Ford Motor is a mess.

While Ford quality is an issue today, the company has a vision for the future and it includes Ford Co-Pilot360. This includes standard automatic emergency braking with pedestrian detection, blind spot information system, lane keeping system, rear backup camera and auto high beam lighting. Ford Co-Pilot360 will roll out across Ford’s new passenger cars, SUVs and trucks up to F-150 in North America, starting on the new 2019 Ford Edge and Edge ST this fall.

The question is, will Ford clean up its mess quickly? Or is Ford back in the sort of downward spiral that led to near-bankruptcy towards the end of the last decade – a crisis that forced Ford to leverage every asset, including the Ford logo, to fund a complete remake of its products, services and marketing under a new CEO recruited from Boeing?

Adam Jonas believes in the former, not the latter. Jonas, the Morgan Stanley auto analyst most famous for touting Tesla, is among the optimists who have entered into a new romance with Ford.

Jonas believes Ford is in the early stages of a turnaround that will see Ford’s shares jump more than 40 per cent – to $16 from the current $11.15 (all figures in U.S. dollars). Jonas loves the profitability of the F-Series pickup and other Ford trucks, and he sees opportunity for Ford to profit from a boost in U.S. infrastructure spending.

Wow! Jonas has long considered Ford an underperforming dog. This This change of heart is noteworthy, no shocking.

Keep n mind that auto analysts, especially those at big institutional investment banks like Morgan Stanley, look at car companies through the lens of opportunity, not as owners of the actual product. Analysts, in addition, are employed who frequently profit most from share offerings and other financial services done for the very companies their analysts cover.

In a perfect world, analysts independently assess a company’s numbers – sales, profits, yield, etc. – and make an upside or downside prediction designed to steer investors to profits.
Perhaps Jonas is correct, then, that there’s value in Ford and you stand a good chance of earning a pretty buck on a Ford investment.

Part of Ford’s new strategy includes going all-in on hybrids to bring more capability to customers of our most popular and high-volume vehicles like F-150, Mustang, Explorer, Escape and Bronco – and serve as a hedge for customers against higher gas prices.

But I don’t think so, even now, as Ford’s leadership appears desperate to convince us that Ford is a forward-looking technology company with a smart plan for the future. Ford wants us to believe this is a cutting-edge carmaker with a grand and brilliant vision for the future.

I am unconvinced so far by Ford’s plans for a massive push into electrification and autonomous vehicle technology. The new initiatives may work. But what we’ve seen to date is unoriginal; every car company has been saying these things for years.

In the meantime, consider the mess that Ford is today, right now. And let’s start with quality.

Ford’s quality is terrible. The Ford brand ranks well below average in J.D. Power’s latest three-year Vehicle Dependability Study (VDS). True, Ford isn’t at the very bottom of the study, with Jeep, Fiat, Land Rover and Chrysler. But Ford is nowhere near industry leaders Lexus, Porsche, Buick and Infiniti.

There’s more. In Consumer Reports most recent brand ranking, Ford is ranked 20th out of 34 brands, while Lincoln is No. 17. Terrible, though in fairness, the F-Series is CR’s top-ranked pickup.

Where the profits are: Ford’s truck business will continue growing as the company adds new models and powertrains with an eye toward continued growth in high-end trims. Some highlights include: a new 3.0-liter Power Stroke® diesel engine for F-150 and updated version of the popular F-150 Raptor in 2018; the return of Ranger to the midsize truck segment and the debut of a new F-Series Super Duty in 2019; and a new F-150 with new hybrid powertrain featuring a mobile generator in 2020.

I’d wager that if you know someone who’s owned a Ford in the last decade, that person has gone through one, two, three or more transmissions. Jeff D., for instance, went through three trannies with his Explorer over 10 years, until moving along to something European. Donna C. has suffered through three new gearboxes for her Focus hatchback. Do your research on recalls and you’ll see Ford has not just transmission woes but suffers with recurring problems all over.

There is no excuse for bad quality, not in this automotive environment. But Ford quality has been disastrous for years. Poor quality has a negative effect on resale values and it turns off existing owners, forcing the company to spend extra to draw in new buyers who have not yet suffered through problem-plagued cars and trucks.

This brings me to management. Ford is also in the midst of a major management re-shuffle. There is uncertainty at the top and that’s never a good thing.

