Tico Posted January 28, 2020 Share Posted January 28, 2020 https://www.ccn.com/why-bankruptcy-forgone-conclusion-for-ford-motor-company/ Regardless of how factual vs alarmist this story is, I think it highlights the fact that current CEO is not delivering for the company, it's employees, customers or share holders. Quote Link to comment Share on other sites More sharing options...
twintornados Posted January 28, 2020 Share Posted January 28, 2020 Quote Ayush Singh @TraderBased Ayush is a financial blogger and a swing trader. He has roughly four years of experience covering the U.S. stock market and has consistently featured on Tip Ranks' list of top performing bloggers. He is based out of Indore, India and is also managing the portfolios of several local retail clients. You can follow him on Twitter @TraderBased or email him on Ayush.Singh93@outlook.com Yawn..... 1 Quote Link to comment Share on other sites More sharing options...
ausrutherford Posted January 28, 2020 Share Posted January 28, 2020 I could have come to this conclusion what the writer's career by the first few sentences alone... Quote Link to comment Share on other sites More sharing options...
probowler Posted January 28, 2020 Share Posted January 28, 2020 I read this the other night, got a little concerned honestly but it's just an opinion piece. I do wonder how ford will handle a recession within the next 2 years? Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 28, 2020 Share Posted January 28, 2020 It’s only because Ford hasn’t “wowed” Wall Street with anything much to get their blood going, they are simply a trailing indicator. Ford has plenty of cash and lots of long term product investments, it’s not like they need to borrow any more money....... Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted January 28, 2020 Share Posted January 28, 2020 (edited) It's not like Ford hasn't been investing in new product. The next 12-18 months will see a flurry of new product being shown and launched, including the biggest profit maker in F-150. Edited January 28, 2020 by fuzzymoomoo Quote Link to comment Share on other sites More sharing options...
.I. Posted January 28, 2020 Share Posted January 28, 2020 This article is a piece of she et. Ford is in the middle of new releases, with new vehicles that will change the market. The Mustang Mach E caused a media revolution few months ago, the Bronco sub-brand will change the SUV market, taking a part of the Jeep sales, the new F series, with electric variants ,will be the most important truck launch in decades. The Lincoln brand is in its best shape since the 70´s. And all that despite its CEO who, I agree, is not delivering what the share holders and Wall Street want. I dont like Hackett. IMO, he has a comunication problem. He cant inspire confidence in consumers and share holders. And some faults in the operational area (the rugged and terrible launch of the Explorer) are unacceptable. But Ford is not in bankcrupcy risk. Definitly not. A new CEO? This will make me happy. And could make shareholders happy, too. 2 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 28, 2020 Share Posted January 28, 2020 (edited) LOL the horse shit will stop once new products are revealed, at the moment, plants in Mexico is not showing their true potential and Ranger is only starting to show its sales potential. Lots of income earners are there generating profits so I don’t see ford going bankrupt anytime soon Edited January 28, 2020 by jpd80 2 Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted January 28, 2020 Share Posted January 28, 2020 (edited) There ARE a FEW valid points that make old timers nervous ! The commitment to rebuilding the Research and Engineering Center and Michigan Depot (train station) are two "drains" on cash flow that will not pay back for many, MANY years. Inside the company, it seem like no engineers want to work on powertrain (internal combustion engine and transmission) even though they are currently the life blood of the company and will continue to be very important for a long time DESPITE Jim Hackett's admiration of "think tank" wacko Tony Seba. (who has numerous times predicted that no one will be making internal combustion engines after 2030 !) I am not enough of a financial person to know how much cash they have on hand, but it is pretty obvious that both the Mach-E and the Bronco need to "hit it out of the park" in order to recover R&D costs and take some of the "income" burden off of the shoulders of the F150 ! Edited January 28, 2020 by theoldwizard 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted January 28, 2020 Share Posted January 28, 2020 The article is correct that a downgrade for Ford debt is inevitable. But it's not time for a new CEO. Jim Hackett is the right person for the job. It's taking a long time to get Ford fit again, and investors and analysts are understandably frustrated, but only Hackett can finish the job he started. If Jim Hackett hadn't become Ford CEO in 2017, Ford probably would be bankrupt now. 1 Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted January 28, 2020 Share Posted January 28, 2020 Also Ford would be sold long before it goes