CNBC: Ford CEO Jim Farley’s frustration builds as he vows to transform the automaker

[North7]

Missed profit goals, repeated promises and asking investors to be patient, this has all of the hallmarks of a CEO on his way out. On CNBC Squawk on the Street, Jim Cramer (a huge Farley fan) stated "Farley always says things will get better next quarter, this time, if they don't, I"m selling the stock", Cramer went on to say.

Corporate shareholders may finally demand action from the board and Bill Ford, stay tuned, as Ford likes to say...

CNBC: Ford CEO Jim Farley’s frustration builds as he vows to transform the automaker
Ford
CEO Jim Farley is frustrated.

Supply chain and cost issues hurt Ford over the last two years. Last September, Ford warned third-quarter costs would be $1 billion greater than expected. For the last two years, high warranty costs — from recalls and troubled launches of new vehicles — were a problem that Farley and his team have been unable to fix.

The company’s fourth-quarter earnings on Thursday missed analyst expectations by a wide margin, as costs and supply chain issues again hurt Ford’s bottom line, Farley knows his company needs to change.

“We have to change our cost profile,” Farley told CNBC after a call with analysts to discuss the quarter’s results. “We know what we have to go after. I’d love to give you all the metrics and all the specific gaps we see. But you know, whether it’s absenteeism, the number of sequencing centers, the number of wiring harnesses we have, we know what it is.”

The push to transform Ford is taking on greater urgency after the automaker reported 2022 adjusted earnings of $10.4 billion, just three months after the company told analysts it expected to make $11.5 billion to $12.5 billion in that year.

While discussing the fourth-quarter results with Wall Street analysts, Ford’s leadership declined to detail the specific steps it will take to cut costs and make the automaker more efficient and profitable.

Farley knows investors are watching and waiting for Ford to finally get its act together.

“Be patient. You know, we got the right team. We got the right plan. We’re growing like heck in our pro and EV business,” Farley said when asked what he would say to Ford shareholders. “This key team is going to deliver for you and you are going to get a great return on your investment.”

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[LazygonInfinity]

I can forgive them supply chain issues and recalls with brand new models.

The issues that Ford incomprehensibly refuses to fix and I cannot forgive are: (1) why is there not a clean and clear reservation model for vehicles where it is simply first come, first serve in terms of build order and delivery; and (2) why has Ford not reigned in their price-gouging, useless, middle-man dealer network? Why does a dealer, which has done nothing to create a product, get to bake in 10-20k of profit on any desirable vehicle in lieu of direct to consumer sales or fixed pricing on new vehicles?

 

[rfiorillo]

Funny, is I do IT for one of the top sellers of a Chrysler Dodge Jeep & Ram dealership & they are getting cars & moving them. They have found solutions around the constraints..

Maybe Chrysler's management isn't focusing on their management's pronounce & focusing on building cars.

Just saying, no excuse.

 

[MnLakeBum]

There are simple things Ford can do, like offering three trims of the Bronco instead of 6(7 with Raptor) and letting people add individual options such as a heated steering wheel or sway bar disconnect. Automotive manufacturing requires huge long-term capital investments and a wise leader with vision. Telsa is largely running laps around the other auto manufacturers due to Elon's genius. Tesla is growing at 40%, while the legacy automakers have shrinking volume and revenue over the last few years. Tesla was dismissed by all the other manufacturers 6 or 7 years ago, and now they are scrambling to catch up but are at least five years behind. It reminds me of when Apple entered the cell phone market in 2007, and the CEOss at Blackberry, Nokia, Microsoft, and all the "experts" were poking fun at Apple and what they though was a lame phone. They all though Steve Jobs was a fool, lol.

Ford netted $762 per vehicle in the Q3 of 2022 compared to Tesla's $9,574. Sadly, the only ones at Ford that make $10k per vehicle are some of the gouging dealers, but that strategy only works short-term and is cyclical with the economy.

Ford is long overdue for a new leader.

 

[PrepVet]

I can forgive them supply chain issues and recalls with brand new models.

The issues that Ford incomprehensibly refuses to fix and I cannot forgive are: (1) why is there not a clean and clear reservation model for vehicles where it is simply first come, first serve in terms of build order and delivery; and (2) why has Ford not reigned in their price-gouging, useless, middle-man dealer network? Why does a dealer, which has done nothing to create a product, get to bake in 10-20k of profit on any desirable vehicle in lieu of direct to consumer sales or fixed pricing on new vehicles?

1) That's a great want for consumers but it ignores how manufacturing works. The entire previewing and such happens when Ford compares what it is available to build (parts) and what is out there to be built (orders). I'm not saying it couldn't be better, but I also know I don't know Ford's situation with parts suppliers etc. 2) You already mostly answered your own question. Ford has nothing to do with the dealers. They are independent. You don't buy your car from Ford, you buy it from the dealer. I think the dealer protection model is stupid but until the law changes (which it should, but won't) Ford has little to nothing it can do to dealers.

