rperez817 Posted October 26, 2022 Share Posted October 26, 2022 Earnings call is at 4 PM Central today. Sadly, it appears the Argo AI business unit is going to be shuttered. Just a few months ago, Ford through Argo AI was the first company in the world to test Level 4 robotaxi service without safety drivers in 2 U.S. cities simultaneously. Ford Fulfills Earnings Guidance, Has Strong Cash Flow in Q3; Will Accelerate Development of L2+/L3 ADAS Technology | Ford Media Center Highlights. Quarterly revenue of $39.4 billion, up 10% despite supply chain issues $827 million net loss, a result of special items; adjusted EBIT of $1.8 billion, exceeding recent guidance Resets expected timing, prioritization of advanced driver assistance systems; records $2.7 billion non-cash, pretax impairment on investment in Argo AI Operating cash flow was $3.8 billion; adjusted FCF of $3.6 billion pushes year-to-date total beyond original full-year guidance of $5.5 billion to $6.5 billion Ends quarter with strong cash and liquidity of $32 billion and $49 billion, respectively Anticipates full-year adjusted EBIT to be about $11.5 billion, up about 15%; raises outlook for 2022 adjusted FCF to $9.5 billion to $10 billion 2022ford_final_3q.pdf 1 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 26, 2022 Share Posted October 26, 2022 Ugh, profit sharing this year is easily going to be the worst of the big 3 Quote Link to comment Share on other sites More sharing options...
j2sys Posted October 26, 2022 Share Posted October 26, 2022 Yep, Argo AI is no more. Quote "In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company," Argo spokeswoman Catherine Johnsmeyer said in a statement. "Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end." Details on what will happen to the technology weren't immediately provided. It also was unclear how many employees would receive job offers. In July, it had more than 2,000 employees. TechCrunch first reported the news on Wednesday. https://www.detroitnews.com/story/business/autos/ford/2022/10/26/ford-volkswagen-absorb-autonomous-vehicle-partner-argo-ai/69593902007/ 1 Quote Link to comment Share on other sites More sharing options...
Harley Lover Posted October 26, 2022 Share Posted October 26, 2022 25 minutes ago, j2sys said: Yep, Argo AI is no more. Another Jim Hackett mistake. 1 1 Quote Link to comment Share on other sites More sharing options...
Captainp4 Posted October 26, 2022 Share Posted October 26, 2022 So we're down to 5% margin if I skimmed that correctly? 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted October 26, 2022 Author Share Posted October 26, 2022 1 hour ago, Harley Lover said: Another Jim Hackett mistake. On the contrary, when Ford initially invested in Argo AI 5 years ago, it was a very smart move on Jim Hackett's part. At the time, Argo AI had some of the best autonomous vehicle engineering expertise of any company in the world, and later established a partnership with Carnegie-Mellon University, where research on self-driving vehicles was pioneered nearly 40 years ago. As mentioned earlier, Argo AI enabled Ford to be the first company in the world to test Level 4 robotaxi in 2 U.S. cities at the same time, with no safety drivers. Ford's announcement that it will focus on Level 2 and Level 3 ADAS following the closing of Argo AI is a step backward for sure. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted October 26, 2022 Author Share Posted October 26, 2022 1 hour ago, Captainp4 said: So we're down to 5% margin if I skimmed that correctly? You got it Captainp4, 4.6% EBIT margin in Q3 2022 for Ford's automotive operations globally, and 5.0% in North America. 1 1 Quote Link to comment Share on other sites More sharing options...
mackinaw Posted October 26, 2022 Share Posted October 26, 2022 Glad they finally dumped Argo. A money sink with no future. Spend the $$$ elsewhere. 2 Quote Link to comment Share on other sites More sharing options...