bankrupt. Ford goes bankrupt the family gets nothing and loses voting power, they sell they retain that and go out with Billions. That is the major reason they didn't go bankrupt before. This family ownership is also why Ford stock doesn't move, or get love from the street. It is also why Ford hasn't embarked on a large share repurchase program and just raises the dividend. There are 3x+ the outstanding shares than there was in the mid 90's when Ford even had more companies under their umbrella. Ford used Stock to fund the VEBA UAW retiree medial payments and sold a billion plus shares to do that and sold stock to make bond payments. The Ford Family doesn't care about share price; they care about dividends. If they need more cost savings and cut the divided to say .10 vs .15 the stock will sink to the $6 range, if interest rates go up you could see it in the high $4 range. If they cut it all together the stock is $2, at that point they will be selling the company to VW. The partnership with VW is also the family's exit strategy if things get ugly. Ford stock is and has been a S*** investment when you compare to index funds. If you put $10000 in Ford stock in the 90's, you'd have $3000 today when the same investment in an index fund you'd be at $80,000+. The stock was well over $40 and paid $2.00/year in dividends. Ford fans need to realize that Hackett was brought in to save the company and keep family control, he fails the independent Ford that people love is gone. The product over the next 24 months is make or break for Ford to remain an stand alone company. The change the Auto Industry is experiencing is accelerating and has many different winds, from world government regulation, affordability, to upstarts that don't have to play by the same rules. 4 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 28, 2020 Share Posted January 28, 2020 (edited) 4 hours ago, theoldwizard said: There ARE a FEW valid points that make old timers nervous ! The commitment to rebuilding the Research and Engineering Center and Michigan Depot (train station) are two "drains" on cash flow that will not pay back for many, MANY years. Inside the company, it seem like no engineers want to work on powertrain (internal combustion engine and transmission) even though they are currently the life blood of the company and will continue to be very important for a long time DESPITE Jim Hackett's admiration of "think tank" wacko Tony Seba. (who has numerous times predicted that no one will be making internal combustion engines after 2030 !) I am not enough of a financial person to know how much cash they have on hand, but it is pretty obvious that both the Mach-E and the Bronco need to "hit it out of the park" in order to recover R&D costs and take some of the "income" burden off of the shoulders of the F150 ! Bronco is on next generation T6, a lot of those engineering costs will be shared with next generation Ranger, Everest and of course the Amarok which Ford will build for VW. Edited January 28, 2020 by jpd80 Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 28, 2020 Share Posted January 28, 2020 I really don't understand the doom and gloom surrounding Ford as if they're just skating by about to close the doors, which is hardly the case. 3 Quote Link to comment Share on other sites More sharing options...
twintornados Posted January 28, 2020 Share Posted January 28, 2020 27 minutes ago, rmc523 said: I really don't understand the doom and gloom surrounding Ford as if they're just skating by about to close the doors, which is hardly the case. It helps the author to keep "shorting" Ford stock. 2 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 28, 2020 Share Posted January 28, 2020 14 minutes ago, twintornados said: It helps the author to keep "shorting" Ford stock. It’s the only way that Wall Street analysts have to punish Ford for not doing what they want, they can’t see those future products until they materialise. The dumbest thing is a lot of Ford’s so called borrowings are linked to Ford Credit’s loans to customers which are all earning interest and not in subprime lending territory. 2 Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted January 29, 2020 Share Posted January 29, 2020 18 hours ago, jpd80 said: Bronco is on next generation T6, a lot of those engineering costs will be shared with next generation Ranger, Everest and of course the Amarok which Ford will build for VW. It is has been over 12 years since I was there, but that was not how engineering/tooling costs were booked by the bean counters. No one still understands how the Ford/VW "marriage" is really going to work. Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted January 29, 2020 Share Posted January 29, 2020 17 hours ago, jpd80 said: The dumbest thing is a lot of Ford’s so called borrowings are linked to Ford Credit’s loans to customers which are all earning interest and not in subprime lending territory. Not all are earning interest (they still have some 0% deals ongoing). Used cars are very poor "collateral" and only worth a fraction of the their value if they have to be repossessed. Quote Link to comment Share on other sites More sharing options...
