Thank you very much for everything that hankett has done to modernize Ford and prepare for future competitive victories. Bill Ford, executive chairman of Ford, said of hankett. But capital markets have lost patience with the retiring CEO. After Ford announced hanketts retirement, Fords share price rose more than 3% in pre market trading on the same day, which had been in a downturn.
Wall Street lost patience with hankett
Hankett, 65, has been Fords CEO since May 2017. At that time, Fords share price was down nearly 36%. As Mark Fields led the intelligent transformation is too radical, so that Ford put too much energy into the new business, leading to the loss of its traditional business.
At that time, hankett, who had moved from a furniture company, was highly expected by Ford. They expected that the aura Mulally brought to Ford could continue in hanketts hands.
After taking office, hankett did make some business adjustments. He eliminated the money losing cars in Fords North American lineup and moved to more profitable pickup trucks and SUVs, forming alliances with Volkswagen, Indian car manufacturers Mahindra and rivian to deepen cooperation on electric platforms, commercial vehicles and pickups. In addition, hankett has accelerated plans to develop electric vehicles.
However, so far, hanketts series of measures have little impact on Fords profit and share price. Fords profits fell in 2018 and 2019, falling to $47 million last year. In 2020, the global pandemic will make Ford even worse. In the first quarter of 2020, Ford had a net loss of $2 billion.
In terms of stock price performance and market valuation, Fords share price has fallen more in the past two years than during Mark Fieldss tenure. Between 2014 and 2017, when fields was CEO, Fords share price fell about 36%. Fords share price has fallen nearly 40% since hankett took over in 2017.
Under hanketts leadership, Fords share price has been in a slump for years, and Wall Street has lost confidence in Ford, said Jessica Caldwell, an analyst at Edmunds auto trading website
Erik Gordon, a professor at the University of Michigans business school, believes that hankett faces technical changes and current operational challenges without experience in the technology or automotive industry.
Its worth noting that Fords share price soared more than 3% on August 4 after the succession plan was released, closing at $6.77. At the end of August 7, Ford shares fell 1.01% to close at $6.86, with a market capitalization of $27.29 billion.
Farleys mission: defeat Tesla
Unlike hankett, Jim Farley is an Autobot. Jim Farley, 58, worked for Toyota before joining Ford. In 2007, Farley joined Ford, initially as head of global marketing and sales, then became responsible for the Lincoln brand and Fords global marketing operations in South America, Europe and Ford. In April 2019, Farley was appointed president of emerging business, technology and corporate strategy, responsible for the Internet of vehicles, artificial intelligence, autonomous driving and new energy vehicles. In February this year, Fords management was reorganized, and Farley was appointed chief operating officer to report to hankett.
In Farleys view, todays competitors are not limited to traditional automobile companies. His first task is to make a smooth transition of the leadership, determine and accelerate Fords North American business to achieve a 10% profit margin, and accelerate growth businesses such as connectivity and electric vehicles, so as to better compete with automobile companies such as Tesla.
However, with the slow recovery of the automobile industry during the epidemic, Farley is facing severe challenges. At present, Ford is facing a loss, and in the process of alternating new and old models, and to electric transformation. At the same time, Ford proposed a restructuring plan of $11 billion in 2018 to reduce costs and profit from its autopilot business. In addition, the high cost of warranty is also considered one of Fords weaknesses. According to Farley, Ford needs to cut its warranty costs by $5 billion, launch 10 key models worldwide in the next two years, and substantially cut material and logistics costs.
In Farleys plan, several new products, including Mustang mach-e all electric crossover, redesigned Ford F-150 pickup and bronco sportsuv, will be launched by the end of this year. Meanwhile, Ford Bronco SUV will be launched next year, and pure electric F-150 is planned to be launched in mid-2022. Farley has a natural sense of cars and customers, and a good intuition about the future and new technologies that will change the automotive industry. I see him as a transformational leader who is helping Ford thrive with determination and vision. Said Bill Ford. According to financial reports, Ford lost $1.9 billion in pre tax revenue in the second quarter of this year, continuing the decline in the first quarter. This figure is lower than its initial expected loss of $5 billion, and the growth of its autopilot value has brought us $1 billion in revenue. We need to compete seriously with Tesla and we have the ability to do that with the F series. Said Farley. This article source: Daily Economic News Author: Li Xing, intern reporter, long Yingru, responsible editor: Wang Xiaowu_ NF
In Farleys plan, several new products, including Mustang mach-e all electric crossover, redesigned Ford F-150 pickup and bronco sportsuv, will be launched by the end of this year. Meanwhile, Ford Bronco SUV will be launched next year, and pure electric F-150 is planned to be launched in mid-2022.
According to financial reports, Ford lost $1.9 billion in pre tax revenue in the second quarter of this year, continuing the decline in the first quarter. This figure is lower than its initial expected loss of $5 billion, and the growth of its autopilot value has brought us $1 billion in revenue.
We need to compete seriously with Tesla and we have the ability to do that with the F series. Said Farley.