Ford CEO Jim Farley has the company's stock prices turned around thanks to better strategic planning.
Two years ago, car manufacturer Ford gained a new CEO, and since then, they haven’t looked back, going from strength to strength.
When Ford CEO Jim Farley came on board with Ford two years ago, they were considered behind the times. They were behind in designing and manufacturing electric and autonomous vehicles, connectivity, and software. Due to the ambiguity of their future plans, which Wall Street is not a fan of, their share prices began to tumble.
Fast-forward two years and Ford CEO Jim Farley has delivered on his massive transformation plans for Ford, but significant work still needs to be done. During his Ford + transformation plans, he has restructured operations. He has also brought their Wall Street stock prices up about 70%, despite the recent declines due to global inflation, the Ukrainian war, and other cheery topics.
Farley told CNBC in August 2020 that his plans as Ford CEO would include a new approach. He stated, “What matters to the team and us is delivering strong business results. As far as communicating to Wall Street … one of the most important commitments we’re making as a team is a clear and specific plan for the company and the company’s transformation.”
Under previous Ford CEOs – Jim Hackett and Mark Fields – the company was left with lackluster stock prices and failed to make any waves on Wall Street. The company experienced problems with vehicle launches, warranty costs, and supply chains. This lack of progress left their stock prices to plummet 40%. All Farley vowed to fix upon becoming the new Ford CEO.
Even though things are on the up for the automotive company, Farley routinely states that they are still in the early stage of his new Ford + transformation plan. As the Ford CEO, its most significant shift will be into electric vehicles, like all automotive companies at the moment.
Analysts describe Farley as a “blunt communicator” who is not afraid to commit to bold decisions such as separating Ford’s traditional and electric vehicle business internally, increasing investments in electric vehicles to $50 billion through to 2025, and cost-cutting and headcount reductions.
The company surprised Wall Street further by pre-releasing part of its third-quarter earnings report. This report warned investors of $1 billion on unexpected supplier costs. Since that release, share prices have dropped by 23%; something Ford would have foreseen given the circumstances.
“I think the biggest thing he has done is get the market to believe in Ford again. That belief has been put on hold until they show they can meet the full year 2022 guidance in the light of the Q3 preannouncement not being well received at all,” David Whiston from MorningStar said to CNBC about the Ford CEO. “He is also a “car guy,” which I like because he has a passion for the product. Ford is in great hands with Farley in charge.”
All these companies selling goods and services have had a tough year, but it seems like Ford is in a good place with Jim Farley. Hopefully, it is only up from here.