Ford's Wildly Successful Pickup Cannot Save It

Ford Motor Co. (NYSE: F) will release the latest version of its F-150 full-size pickup, the best-selling vehicle in America. By most measures, it has held the top spot since 1981. While the F-150’s success is at the heart of Ford’s financial performance, the new version will do little to pull Ford out of its deeply troubled position among the world’s largest car manufacturers.

Last year, the F-Series unit sales reached 896,526 in the United States. Ford’s total car and light truck sales for the year totaled 2,422,698. The size of the ratio between the figures is breathtaking. No other global manufacturer has a comparable product, in terms of sales. The Boston Consulting Group puts total revenue for the F-Series at $42 billion in 2019.

Yet, F-Series sales are flat in the United States and unlikely to surge as a percentage of Ford’s total. Unit sales have hovered around the same level since America’s annual car sales moved above 17 million in 2015 and held that national level through last year.

Almost every other significant part of Ford’s business is in trouble. The stock market has acknowledged as much. Ford’s stock has been hammered down by 47% in the past two years. The broader market is up 13% in that time.

Ford has two primary problems. The first is in the world’s largest car market, which is China. Ford and its joint venture partners there sold 567,854 vehicles in 2019, an extraordinary drop of 26.1% year over year. It is widely believed that global success in the car industry depends very heavily on success in China.

The second and greater problem is that the reinvention of Ford, the primary goal of CEO Jim Hackett, who has held the job since May 2017, has gone nowhere. It is a combination of cost savings and a major move into the electric and autonomous vehicle businesses. Hackett calls these vehicles the wave of the future. Ford has done nothing, certainly compared to other major manufacturers, to signal that these initiatives have been any success, or will be in the foreseeable future.

Hackett has said he will continue to hold his job indefinitely. That is not his decision. His boss, Executive Chair Bill Ford, makes that call, and he has ousted CEOs who have disappointed him in the past. Earlier this year, Hackett said it was time to accelerate the pace of the turnaround. There is no evidence this has happened.

The F-Series is Ford’s past, even if it remains a stable foundation of the company’s American sales. The pickup is not the company’s future. What is the future? Nothing that is visible.