 

[North7]

The other financial sites are now chiming in..

Ford stock slumps as CEO says automaker 'left $2B in profits on the table'

“We should have done much better last year,” CEO Jim Farley admitted. “We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”

Ford’s Profit Engine Needs a Full Overhaul

The company is starting to come clean about its flabby manufacturing and inefficient engineering

Ford Motor has a cost problem—and that is before it starts selling many cut-price Mustang Mach-Es.

Investors should brace for falls in Ford’s stock Friday. Before hours it was down almost 8%, following results late Thursday that fell short of its guidance. Adjusted operating profit ended up at $10.4 billion for the year, whereas the company in October said it would make about $11.5 billion. Even that was the low end of the previous range of estimates it gave.

 

[North7]

1) That's a great want for consumers but it ignores how manufacturing works. The entire previewing and such happens when Ford compares what it is available to build (parts) and what is out there to be built (orders). I'm not saying it couldn't be better, but I also know I don't know Ford's situation with parts suppliers etc. 2) You already mostly answered your own question. Ford has nothing to do with the dealers. They are independent. You don't buy your car from Ford, you buy it from the dealer. I think the dealer protection model is stupid but until the law changes (which it should, but won't) Ford has little to nothing it can do to dealers.

Please stop repeating the myth, here are but a few tools the manufactures DO HAVE over the dealers.

Please don't try to tell me all about dealers being independent businesses, first an foremost they are a Ford Franchisee, subject to Ford's dealership franchise agreement. If Ford wants to improve their reputation, they have to get serious and crack down on these shady, dishonest, unethical dealers. It will only take a few to get the message across to all dealerships.

Here is an overview of what a dealership is obligated to when agreeing to become a Ford dealer.
How to Open a New Ford Dealership
Once approved as a franchisee, you’ll be asked to sign legal documentation agreeing to Ford’s terms. Among other things, this agreement outlines Ford’s right to terminate its relationship with you at any time should your dealership prove unsatisfactory. This means that you must ensure strong sales and a commitment to a positive customer experience, among other obligations.

In addition, the automotive websites have shed light on the subject:

Automakers Can Reduce Dealer Markups With a Simple Policy

Ford, GM Make Stronger Push to Stop Flipping, Price Gouging of Popular Models

 

[MayhemMike]

Not a soul complains about dealership prices when the vehicle they want or order sells for thousands under sticker. It is the way the game is played. Items in demand cost more. Items that aren’t cost less. The product issues due to the fallout from the Boogie man virus are the extreme and not the norm. Ford and all the other car makers will experience CEO shake ups due to the depth of the economic recession that is on the way. Just like every recession prior has done.

 

[huey]

Agreed
when the C8 vettes came out it was hard to find dealers not putting a bunch of adm on them - at least in my area

 

[PrepVet]

Please stop repeating the myth, here are but a few tools the manufactures DO HAVE over the dealers.

In addition, the automotive websites have shed light on the subject:

Automakers Can Reduce Dealer Markups With a Simple Policy

Ford, GM Make Stronger Push to Stop Flipping, Price Gouging of Popular Models

It is absolutely not a myth. And those links are of no type of actual control over the dealerships.

 

[North7]

Not a soul complains about dealership prices when the vehicle they want or order sells for thousands under sticker. It is the way the game is played. Items in demand cost more. Items that aren’t cost less. The product issues due to the fallout from the Boogie man virus are the extreme and not the norm. Ford and all the other car makers will experience CEO shake ups due to the depth of the economic recession that is on the way. Just like every recession prior has done.

Sorry, Mary Barra, the GM CEO, did not get the memo...

GM shoves aside recession fears with robust 2023 forecast

GM shares surge after record earnings and new stake in lithium company

 

[vrtical]

Jim is busy working on his racing career and has no time to focus on important matters.

 

[North7]

It is absolutely not a myth. And those links are of no type of actual control over the dealerships.

You may have missed this part:

Here is an overview of what a dealership is obligated to when agreeing to become a Ford dealer.
How to Open a New Ford Dealership
Once approved as a franchisee, you’ll be asked to sign legal documentation agreeing to Ford’s terms. Among other things, this agreement outlines Ford’s right to terminate its relationship with you at any time should your dealership prove unsatisfactory. This means that you must ensure strong sales and a commitment to a positive customer experience, among other obligations.

 

[PrepVet]

You may have missed this part:

No I saw it. You're just reading more into it than reality. You're allowed to be wrong. This is still a free country.

 

[vrtical]

Oh I forgot to add since Ford is bleeding money, they are headed back to F1.

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