Ford’s Deepening Problems

Ford will need to extend the shutdown of F-150 Lightning production for another week. It indicates that Ford’s overall process to create and build cars is worse than what management indicated. According to CNBC, Ford said battery supplier SK had been slower than expected in addressing the issue. Ford needs SK “to ensure they are back to building high-quality cells and to deliver them to the Lightning production line,” according to CNBC.

The entire catastrophe puts Executive Chairman Bill Ford in a difficult position. He has called the Lightning launch the most important in his career at Ford, which stretches back for decades. This launch will go down in Ford’s history as one of its least successful.

Ford has had every opportunity to take a big lead in the US EV truck market. It sells over 600,000 gas-powered F-150s a year. It is the best-selling vehicle in America and has been for four decades. Finding another installed base this large for a new product release is impossible. (These are America’s favorite pickup trucks.)

Ford’s bumbling CEO Jim Farley has admitted Ford has two major problems he has been unable to fix. One is the ability of the company to build vehicles with quality levels at least as strong as its competition. The other is that Ford employs far too many engineers. One of the world’s largest and oldest manufacturers should be able to solve both problems in relatively short order. It can’t.

Other evidence of Ford management’s inability to effectively run its core business is that it said it had cost overruns of $1 billion in the third quarter of last year. Ford could not track component costs well enough to make its numbers.

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Ford has also been unable to price its EVs. It has raised prices on both the Lighting and Mustang Mach-E. Recently, it dropped Mach-E prices, perhaps due to Tesla’s price cuts. Industry experts believe the Tesla move is to hold its high market share.

Ford has taken a product that should have been early to market and put sales of that product at risk. (These are the most efficient cars on the market.)

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