Ford Recalls Put Its Turnaround in Jeopardy
Ford's quarterly statements are plagued by recall write-offs. Management lacks the skills to solve what Ford has admitted is key to a successful future. The post Ford Recalls Put Its Turnaround in Jeopardy appeared first on 24/7 Wall St..
In August 2022, senior management at Ford Motor Co. (NYSE: F) acknowledged that the company had a huge quality problem—the worst among the world’s largest car companies. The Wall Street Journal ran a lengthy article that month titled “At Ford, Quality is Now Problem No 1.” Recalls were the yardstick used. Jim Farley Ford’s CEO remarked, “We continue to be hampered by recalls and customer satisfaction actions. This affects our cost but more importantly, it falls short on our most fundamental commitment to our customers.”
24/7 Wall St. Key Points:
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Ford Motor Co.’s (NYSE: F) quarterly statements are plagued by recall write-offs.
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Management lacks the skills to solve what Ford has admitted is key to a successful future.
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Despite Farley’s comments and a list of comments about planned improvements, recall write-offs plagued Ford’s quarterly statements. As recently as last fall, Farley said, “Cost, especially warranty, has held back our earnings power, but as we bend that curve, there is significant financial upside for investors.” The bend has not happened.
A 273,000-unit recall just hit Ford. According to the National Highway Traffic Safety Administration, it covered some 2022-2024 model Navigator and Expedition vehicles. Faulty brakes were part of the reason. They create the “risk of a crash.”
The new news goes to the heart of whether current management has the skills to solve what Ford has admitted is key to a successful future. It has now been years without success.
Ford wants to maintain its position as a major player in the gasoline-powered car business, which generates all its profits. It also wants to move into the electric vehicle (EV) segment and compete with Tesla and Chinese EV companies that sell vehicles in China and other parts of the world. Tariffs have kept Chinese EV companies out of the United States, but President Trump has taken tariffs off and on and off on Chinese imports.
The president cannot make Ford successful, tariffs or not.
Ford continues to have a careless culture. It has not detailed its plans to solve the quality issue, and because of this, investors have abandoned it. Its stock is down 13% over the past year.
Investors do not believe Ford’s promise.
Ford’s 8% Yield Is an Idiot Test
The post Ford Recalls Put Its Turnaround in Jeopardy appeared first on 24/7 Wall St..
