Like most automakers and many other companies, Ford Motor Company took a huge hit during the financial crisis of 2007 and 2008. Ford stock bottomed out in January 2009, just like many other companies, but managed to stay afloat. While most companies are clawing their way back to profitability, Ford’s comeback hasn’t been encouraging. Taking, for example, the comparison between the Dow Jones Industrial Average and Ford Motor Company, things seemed to be improving in sync for a few years. Since 2014, however, Ford has been in steady decline as the Dow continues to climb.
Part of the problem might be linked to used-car sales numbers, which have been higher than ever, the average used car sitting on the lot for barely over a month, a new record according to Edmund’s analysts. The reason for this? Used cars are a great value, and as new-car prices continue to climb without offering much more than new-car smell, consumers are going for the value option. Used SUVs and trucks aren’t quite so compelling, so Ford trucks are selling like Ford trucks always have, and Ford F-150 is still the best-selling vehicle in the Nation. Ford Motor Company’s efforts abroad are another part of the problem, perhaps even bigger. Endeavoring to put its
In the last couple years, new Ford CEO Jim Hackett has been turning things around for the company. Almost all sedans have been wiped from the production lists as drivers opt for trucks and SUVs, which isn’t strictly a North American problem. Everywhere else, Ford has been cutting production on its underperforming models in Europe, South America, and Russia. Instead of producing for production’s sake, Ford is focusing on producing for profit and investing where it sees the future heading: electric vehicles and smart mobility.
Delving deeper into the technology space won’t be a simple matter, but CEO Hackett’s latest moves seem to be putting the company on better footing for the future. Tim Stone, who worked for Amazon for some two decades, was recently hired as Ford Chief Financial Officer. Stone’s job will be to keep Ford on track toward more profitability, but it’s too soon to say anything about his impact on the company’s standing. Another recent development, this in the electric vehicle space, a $500 million investment in electric truck maker Rivian, that on top of $700 million Rivian had already raised in February. All in all, Ford has already invested over $11 billion in electric vehicles due to debut by 2020.
Again, after just a couple years under new leadership, some leaning measures, and daring investments, it’s too early to tell if Ford’s new focus will yield results in the future. Stock analyst Jim Cramer says the signals are there for positive progression. Will we be posting updates to that effect next year? Only Ford can interpret the markets and hopefully make the right moves to make it so.