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[00:00:04] Doug McIntyre: You mentioned to me Ford had another recall.
[00:00:07] Lee Jackson: They did. And since you’re our in-house Ford expert, at what point do investors, especially institutional investors, just throw in the towel here?
[00:00:19] Doug McIntyre: there are a few things about recalls. The first one is, is that they say, we’re not gonna charge you anything.
[00:00:23] Doug McIntyre: You get the notice. Oh, that’s thoughtful. Oh gee, thanks. I really appreciate that. I gotta drive to the dealer and sit around and wait for everybody else whose car has been recalled. That’s right. Right. So I burn, I burn a day or something at least. The next thing is, is that they have recalled more cars in the first half of the year than in all of last year.
[00:00:44] Doug McIntyre: Okay. This year they will recall way more cars than they bill. Okay. Recall more. It seems impossible, but Okay. It seems like, how’s that math? because the recalls often cover years, the public just looks at these ceaseless recalls and says, why would I buy a car where the company has all these recalls?
[00:01:10] Doug McIntyre: Why would I fly on an airline that’s using Boeing’s (NYSE: BA) that may not work. the answer is, is I think I’ll take another airline. Bill Ford, the guy who runs this place, the number of unforced hes, and as warranty charges last year, were in the billions of dollars in terms of hits on earnings.
[00:01:30] Lee Jackson: they have to reimburse the, the dealerships
[00:01:33] Doug McIntyre: they get on the calls. Farley, the CEO and sometimes the CFO. We’re gonna get better. We’re gonna get better. They’ve been doing this for years, not it’s, this year may be their worst recall year after promising forever that this isn’t gonna happen anymore.
[00:01:49] Doug McIntyre: Right? So you’ve got, you’ve got write offs, you’ve got customers being incredibly. Listen, they, they, they shot themselves in the feet in EVs, but at at least it’s an honest mistake. Okay. Yeah. A lot of big legacy car companies put money into EVs. They got bloodied. Maybe Ford did it worse than other people, but it’s an honest mistake.
[00:02:13] Doug McIntyre: Warranties on gas powered cars is when you’re the gas powered car. Right.
[00:02:19] Lee Jackson: That that’s engineering errors and production errors and things of that nature and Yeah. Yeah.
[00:02:26] Doug McIntyre: And you’re an expert in, you’re an expert in gas powered cars, and they did recall the mock. I think the Mustang Mach e but that’s, that’s the only recall I think they’ve had of an EV.
[00:02:38] Doug McIntyre: The rest of their recalls are gas powered cars. Yeah. So we’ll go back to this. Ford is an awful company. It’s run poorly. Yeah, I noticed that. They put two of the Ford Next Generation people on the board. They can come onto the board with resumes that show they do not know they have no car company experience, and they can go to the board meetings and learn how not to run a car company.
[00:03:03] Doug McIntyre: So when one of them gets promoted to be the executive chairman, they will not have a resume and to perfect education in how to run a car company really, really badly. So, people say, I’m gonna buy it because of the dividend. Your only protection there really is, is that. The Ford family gets a lot of dividend money.
[00:03:25] Lee Jackson: They own all the stock or a lot of ‘the stock,
[00:03:27] Doug McIntyre: Yeah. controlling shares that, like, I think they’re class B. I think that they’ll protect the dividend because of the Ford family. It’s a good yield. But got, I mean I, I’d go someplace else because if things get bad enough for them and they could, the US car companies are getting penned in now.
[00:03:46] Doug McIntyre: They’re not doing well in Europe, though used to be. China was their biggest market. Was their biggest market in just the last few years. The Chinese EV sector has done so much to blow all the cars, companies, foreign car companies outta there. They can’t count on China. They make a little bit money in Brazil and now the EV from China are moving in there.
[00:04:09] Doug McIntyre: Ford has painted itself into a corner and no matter how bad management is. They’re also, they’re on a very short runway.
[00:04:23] Lee Jackson: we’ve said this before, that it is kind of a, a value trap ’cause it looks like it’s a good, on paper, it looks like it’s a decent buy. You look at the earnings and trading at a reasonable pe but it’s more than a value trap.
[00:04:35] Lee Jackson: It’s dead money because it, it’s just not getting any big institutional money behind it. So it sits there at 10 or 11 and has been for years.
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