Somewhere among the dates of the introductions of the Mustang Mach-E electric, the all-new Bronco, the end of the embarrassing tenure of CEO Jim Hackett and the launch of the new Ford EV 150 Lightning, Ford Motor Co. (NYSE: F) rejoined the list of important global car manufacturers.
Hackett’s promise of $11 billion to modernize the Ford fell through. He said he would add 40 hybrid and fully electric vehicles to its model lineup and cut $14 billion in costs. Wall Street became impatient as quarter after quarter passed and nothing happened.
Executive Chair Bill Ford, who really runs the company because of the family’s voting control, sacked him and made Jim Farley CEO on October 1. Bill Ford has just appointed family members Henry Ford III and Alexandra Ford English to the board of directors to strengthen the Ford family’s grip on the company for the next generation. English, a former Gap employee, was a less than perfect fit, but Bill Ford does not really have to ask anyone’s permission.
What is more important than the players is that, somewhere during the Hackett era’s late stages and today, the company’s product management team and engineers began to finish a new series of products. Sales in China had been dismal. As the world’s largest car market, it is critical to all global manufacturers. Ford’s sales rose 73% in the region in the first quarter. Sales of Ford’s luxury brand, Lincoln, have started to do particularly well there.
Ford’s plan to exit the sedan market in the United States also has worked. Its sales rely on the vehicles Americans are buying (crossovers and sport utility vehicles) rather than those they used to buy. In Ford’s case, these are the Escape, Edge and Explorer. The F-150 pickup is still the top-selling vehicle in America, as it has been for decades. It was 39% of Ford’s total U.S. unit sales in the first quarter.
The success of Ford has shown up in its stock price, which is up 52% this year. Ford no longer operates in the shadow of Mary Barra’s General Motors, the shares of which are up 36% in the same period. Ford still has a long climb to become one of the world’s most valuable car companies. Its market cap is $53 billion. Tesla’s is $560 billion. In the eyes of many, even with Ford’s recent success, it belongs to the auto industry’s past just as much as Tesla belongs to its future. Perhaps the Mustang Mach-E and Ford EV 150 Lightning will change that. Sales figures for each of these over the next few quarters may set Ford’s fate among shareholders.
Ford’s revenue rose from $34.3 billion in the first quarter last year to $36.3 billion this year. The bottom line swung from a $2.0 billion loss to a profit of $3.2 billion. Ford said it would be hit by the chip shortage that has and will affect the entire industry.
Who is responsible for Ford’s turnaround? After several failures, Bill Ford, as much as anyone else. He took over in January 1999. He has run through a number of CEOs and gets credit for many of their failures. Now, he gets credit for the company’s current state, which is in its best position in years.