Faltering for years, Ford Motor is showing signs of a revival


For years, Ford Motor has been working on a turnaround but showing little progress in the showroom or its profits.

But the 118-year-old automaker’s outlook has brightened recently, and many analysts give credit to Jim Farley, who took over as chief executive last October. Ford has introduced several well-received models, including a redesigned F-150 pickup truck, an electric Mustang sport-utility vehicle and a new Bronco. In the first three months of the year, the company reported $3.3 billion in profit, the most it has made in a quarter since 2011.

And years of sliding down, Ford’s share price has rallied, jumping more than 70% this year, to about $15.50, its highest level since 2015. General Motors stock is up about 50% over the same time.

Farley has a long association with Ford, but his path to the top job was hardly assured.

A grandson of a Ford employee, Farley, who turns 59 on Thursday, tinkered with cars and owned a 1966 Mustang as a teenager. At the start of his career, he had a chance to join Ford, but he took a job at Toyota Motor, where he helped create the luxury brand Lexus and became a marketing star. He joined Ford in 2007 to help its chief executive, Alan Mulally, revive the company.

Farley was a candidate for the top job when Mulally retired in 2014 but was passed over in favor of Mark Fields, and again when the Ford board, headed by the family scion William C. Ford Jr., picked Jim Hackett in 2017. Hackett retired last year.

“From a business standpoint, I feel like I’ve been preparing for this my whole life,” Farley said. But he added that many of the company’s recent successes were the result of decisions “made several years ago.”

Still, colleagues say Farley has brought a sense of urgency and energy to Ford compared to the more measured style of Hackett.

During Hackett’s tenure as chief executive, Ford’s share price languished, and Wall Street analysts complained that he did not sufficiently detail how he would turn the company around.

In May, Farley and a dozen other executives laid out the company’s strategic plan to investors and analysts in a nearly four-hour presentation, an event that had been promised but never held under Hackett.

“I think the CEO change mattered a lot to Wall Street,” said David Whiston, a Morningstar analyst. “Communication and the drawn-out approach were a big problem under the old leadership. There’s a lot more confidence with Ford now that the results will be there.”

Farley is clearly not shy. He is an active presence on Twitter, where he sometimes shares memes featuring actor Chris Farley, his cousin, who died in 1997.

Ford still faces plenty of challenges. It is suffering from the global shortage of computer chips more than other automakers. This quarter it expects to make only about half as many vehicles as it had hoped to, because of the shortage. While demand for Ford models is strong, dealers often don’t have the vehicles that buyers want.

The company also remains behind GM and Volkswagen in China, the world’s biggest new car market. Ford has also had to pare its operations in South America and Europe after losing ground to other automakers.

Like GM, Ford is aggressively moving into electric vehicles, and it’s off to a strong start with the Mustang Mach E, an SUV that has taken market share from Tesla. Next year, Ford will start selling the F-150 Lightning, an electric pickup truck. The company started taking orders for the truck three weeks ago and has already amassed 100,000. An electric version of its Explorer SUV is likely to follow, Farley said. By 2030, about 40% of the vehicles it makes should be electric.

Ford is trying to concentrate on making vehicles that stand out rather than the generic sedans and compacts that U.S. automakers made in the recent past and have largely discontinued.

The latest came this week — a small pickup truck called the Maverick. It is aimed at consumers who drive cars and minivans and don’t like the bulk, height or premium prices of large pickups like the F-150 or the Ram — but might be interested in a vehicle that has more cargo space for things like bikes and hockey gear.

“This is the product for people who never thought they wanted a truck,” Farley said.

Ford, known for its brawny engines, made the Maverick’s base model a hybrid that goes 40 mile on a gallon of gas. The truck starts at $19,995, or nearly $10,000 less than the cheapest F-150. Hyundai is introducing a similar truck called the Santa Cruz this summer but has not said how much it will cost.

Sam Abuelsamid, an analyst at Guidehouse, noted that compact pickup trucks had not been very successful and that most automakers had done away with them. But over the past 10 years, American tastes have gravitated toward trucks and SUVs, so Ford may be smart to try again. “You have a lot of people who’ve concluded a pickup fits their lifestyle now, so this is going to be interesting to watch,” he said.

Farley expressed confidence that the Maverick would be a hit, saying he could envision Ford producing a family of Maverick variants, including an electric model.

“The electrification of the industry is a big change, and I think it wasn’t clear until we launched Lightning and Mach E that Ford was going to be a winner in this new electric reality,” Farley said. “Now investors are betting on Ford, and what they’re telling me is, ‘The strategy is attractive, Go execute it, Farley.’ ”





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