“Come on recession, we’re ready for you.”
Ford CEO Jim Hackett stands in the midst of an $11 billion global restructuring plan. Over the coming months and years, he aims to reshape the company into something that can weather the next recession when it happens. Speaking at a Detroit Economic Club lunch on Tuesday, he stated that 2019 will be the “year of execution” in that plan, according to an Automotive News report.
That is a tall order, as Ford experienced a disappointing 2018. Total year-end sales figures across both Ford and Lincoln brands were down. The company’s profit margin was down to 4.4 percent from 6.1 percent in 2017, and its stock prices have fallen 16 percent since Hackett took the reins in 2017. Speaking of 2018’s performance, Hackett said, “No one in the company was proud.”
Now, however, he said the efforts of the company’s massive restructuring project are coming to fruition. “We’re turning the corner. Just trust me on this. You’re going to be reading a lot about Ford performance going forward.” To that end, Ford is throwing its hat in the ring of autonomous vehicles, which Hackett said will be ready by 2021. The company is also working on a partnership with Volkswagen to develop commercial vehicles.
Some are doubtful
“Part of this mindset is — not to be recession-proof — but to say, ‘Come in recession, we’re ready for you.'” Ford has recently updated much of its lineup, including the new Ranger, Explorer and Escape. From there, we’re expecting the Mustang Shelby GT500 later this year. Then there’s the new Super Duty coming, and there are rumblings about the latest F-150.
Still, investors and industry analysts are skeptical. According to the Detroit Free Press, Morgan Stanley analyst Adam Jonas said Fiat Chrysler and General Motors are the “top” companies to watch. Ford cut several thousand European jobs in January as uncertainty mounts over Brexit. In the United States, tariffs may seriously impact the company’s performance in 2019. The company’s future success also depends on its ability to extract the most benefit from this restructuring effort, and weather any impending recession.