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DEARBORN, Mich. – When Ford celebrated the 100th anniversary of its Rouge Industrial Complex, its president, William C. Ford Jr., presented an optimistic outlook for the years to come.
The company is still solidly profitable, he said, and while she loses money overseas, she is working on a solution. In addition, he praised the capabilities and leadership of Ford CEO Jim Hackett, who, he said, was doing "a very good job".
"I do not think the situation is close to a crisis," he said.
Everyone does not share his confidence.
The automaker's bottom line is weakening despite record sales of its pickup trucks and SUVs. In August, his credit rating was reduced to a level above the spam status. And Ford's stock price has fallen to its lowest level since 2009, as the US economy was in deep recession.
"Ford's base – the trucks – is still healthy, but one wonders if Ford is ready for tomorrow and the future," said Karl Brauer, executive publisher of automotive information providers Autotrader and Kelley Blue Book. "Ford has not been efficient enough to convince investors that they are."
In the latest move to cut costs, Ford is reorganizing its global payroll of 70,000 people with the goal of having a lean workforce by the second quarter of 2019. This initiative, which will be presented to employees on Thursday, should eliminate several thousand jobs. said Karen Hampton, a spokeswoman for the company.
"We think there will be cuts in the framework, but we do not have specific goals," Ms. Hampton said. She said the reorganization was aimed at speeding up decision-making and reducing the time needed to develop new vehicles, two points that Mr. Hackett insisted on.
The effort was first reported by the Detroit Free Press.
Part of the frustration among those who evaluate the business stems from the slow pace of Mr. Hackett's stimulus package. Since taking office in May 2017, Hackett has set general goals for cost reduction, but has not explained how it will be achieved. Ford had already scheduled a one-day meeting with Wall Street analysts on September 25, but canceled it in July, saying it needed more time.
Elements of the plan emerge little by little. Beyond the reduction of hired labor, another initiative involves partnerships.
Ford is in talks with Volkswagen over a broad alliance that could help turn its troubled business into Europe and South America. He also discusses ways to extend cooperation with Mahindra, the Indian automaker. India is another market where Ford is struggling.
Mr. Ford, a great-grandson of company founder Henry Ford, took note of the discussions at the Rouge complex, which now houses a factory producing the F-150 pickup truck.
"We never rely on a partner to solve the problem for us," he said. "We have to get our house in order first. Partnerships can help with the intensity of capital and things like that. "
According to analysts, a partnership with Volkswagen could help both companies. Ford earns money on delivery vans and other small trucks, an area in which Volkswagen struggles. The cooperation could include helping Volkswagen produce small trucks like the Ford Ranger and sharing the costs of developing electric vehicles and other technologies to meet more stringent emissions regulations in Europe.
"Volkswagen is really intriguing," said Brian Johnson of Barclays Capital. "You can certainly see the business logic behind all this."
A century ago, Ford revolutionized car manufacturing by opening the Red Complex. A marvel in her day, she made cars and all their parts, including glass, tires and engines. She produced her own electricity, had a hospital and a police station and employed up to 100,000 people. This vertical integration has allowed Ford to reduce its costs to produce cars that ordinary people could afford.
Today, Ford must again find ways to reduce costs. In July, Hackett said his restructuring plan could cost $ 11 billion over three to five years. This news came as Ford reported a net profit decreased by almost half to $ 1.1 billion in the second quarter.
The emergency was highlighted last week when Hackett told Bloomberg television that the Trump administration's tariffs on imported aluminum and steel would raise Ford's costs by $ 1 billion. The company said the costs would be incurred in 2018 and 2019.
Rates could erode the profit margins of the F-150, with aluminum body panels. But Ford said the builder had taken the rates into account and did not need to change its turnaround plan.
"We just want to work with the administration on trade issues, tariff issues, and they have been very good about it," he said. But Ford "works much better when we have the certainty and we do not have big gyrations," he added. "Our business is optimal when we are certain of tax regimes and commercial regimes".
Ford is praised for the trade agreement that keeps Canada in a commercial zone to three countries in North America. Ford manufactures trucks and sport utility vehicles in Ontario.
Only two years ago, Ford seemed to be the healthiest of the three Detroit automakers. But as he makes solid profits on trucks and SUVs. like the Explorer, the latest earnings reports show he's losing money on his cars. At the same time, profits plummeted in Europe and Asia, efforts to redress the situation in South America have made little progress and returns to North America, by far the largest region of Ford, have collapsed.
"The problem is that they have not sufficiently updated and redesigned their products," said Michelle Krebs, executive analyst at Autotrader. "It comes down to being slow on product decisions and product development."
Ford's vehicle lineup now needs a radical overhaul. In April, the company announced that it stop making sedans for the US market to improve profits. From here a year or two, familiar models such as Fusion, Focus, Fiesta and Taurus will disappear from the showrooms. In their place, Ford is considering new versions of S.U.V.s, trucks and electric vehicles.
Mr. Hackett explained how Ford would make decisions and develop vehicles faster – or increase the company's "clock speed", according to its terms. In June, Ford announced that it had bought the ruined Detroit train station and planned to base it on some 2,000 employees in the autonomous car sector. An effort that Mr. Hackett had launched when he was called to replace Mark Fields. CEO in May 2017.
But his reluctance to clarify the elements of his restructuring plan has shocked analysts who follow the company and try to predict how much it will yield.
Hackett was hailed for his previous position as General Manager of the Steelcase office furniture company, but he faces an increasingly important challenge in the management of Ford, a much larger company with 200,000 employees. dozens of factories in the world.
"We would like him to be more specific in his moves to pass high-level statements to the action plans that they will achieve," said Mr. Johnson of Barclays Capital.
The tension was apparent at a teleconference in July when Morgan Stanley's Adam Jonas expressed frustration at the lack of details on the content of the $ 11 billion charges. He asked Mr. Hackett if he would still be there when evaluating the results.
"I think there should be no question about it," replied Mr. Hackett.
In the meantime, there are still many questions.
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