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The task of shifting the car industry from metal bashing and combustion engines to software and batteries is fraught with danger for incumbents such as Ford Motor Co. A big strength of Ford’s new boss Jim Farley is making the bridging of that epochal divide sound simple.
The no-nonsense chief executive officer laid out how he plans to lead Ford into the electric era. By doubling down on the company’s core strengths in pickup trucks, commercial vehicles and sportscars with attractive, keenly priced electric versions of the F-150, Transit and Mustang, Farley aims to change the narrative that the Detroit giant is a laggard in electric vehicles.
Judging by Ford’s share price and its resilient first-quarter earnings, the strategy is starting to take hold.
Ford has been a lousy investment over the past couple of decades, save for those shareholders who correctly identified key inflection points. A decade ago former Boeing executive Alan Mulally helped Ford skirt bankruptcy by mortgaging its assets and selling non-core brands such as Jaguar and Volvo. Worth barely
$1 at the low in 2008, the shares surged 1,400% in the next couple of years.
A comparable turnaround looks underway now. Ford scrapped its dividend, lost its investment-grade credit rating and parted ways with boss Jim Hackett last year. The former furniture executive’s visionary buzzwords, a botched model launch and the perceived slow pace of change didn’t convince the investment community. Hired by Mulally from
Toyota in 2007 for his marketing expertise, car-mad Farley inspires more confidence. The stock has more than trebled since a March 2020 low.
In fairness, much of the heavy restructuring needed to finance Ford’s electric ambitions was in motion before Farley took over.
—Bloomberg