Moody’s downgraded the Ford Motor Company this week from stable to negative which alerts Wall Street that Ford’s situation is dynamic. Earlier this week, Ford also posted disappointing quarterly profits. The company blamed rising metal prices and CFO Bob Shanks remarked, “We have to be far fitter than we are.” In October, Ford announced it would cut $14 billion in costs and drop some car models in order to better focus on SUVs and trucks. Newly minted CEO Jim Hackett said that costs have risen 29 percent since 2010, nearly as fast as revenue which increased 30 percent during the same period.
Is Ford in trouble?
Money is not the only problem. Ford also has a reliability problem which hurts its brand with consumers. Here is just a sampling of articles about Ford since July 2017.
- Ford again urged to recall Explorers for exhaust leaks before ‘luck runs out’
- Airbag Defect in Ford Rangers blamed for 21 deaths
- Ford Sued by Truck Owners, adding it to Diesel Defendants
- Ford Recall Woes Continue with 200K vehicles at Fire Risk
- Ford Sudden-Downshifting Recall May Expand (1,200,000 more vehicles could be added)
- Ford Recalls 177,000 Pickups and SUVs for Seat Issue
- 2010 Ford Fusion Power Steering Assist Faults Investigated
- Class-Action Lawsuit Brought Against Ford over Loose Steering Wheels in Fusion Sedan
- Ford recalls 1.3 million trucks over a door latch issue
- Ford recalls 143,000 vehicles in U.S., including F-150, Mustang, Explorer, Focus, Taurus for a seatbelt buckle
- Ford sued over ‘inferior design’ of lug nuts
- Judge pares down class action over Ford Emissions Defect
- Ford recalling 117,000 vehicles for safety defect
- Ford to petition to avoid U.S. recall of 2.5 million vehicles over Takata Airbags
See the pattern?
If Ford and any other automaker cannot even get a bolt, a seat belt latch, door latch, a steering wheel, and exhaust systems correct before they find their way to our driveways, how can we trust this company or any company to make sure that the connected and driverless car of the future gets us safely to and fro?
Last year, Ford promoted the idea of mobility as a service…and the company sees itself as one of the leaders in this realm. CEO Jim Hackett promoted Ford as a leader last month at CES:
“With the power of AI and the rise of autonomous and connected vehicles, for the first time in a century, we have mobility technology that won’t incrementally improve the old system but can completely disrupt it. A total redesign of the surface transportation system with humans and community at the center.”
This week, Ford announced that it wants to be the operating platform or the Transportation Mobility Cloud for connected driverless vehicles. The company has just purchased Autonomic, a Palo Alto-based company working on a mobility cloud platform and TransLoc, a 14-year-old company based in Durham, North Carolina that is working on transportation systems software. Both companies will allow Ford to build its cloud platform and company officials are hoping to monetize this new project as soon as possible. TransLoc CEO Doug Kaufman said, “Ford is interested in taking the streets back in the city, and getting more people out of single occupancy cars.”
This pivot away from traditional car manufacturing might just be a Peter Pan fantasy or maybe the company has a real shot at pivoting into the future. In order to be a platform though, Ford will have to convince other cities, automakers and other important potential businesses to come out and play.
So is Ford in trouble or is it just riding the wave of the current disruption of the auto industry? In 2015, Ford Executive Chairman Bill Ford told WIRED magazine that, “The bigger risk is doing nothing.”
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