Ford’s new CEO, Jim Hackett, made his management bones running a business furniture company, followed by a short stint as a college athletic director. Selling work stations and overseeing a football program are not what you’d expect to find on the resume of a global car company chief.

A notch down from Hackett, there also appears to be turmoil. Case in point: Ford replaced its head of The Americas and the former product chief in a surprise move that smells of scandal, though details remain scant.

The all-new Ford Bronco will be one of eight SUVs in Ford’s North American lineup by 2020 — and one of two off-road SUV offerings.

Ford makes virtually all its money in North America (selling pickups and SUVs). A messy situation at the top of Ford’s most important region is not good for business. The new Americas head made his reputation running Lincoln. Lincoln? Another lagging luxury brand, one loaded with Fords in tuxedos.

And sales? Ugly.

In Canada, Ford lost more than a point of market share this year – with sales down 3.4 per cent. This compares to chief rival General Motors Canada, with sales UP 11.7 per cent this year.

The U.S. story is troubling, too. Ford posted a 6.9 per cent decrease in U.S. auto sales during February 2018 compared with February 2017. Ford’s car and SUV sales slumped in the double digits, though the F-Series remained strong (up 9.3 per cent in February).

Ford’s Explorer, Edge and Escape SUVs are also doing well enough. Strong truck sales are reflected in transaction prices that in the U.S. are above average. Still, Ford has a lot of unsold inventory sitting around on lots.

Then there’s China. Not good at all. Sales there were down 18 per cent in January. Ford remains a relative bit player in China, at least compared to rivals such as GM and Volkswagen.

Ford is rightly focused on China and this may yet become a good news story – if Chinese buyers prove to be as excited about light trucks as Americans and Canadians. Ford is also now touting a big push into autonomous vehicle technology and electrification of future models.

Ah, the future. Car companies love to talk about it when the present is unpleasant. Ford is no different.

Ford plans to drive SUV growth with two all-new off-road models: the new Bronco and a yet-to-be-named off-road small utility – both designed to win a growing number of people who love getting away and spending time outdoors with their families and friends.

Ford, we’re told, will have its freshest lineup ever by – wait for it – 2020. That’s two years from now.

Ford plans to have a fleet of “smart vehicles in a smart world.” Look for an explosion in electrified vehicles, and “full connectivity” that will allow Ford to do what Tesla already does – deliver “over-the-air updates” via the “Transportation Mobility Cloud.”

A few details. By 2020, Ford expects to replace 75 per cent of its current portfolio and add four new SUVs.

Ford will offer hybrid-electric versions of vehicles such as the F-150, Mustang, Explorer, Escape and Bronco. And Ford will sell a high-performance battery electric ride by 2020, with six more battery-driven vehicles by 2022.

For some context: Volkswagen claims that one in four new VW models will be all-electric by 2025. So, VW will introduce 30 new electric vehicles by 2025. By 2030, VW expects to have at least one hybrid or electric version of every model in its lineup. The goal is to have EV sales account for 25 per cent of all VW Group sales.

In the midst of all this EV talk, Ford is also touting its new 3.0-litre Power Stroke diesel for the F-150. Diesel? VW’s product plan is intended to erase the stain of Dieselgate.

Moving on…

Autonomous vehicles: Ford is now touting something called Co-Pilot360™, a technology “package that includes standard automatic emergency braking, blind spot warning and other driver assist features.” Ah, Tesla, GM, Nissan, Daimler, Audi and others have been aggressively touting AV technology for quite some time now. Ford leaves me unimpressed.

Let me summarize: Ford is moving $7 billion in R & D money from cars to SUVs. By 2020, Ford will offer eight SUVs, five of which will have hybrid drive available and one battery electric. There are two new off-road models coming, too – the new Bronco and an unnamed small utility. And Ford plans to catch rivals and apparently pass them in AV technology.

Ford Co-Pilot360 comparison

We’ll see.

I can say this: Ford has a lot on the go and by the early part of the next decade we may all be looking in wonderment at the brilliance of the new leadership. But between then and now, I’ll be looking at things more mundane, with quality first and foremost.

When Ford is among the world leaders in quality and resale value, and when my friends, family, readers and viewers cease to tell me horror stories about Ford’s transmission woes and the like, then I will believe that Ford has cleaned up its mess.

Comments are closed.