Ford Motor Company (NYSE: F) has a new CEO, Jim Hackett -- and soon, we'll hear about the changes he'll be making to the Blue Oval's business plan.
When he took the job back in May, Hackett promised that he'd spend his first 100 days as CEO conducting a thorough review of the state of Ford's business and its current business plan before presenting his own plan. That presentation is now expected to happen on Oct. 3, at a "strategic update" briefing that Ford has scheduled for analysts and media.
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Hackett is a tech-savvy leader who has shown that he can take a big organization through a transformation. It's not too hard to see where he's likely to lead Ford. Already, just in the last week or so, there have been a few hints that Ford is stepping up its efforts with electric vehicles and self-driving technology.
But for investors, Hackett's challenge can be summed up in one simple chart -- and that can help us understand where he's likely to lead Ford.
The chart that shows the challenge facing Hackett
We talk a lot about the Silicon Valley companies that are working to bring new technology-enabled models of mobility to market, and threatening to "disrupt" traditional automakers like Ford in the process.
It's becoming clear to investors that some of the traditional automakers will adapt and thrive in the new world of technology-enabled car-sharing, automated ride-hailing, and so forth -- and some won't.
How's Ford doing? Take a look at this chart:
Ford's stock price is down almost 13% in the last year. Meanwhile, shares of its ancient arch-rival General Motors (NYSE: GM) have risen almost 12% over the same period.
Ford has lots of big competitors around the world, but you can bet that this particular comparison hasn't escaped the notice of Ford's board of directors. In fact, the price-movement discrepancy -- and the story behind it -- might be a big part of why the board decided to replace Mark Fields with Hackett in May.
Let's look at that story.
Why GM is up and Ford is down
GM's stock is doing well, goes the conventional Wall Street wisdom, because it's clearly making big strides with those advanced technologies that have captured the attention of investors:
- Electric cars: GM beat everyone to market, even Tesla, with its first affordable long-range electric vehicle, the Chevrolet Bolt EV.
- Self-driving: San Francisco-based GM subsidiary Cruise Automation has been testing Bolts equipped with prototype self-driving systems in a place that's exceptionally visible to the technology community: On the streets of San Francisco. (There's video.)
- Car-sharing and ride-hailing: GM owns 9% of Lyft and has a seat on the ride-hailing company's board. Another GM subsidiary, Maven, is building out an app-driven car-sharing service in a growing list of U.S. cities -- and has hinted that might try a ride-hailing service of its own.
None of this is to say that Ford has fallen far behind GM. Ford has its own self-driving research program, in conjunction with start-up Argo AI; it was an early adopter of hybrid technology and is working on mass-market electric vehicles of its own; and it has begun laying the groundwork for its own integrated, app-driven urban mobility service.
And none of this is to say that GM is reaping fat profits from its efforts that Ford is missing out on. (It's likely that none of these initiatives are profitable right now, for either automaker.)
But GM's efforts have been more visible, and GM talks about its expectations for profit growth very differently.
This is partly a communications problem
Under Fields, Ford talked a lot about how much it plans to spend on self-driving cars and electrified vehicle drivetrains. It dropped hints about where its mobility-related businesses might be headed.
But it never showed its cards clearly. It never told investors how or when all of this work is likely to contribute to the bottom line. Contrast with GM, where CEO Mary Barra talks clearly about her expectations for profit growth over the next several years.
If his goal is to boost Ford's sliding stock price, Hackett will need to do (at least) two things: Visibly accelerate Ford's future-tech initiatives, and explain how and when they -- and any changes he plans to make to Ford's traditional business -- will pay off.
Speaking as a Ford shareholder, I hope that's the plan for Oct. 3.
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