Pressure mounts on Ford, CEO Fields

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Thread: Pressure mounts on Ford, CEO Fields

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    Pressure mounts on Ford, CEO Fields

    http://www.detroitnews.com/story/bus...lds/101488338/

    Pressure is building on Ford Motor Co. CEO Mark Fields.

    Even as the company’s directors are set to hold their monthly meeting ahead of the Blue Oval’s annual shareholders meeting Thursday, a ranking source confirmed Ford executives used a previously scheduled “strategy session” with the board Tuesday to review priorities to boost growth and improve returns.

    The moves come as investors show increasing skepticism that Ford’s strategy to fortify its so-called “profit pillars,” to transform its luxury and small-car business and to grow electrification, autonomy and mobility is gaining traction.

    As prodigious as Ford’s revenue and profits have been since the end of the Great Recession, they remain tethered to its market-leading pickup and SUV business. Electrification, mobility and autonomy, by contrast, consume capital and executive attention, contributing to neither the top nor the bottom lines.





    And as U.S. sales, the engine of Ford’s profitability, slow, the tension between the traditional business and the next-generation autonomy-and-mobility spaces is magnified — and not to the benefit of Ford or its CEO.

    The message: The core business that generates automotive revenue and profit shows little prospect for meaningful growth. And the growth business of electrification, mobility and autonomy is contributing scant revenue and even less profitability.





    That’s the dilemma facing Fields, named in 2014 to replace legendary CEO Alan Mulally. The multidimensional mobility space is considered the next new-new thing in the auto industry, the most revolutionary change since founder Henry Ford created the moving assembly line. But its growth prospects are uncertain and not likely to be realized in the short term.

    “We don’t manage our company on day-to-day” swings in the share price, Fields said last month at the New York Auto Show. “We’re absolutely committed to making sure that we bring value to our shareholders, and we’re just going to stay laser-focused on our strategy of fortifying our profit pillars, transforming the under-performing parts of our business.

    “You have to have one foot in today, but also one foot in the future. We are doing that in terms of investments ... so that we have a very healthy core business, and that we’re growing these new revenue opportunities going forward. I think investors understand our strategy.”

    The intent of Tuesday’s session is to walk Ford’s directors through the automaker’s priority areas — a process that could prove fraught amid growing signs investors remain underwhelmed with the Blue Oval. First-quarter 2017 profits fell 35 percent compared to the same period a year prior, more than expected.

    Shares in Ford, the nation’s No. 2 automaker, are stuck in a narrow trading range, comparatively unmoved by two years of record profitability in 2015 and 2016. On July 13, 2014, Ford shares closed at $17.72; on Tuesday, Ford closed at $11.16, a 37-percent decline.

    Worse, electric-car maker Tesla Inc., which lost more than $13,000 on each of the 25,000 cars it delivered in the first quarter, passed Ford in market capitalization in the same quarter. At Tuesday’s close, according to MarketWatch, Ford’s shares are worth $44.32 billion; shares in Tesla are valued at $50.1 billion.

    A Ford spokesman declined to discuss this week’s meeting schedules or related issues. In a statement, he wrote: “We do not share details or discussions from our board meetings for competitive reasons. We also are unable to comment on rumors or speculation.”

    Ford isn’t the only Detroit automaker beset with impatient shareholders. General Motors Co. shares are trading only slightly higher than its 2010 initial public offering price of $33 a share, despite record earnings since emerging from its historic 2009 bankruptcy.

    Greenlight Capital Inc. and its President David Einhorn want GM to create one class of stock to receive dividends and another that would participate in earnings, cash flow and future growth. It’s also seeking to add three board members. GM is opposed to the plan.

    The automaker and Greenlight, which owns 52 million shares of GM, have been exchanging proxy jabs and letters to shareholders in recent weeks. GM’s annual shareholders meeting is June 6 in Detroit.

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    Re: Pressure mounts on Ford, CEO Fields

    Ok, I admit to being a Stock Market Grass Hopper. But comparing Tesla to Ford, is that not just comparing Longs and Shorts? 1 Company that has survived the Depression, The Bail Out, Has Product and a Network on the ground. verses 1 That has 1 product on the ground, the promise of more. A start on a Dealer Network. Will it's promises go Up or Down.

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    Re: Pressure mounts on Ford, CEO Fields

    Ford isn't the only company grappling with these sorts of challenges. Here are a couple of excerpts from a Reuters article on Toyota:
    http://www.reuters.com/article/us-to...-idUSKBN1860PS

    Basically, Toyota expects profits to drop 20% this fiscal year (down to $14B), on top of a 30% drop last year.

    Toyota Motor Corp (7203.T), Japan's biggest automaker, forecast operating profit for the current year to slide by a fifth due to increased spending to push sales in a slowing U.S. market and the lingering impact from a stronger yen.
    The financial setback would pose a challenge to the world's second largest automaker in sustaining big investments in fast-growing new technologies such as automated driving functions and artificial intelligence.
    The automaker plans to keep R&D investments near record high levels this year of around 1.05 trillion yen, roughly 4 percent of sales revenues, as it continues to invest in the new technologies.

