ about cars (but I bet he cares a lot about his bonus, which I'm sure the Ford family has directly linked to short-term profits and the stock price).

This has bearing on the Mustang in that anything that requires 'investment' may not be a high priority - like, a Mach 1 (Mustang, not using the 'Mach 1' name on some kind of electric or hybrid abomination), or a new S650 platform Mustang.

Let's hope Hackett's tenure as CEO is short. Maybe if he gets a big score bonus this year, he'll gracefully depart into cushy retirement someplace tropical, and leave the door open for another engineer/car guy CEO like Alan Mulally or Mark Fields (but, any new CEO can only come in with the Ford family's blessing, and after Fields, they're likely to prefer soulless bean-counters going forward).

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[UAmach1]

Well yeah, the stock holders want profits fast to get returns. That's why Hackett was put in.

 

[ApollosWar89]

A publicly traded company has a financial obligation to its shareholders. They will do what is in the best interest of the shareholders and the foreseen future of the company. I.e. Ramping up the EV budget while they find a minimal amount to invest in petro product lines so that people continue to buy them at a reasonable ROI for Ford.

Any major auto manufacturer who is willing to take heavy losses 5, 10, 15 years out by continuing to throw money at 100% combustion vehicles won't be around for long. The large investments into EV etc. will pay dividends toward Ford's future as a top manufacturer in the long run.

 

[analogman]

I totally get it... I've worked for a few public companies, and know all too well, from painful personal experiences, the intense and insane pressure stockholders put on companies for short-term gains (it was a big factor in my deciding to retire; I got tired of the frustrations and humiliations of dealing with whining 28 year old hedge fund jerks).

I understand that companies are obligated too carry out the wishes of their shareholders (as nonsensical and stupid as they may be). In any industry, the fastest and easiest way to boost short-term profits is to cut development expenses and jack up prices. The problem is, if you extrapolate that, you end up with nothing to sell in the future. As current product sales dwindle, you don't have enough to grow or even replace them, and the company vanishes. You end up going broke on the installment plan.

It's just a shame for car guys, because short-term profits are usually mutually exclusive with building more fun cars. It's also not necessary with Ford. The Ford family holds a controlling block of voting stock. They're not getting 'judged' by their 'limited partners' for short-term stock price gains. They also certainly don't need the money, I think they're doing just fine. They could well afford to run the company as a sustainable business, and keep up the family legacy.

But I guess they're greedy like everyone else on Wall Street. All they care about is profits NOW. I read someplace that with family businesses, it's usually the first generation that builds the business, the second generation coasts on it, and the third generation runs it into the ground.

I hope that doesn't happen with Ford (I want to be able to buy a couple more great Mustangs in my life).

 

[thill444]

Yeah it's concerning for the future of performance cars for Ford. The priority will likely be trucks and SUv's. The new Fiesta ST not being sold in the States is a bad sign...

 

[2veloce]

The “me too” mentally has always existed in Detroit. Ford needs to play in the EV and Self driving sandbox in order to a major player. Performance will be available but at a higher and higher price. As long as the consumer is willing to accept 4 and 6 cylinder turbo engines the V8 will eventually disappear. Also the government regulations continue to restrict what can be made and sold based on CAFE.

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