Ford CEO Warns Employees
Embattled Ford Motor Co. (NYSE: F) CEO Jim Farley had a town hall meeting. According to The Wall Street Journal, he is reworking performance metrics. As Ford has increasing financial troubles, it should be considered a warning: Our reputation for quality is under siege. Get better at what you do, or these new metrics may cost you your job.
Ford finds itself in a terrible position. Farley said it had “left $2 billion on the table” as the company announced earnings. Earlier in the year, Ford missed expense estimates by $1 billion. Farley also said Ford needed 25% more engineers to do the work competitors do. If that is not a warning about layoffs, what is? (Click here for the American tech companies that laid off the most people last year.)
Ford has raised and then lowered electric vehicle (EV) prices. First, component prices were too high, which meant increasing prices to maintain margins. Later, it cut the price of the Mustang Mach-E, likely because the EV market had been hit by a price war started by Tesla. Presumably, that means margins on the Ford car will be compressed.
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Farley needs to get his tenure restarted. The Ford family is known for dumping CEOs when results turn poor. This means employees will need to take the brunt of whatever he does as he tries to turn Ford from a poorly run company to one with mediocre results.
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Ford wants to catch Tesla in sales. That will be nearly impossible, at least in the next few years. Tesla may sell as many as 2 million cars this year. Ford will be lucky for its EV sales to hit the hundreds of thousands.
Soon, Ford will have fewer employees than it does today.
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