    "Given the size of Toyota, we must be able to sustain such R&D investment; that's the only way in which we can achieve sustainable prosperity," [Toyota President] Toyoda said.
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    Re: Pressure mounts on Ford, CEO Fields

    They should expand into the smart phone bidness. Free fone with every caah!
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    Re: Pressure mounts on Ford, CEO Fields

    As I've previously stated Ford needs to work on their margins, but they are making money! The Hype around Tesla is beyond ridiculous and I can't wrap my head around it. Too many people with more money than sense if you ask me. Ford has a growing foothold in the Electric market with experience as well. Tesla may have the hype factor but fall far short of the what Ford/GM ect have to grow off of.

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    Re: Pressure mounts on Ford, CEO Fields

    All the more reason to put real resources into Lincoln, Luxury is the only real area that can provide material profit growth. And, if they can build up the Lincoln brand before autonomous cars become mainstream, then it has the chance to survive once we stop owning cars (I'm assuming we will just reserve cars when we need them, they'll drive to our house and we will pay a usage fee). My assumption is at that point there will be two types of cars - luxury for those times we want to make an impression (and pay a premium usage fee) and otherwise cheap, ubiquitous cars that no one pays attention to. Luxury makes will need to have a strong brand name to survive in that environment. Tier 2 luxury will disappear....

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    Re: Pressure mounts on Ford, CEO Fields

    Quote Originally Posted by InCogKneeToe View Post
    But comparing Tesla to Ford, is that not just comparing Longs and Shorts?
    It is, but it's also like comparing a tried and true hot air balloon to a prototype space ship. Tesla is at least 10 steps ahead of anybody else when it comes to innovation, their profitability is almost irrelevant to the impact they're making via new technologies.

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    Re: Pressure mounts on Ford, CEO Fields

    Quote Originally Posted by jzchev28 View Post
    As I've previously stated Ford needs to work on their margins, but they are making money! The Hype around Tesla is beyond ridiculous and I can't wrap my head around it. Too many people with more money than sense if you ask me. Ford has a growing foothold in the Electric market with experience as well. Tesla may have the hype factor but fall far short of the what Ford/GM ect have to grow off of.
    the stock market makes you money ONLY when a company GROWS (yes there are exceptions) and FORD/GM ETC are so BIG they have LITTLE growth as a % VS Tesla that will make MANY RICH IF it works out and delivers but the same can NOT be said for FORD

    I guess the question is with this NEW "transportation solution" thinking how much R/D do we spend to fend off APPLE/TESLA ETC VS "OLD" solutions to fend off Toyota and friends and does GM/FORD have a CHANCE to be part of the NEW world order IF it ever comes to fruition

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    Re: Pressure mounts on Ford, CEO Fields

    Quote Originally Posted by Neanderthal View Post
    They should expand into the smart phone bidness. Free fone with every caah!
    That and $10 eBay voucher, so Musk makes more money at Paypal to spend on Tesla, and cutting back on that expensive hair dye Mark uses.

    Big Al was a one off, they broke the mould when they made Alan Mulally from Boeing.
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    Re: Pressure mounts on Ford, CEO Fields

    Quote Originally Posted by richmond2000 View Post
    the stock market makes you money ONLY when a company GROWS (yes there are exceptions) and FORD/GM ETC are so BIG they have LITTLE growth as a % VS Tesla that will make MANY RICH IF it works out and delivers but the same can NOT be said for FORD

    I guess the question is with this NEW "transportation solution" thinking how much R/D do we spend to fend off APPLE/TESLA ETC VS "OLD" solutions to fend off Toyota and friends and does GM/FORD have a CHANCE to be part of the NEW world order IF it ever comes to fruition
    Or in the case of Shorts, Perceptions of Growth or Drops.

    And R&D is a whole other argument. One could show Extreme Profits Today, if they limit the R&D of Tomorrow. What of Toyota's 1.05 Trillion Yen investments in tomorrow?

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    Re: Pressure mounts on Ford, CEO Fields

    Quote Originally Posted by Oldsmobile stopped View Post
    Big Al was a one off, they broke the mould when they made Alan Mulally from Boeing.
    He was just the Right Non Car Businessman, saving a Car Business at the Right Time.

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    Re: Pressure mounts on Ford, CEO Fields

    Lincoln's revival has been incredibly slow and boring. Ford couldn't even show or tease the new Bronco at NAIAS. It's like they're doing everything they can to NOT build any excitement/interest in their company. They need to take some notes from the king of PR, Elon Musk.

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    Re: Pressure mounts on Ford, CEO Fields

    Also, Ford's recent product MCEs have been awful.

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    Re: Pressure mounts on Ford, CEO Fields

    Quote Originally Posted by The Handler View Post
    Lincoln's revival has been incredibly slow and boring. Ford couldn't even show or tease the new Bronco at NAIAS. It's like they're doing everything they can to NOT build any excitement/interest in their company. They need to take some notes from the king of PR, Elon Musk.
    I was just on GM to return to Med Duty Trucks, thread which started Jan 2012.

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