Gurgeh Posted October 26, 2022 Share Posted October 26, 2022 Here are some bits from the Bloomberg article on this. In short, it is harder than a moonshot, a huge money sink, and unlikely to actually work anytime in the near-to-medium future. They are now going to focus on drivers assistance technologies that will provide real benefits to real drivers. ------------------- https://finance.yahoo.com/news/ford-vw-shut-self-driving-223820816.html “Profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves,” Ford Chief Executive Officer Jim Farley said in a statement Wednesday. Argo’s demise shows how swiftly the fortunes of the autonomous driving industry have turned, just 18 months after it was eyeing an initial public offering to boost its funding... Expectations of an imminent rollout of robocars have deflated across the industry. Shares in companies spearheading development such as Aurora Innovation Inc. have plunged some 80% this year, while Intel Inc. listed its Mobileye autonomous-driving business at less than half of the $50 billion it reportedly targeted less than a year ago... Ford Chief Financial Officer John Lawler said Wednesday that the company determined it would take more than five years to see a return on its investment in full self-driving. Farley said it also would require billions more in investment. “It’s harder than putting a man on the moon” to create a robotaxi capable of navigating in a dense urban landscape, said Doug Field, Ford’s chief advanced product development and technology officer... 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted October 27, 2022 Author Share Posted October 27, 2022 3 hours ago, fuzzymoomoo said: Ugh, profit sharing this year is easily going to be the worst of the big 3 EBIT adjusted margin summary for Q3 2022. Ford: 4.6% General Motors: 10.2% Tesla: 23.2% 2 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 27, 2022 Share Posted October 27, 2022 40 minutes ago, rperez817 said: EBIT adjusted margin summary for Q3 2022. Ford: 4.6% General Motors: 10.2% Tesla: 23.2% Tesla is completely irrelevant to my point. They don’t get profit sharing the same way us, GM and Stellantis do. Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted October 27, 2022 Share Posted October 27, 2022 Self driving cars are pie in the sky at this point-IMO it was just tech companies overselling what they could actually do. There needs to be a huge infrastructure upgrade and a way of tracking everything without infringing on privacy. Both are really expensive to figures out short term. 3 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 27, 2022 Share Posted October 27, 2022 4 hours ago, Gurgeh said: Here are some bits from the Bloomberg article on this. In short, it is harder than a moonshot, a huge money sink, and unlikely to actually work anytime in the near-to-medium future. They are now going to focus on drivers assistance technologies that will provide real benefits to real drivers. I believe several of us have been saying that’s what would happen for a few years now. 3 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 27, 2022 Share Posted October 27, 2022 The Argo write off and 40k unfinished vehicles hurt the numbers this quarter, but outlook for the year still looks pretty good. 2 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 27, 2022 Share Posted October 27, 2022 5 hours ago, akirby said: The Argo write off and 40k unfinished vehicles hurt the numbers this quarter, but outlook for the year still looks pretty good. Absolutely true. As mentioned, this is a big paper write off and will actually be offset a bunch of tax on this financial year. Without the paper loss, Ford’s Q3 EBIT was $1.8 billion even with those 40k incomplete vehicles waiting for parts. I think Ford is anticipating a better Q4 that sees those vehicles completed, sold and more cash coming in. People don’t seem to get that Ford has $32 billion in cash sitting there and will add to that next quarter. All those BEV plant outlays are being paid for, very little if any debt is accruing from BOC. 5 Quote Link to comment Share on other sites More sharing options...
passis Posted October 27, 2022 Share Posted October 27, 2022 14 hours ago, rperez817 said: Our colleagues will correct me if I am wrong but it seems that South America is not doing so bad any longer - despite terrible volumes. 1 Quote Link to comment Share on other sites More sharing options...
rperez817 Posted October 27, 2022 Author Share Posted October 27, 2022 (edited) 12 hours ago, fuzzymoomoo said: Tesla is completely irrelevant to my point. They don’t get profit sharing the same way us, GM and Stellantis do. Thanks for the clarification. I mentioned Tesla in response to "Big 3", assuming the reference was to the 3 largest U.S. automakers. Edited October 27, 2022 by rperez817 1 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 27, 2022 Share Posted October 27, 2022 There’s no way in hell you didn’t know what I was referring to…. Quote Link to comment Share on other sites More sharing options...
rperez817 Posted October 27, 2022 Author Share Posted October 27, 2022 23 minutes ago, fuzzymoomoo said: There’s no way in hell you didn’t know what I was referring to…. How does profit sharing work for Tesla employees? Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 27, 2022 Share Posted October 27, 2022 25 minutes ago, rperez817 said: How does profit sharing work for Tesla employees? As far as I know, their hourly workers don’t get any 1 Quote Link to comment Share on other sites More sharing options...
Captainp4 Posted October 27, 2022 Share Posted October 27, 2022 3 hours ago, fuzzymoomoo said: As far as I know, their hourly workers don’t get any I thought I heard somewhere they get stock in the company, but maybe that's just salary. 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 27, 2022 Share Posted October 27, 2022 (edited) 3 hours ago, Captainp4 said: I thought I heard somewhere they get stock in the company, but maybe that's just salary. Tesla employees are not given stock, they get options to buy it at around 85% of price. Edited October 27, 2022 by jpd80 1 1 Quote Link to comment Share on other sites More sharing options...
Captainp4 Posted October 27, 2022 Share Posted October 27, 2022 23 minutes ago, jpd80 said: Employees are not given stock, they get options to buy it At around 85% of price. Just wait until Elon tweets something walstreet doesn't like and buy it up Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 27, 2022 Share Posted October 27, 2022 (edited) The point others were making is that Tesla does not give away money in terms of production bonuses to employees nor do they even pay a dividend to stock holders. Tesla keeps a lot of crash that would normally be bled away by legacy auto, they don’t rely on huge advertising contracts to move their product, that’s why their return is so high. Edited October 27, 2022 by jpd80 1 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 27, 2022 Share Posted October 27, 2022 Also while Ford seeks at least 10% return on revenue I think they will take any profits at the moment the way production is being hampered by supply. They still intend delivering above $9 billion return for 2022, that’s a massive commitment and one achieved by killing as many bleeding losses as possible (paper losses from Rivian and Argo AI will be the tax deductions that get them over the line) Quote Link to comment Share on other sites More sharing options...
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