Although some decisions may be unpopular, there’s no denying General Motors has made quite a few business savvy decisions in the past few years. It has exited markets where it consistently lost money, ceased vehicle production in various countries and has invested in areas ripe for future markets in autonomous and electric vehicles and ride sharing.
Ford, however, hasn’t done much of that. Ford Authority reports The Detroit News columnist Daniel Howes painted a bleak picture for the blue oval in the coming years if it doesn’t act quickly.  He leads his views by saying, “A respected Wall Street analyst says Ford’s earnings outlook could be cut in half in the next 18 to 24 months.” Why the major cut?
“[Ford’s] best-selling F-Series trucks produce the vast majority of its fat profits [and] it’s not moving quickly enough to reshape its global footprint and get out of places where it doesn’t make enough money.”
Again, this all contrasts with GM, which is making money in multiple segments, cutting rental fleet sales, and as mentioned, cut ties with unprofitable markets.
Ford ousted CEO Mark Fields last month and replaced him with Jim Hackett, who was most recently leading the automaker’s Smart Mobility operations. He was CEO of office furniture maker Steelcase for 20 years.
Finally, Howes provides a bit of hindsight. He says former CEO Alan Mullaly took Ford to new levels, but in a traditional sense. Today, that just won’t do.
“The house that Alan built is necessary, but it’s not sufficient for the new world,” Howes said.
Comments
Mary Barra is this year’s flavor. Journalists and Wall Street analysts often indulge in group think failing to question bubles, hype, conventional wisdom and ideas looking fantastic on paper such as the sale of Opel or the output of significant R&D resources on electrification that could easily be sourced from 3ed parties until profitable in the mass market. For example, Ford was lucky to miss out on the gen one Volt and associated expenses.
The “mobility” catch phrase is overly hyped and poorly understood in so far as ride sharing in urban areas probably replacing the taxi and not much else. The real 21st Century challenges will be 1) keeping technology laden cars affordable for purchase and 2) being ready for the transition to autonomous driving which may best be sourced while automakers focus on new, lightweight and interchangeable architectures.
Ford will be fine. Both GM, Ford and the other established brands biggest short term problem will be low cost Chinese imports in a reccessed economy as well as, like in Europe, competition from luxury players through easy lease terms . To combat such challenges consolidation maybe be key.
One day autonomous cars will be rolling off the assembly line and going directly to work shuttling passengers where they need to go. No sitting on a lot waiting to be bought, todays world is all about the recurring transactions. look whose making all the money, every one of us has a phone bill, a satellite or cable bill, utility bill. these industries are making all the money.
GM is riding the front edge of this wave, Ford is not!
I know Jim Hackett, I used to work at Steelcase, until 2003 when he sent California jobs to Mexico.
I hope this report is true! I hope ford gets smacked in the mouth and suffers a long hard down turn. GM went threw it’s problems a few years ago and ford was not willing to help or give any sympathy so I don’t expect any to be given towards ford going forward!
Long live GM!
A 60 year-old Steelcase ex-CEO gives us his vision of the the automotive future.
So throw Fields under the bus (you were a board member under his tenure, yes?). Then he’ll likely go Ackerson – improve the bottom line (read, layoffs and off-shoring) – while they search for someone with some auto (sorry, mobility) experience.
He’s a temporary solution.
I am not a Ford fan but I respect their strengths. The alloy bodied F150s showed foresight and they are remaining in the European market because they have a far better appreciating of consumer tastes than GM/Opel and their cars are properly tailored to these needs. GM may have the upper hand in North America, China and South America but elsewhere Ford is most competitive.
Ford also has a longer term outlook to its investment appeal rather than trying to chase the next quarter’s share value. While GM may be focusing more on its business, Ford tends to be targeting its product and market. Both management approaches are equally important. Don’t write Ford off too soon.
Silverado sierra Colorado and canyon have alloy bodies also.
Yes they do have some parts and will gain more along with other materials. GM is taking a wide open approach to thiS.
Rolled inner high strength steel bed boxes welded to aluminum quarter panels with composite trim and magnesium inner bracing. Bolts cut to fit and other technical detail like used on the CT6
“Ford tends to be targeting its product and market” is that why they put the one responsible for Smart Mobility in charge? What is Fords “Smart Mobility”? The integration of Microsoft in the dash? Good job Jim!
GM is not out to lunch here as their info systems are seen as some of the industries best.
Just look at the reviews many will pan parts of the vehicle but the info system always gets praise out side the old Cue.
This is the full deal.
Ford was a mess till Alan Mullaly came in and tried to correct the waste and efficiency of their ways. He did a great job guiding them financially out of near bankruptcy by leveraging their plants and cutting cost with production.
But Alan fell short on Product. He was trying to limit engines, platforms and brands. He killed Mercury and would have killed Lincoln if he had not left. The was trying to pawn a Full size Ford as a premium car under the platinum brand. This all failed miserably.
Alan leaves and a product guy Mark Fields comes in. Not a bad guy as he sheapard in new models and a new Lincoln. But Mark failed to continue cutting cost and waste as Fords profits were not maximizing the return on investment. The aluminum trucks did well but still are not returning the profit increases needed today. It is no longer enough to just make mone you need to maximize the return on investments.
Mark did not handle the financial end well and paid the price by being shown the door.
I fear the new CEO while will increase the return on investment will have problems unless he is given a really good product guy to sit to his right directing him on the right product to invest in. This will need to be watched and if he gets the right person then things should smooth out.
Now beware this could impact products like the GT and other coool products that have little to no real return for the investment.
GM on the other hand is doing well because we have Mary a very good manager. She has to her left Dan Ammann who has managed the waste and spending at GM. To her right she has Mark Ruess who is the right product guy to work with her and Dan to get the right product and to max the return on investment. The three have put GM in a better place than they have been in for decades.
While it has not been all smooth sailing due to very challenging market conditions and stock market conditions they have stabled the ship as Ford and a FCA both struggle much more.
The plan GM has is a long range plan and while it is not always exciting or fast changing they are turning the ship and righting the course.
Not all things they do are going to be home runs but the team who plays most efficiently can win going away with a few singles and doubles with a good defense.
Too many today look at the auto industry and expect things to be as it once was. That game is in the past and new strategies are not needed and in play.
If GM operated like they did in the 60’s today they would not last a year.
The autonomous car and other advanced technologies are still a good ways off . While we many be able to build them the world is just not fully suited to accept them yet. The human factor is still a problem as is the cost.
But the work on this excites investors and makes a sluggish auto industry look like a tech company.
Also I think some mfg are looking to sell in part to some of the tech companies that have the technology but not the production. I can see GM working with a Apple, or Intell to make future products for great profit for each.
I am not a Ford fan but we need to pray Ford regains traction as our country needs them and the competition only sharpens GMs resolve.