grbeck Posted January 29, 2020 Share Posted January 29, 2020 2 hours ago, theoldwizard said: Not all are earning interest (they still have some 0% deals ongoing). Used cars are very poor "collateral" and only worth a fraction of the their value if they have to be repossessed. Yes, but most people will keep paying on a vehicle to avoid repossession. Take away a person's vehicle, and you've taken away their ability to get to work, the grocery store, etc. If I recall correctly, during the last financial collapse, people were more willing to default on their mortgages than on their vehicle loans. Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted January 29, 2020 Share Posted January 29, 2020 Ford and really all manufacturers biggest hit to earnings coming up is going to be used car residuals for vehicles coming back off lease. The Used car market has been getting pummeled making used cars crazy values, even with vehicles that traditionally had high resale values (SUV/Trucks). You'd do far better in the market now to buy a 1-3 year old used vehicle vs new, and just get a OEM warranty. Example: 2019 Edge AWD Titanium 401A that has 30,000 miles for 26K.( https://www.allstateford.com/used/Ford/2019-Ford-Edge-ce0112940a0e0adf226ca5b06b3d795a.htm?searchDepth=1:8 ) Even if you need a set of tires and ESP PremiumCARE to 125,000 you're under 30K out the door for a 1 year old car and have full warranty coverage for almost another 100K miles on something that would run you 42K right now. Quote Link to comment Share on other sites More sharing options...
Stampede.Offroad Posted January 30, 2020 Share Posted January 30, 2020 I don't think the conversation about the health of Ford would even exist if Tesla wasn't so ridiculously over valued. One wrong move that and one will pop. That's a company built on credit and hype in need of a CEO makeover. 4 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted January 30, 2020 Share Posted January 30, 2020 4 hours ago, Stampede.Offroad said: I don't think the conversation about the health of Ford would even exist if Tesla wasn't so ridiculously over valued. Ford's operational and financial woes aren't directly related to the value of Tesla. Ford has been unhealthy since Alan Mulally retired as CEO in 2014. Jim Hackett has his plate full as he tries desperately to get Ford fit again while dealing with both internal and external challenges. It's entirely expected that investors and analysts are having conversations about the company's health now and in the next 1-2 years. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 30, 2020 Share Posted January 30, 2020 12 hours ago, rperez817 said: Ford's operational and financial woes aren't directly related to the value of Tesla. Ford has been unhealthy since Alan Mulally retired as CEO in 2014. Jim Hackett has his plate full as he tries desperately to get Ford fit again while dealing with both internal and external challenges. It's entirely expected that investors and analysts are having conversations about the company's health now and in the next 1-2 years. I agree with him. They may not be running on all cylinders, but all this talk as if the company is going out of business tomorrow is absurd. Quote Link to comment Share on other sites More sharing options...
akirby Posted January 30, 2020 Share Posted January 30, 2020 Not counting the one time restructuring costs for South America and even with the Explorer and Escape launches Ford made $2B profit in Q4. With Bronco and the new Ranger Ford will have arguably the best truck/van/utility lineup in the industry. They're investing in BEVs and hybrids so high gas prices shouldn't hurt them. And they have all sorts of new products in the hopper - it's not like they just cut development to save money and make the balance sheet look good. Bankruptcy talk is just stupid. 3 Quote Link to comment Share on other sites More sharing options...
snooter Posted January 30, 2020 Share Posted January 30, 2020 They cut cars to have the money for BEV development....its a gamble that ford hopes pays off....the consumer will ultimately determine if hacketts plan is successful..i find it funny tesla buyers have no real problem buying a car... Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted January 31, 2020 Share Posted January 31, 2020 14 hours ago, snooter said: They cut cars to have the money for BEV development.... No, they cut cars because they were not profitable. Quote Link to comment Share on other sites More sharing options...
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