Three months ago, yours truly here wrote that new Ford Motor Company (NYSE:F) CEO Jim Hackett wasn’t the right man for the job, and that owners of F stock would likely end up regretting the choice they were cheering. Although Hackett is a respectable, honorable man, he just wasn’t what Ford needed.
I haven’t changed my mind.
While Hackett hit the ground running and his “brand” has become very visible within the company’s halls as well as publicly, a closer scrutinizing look at the changes he’s put in place leaves shareholders wondering exactly what actual changes he has put in place.
So far we’ve heard lots of vagaries, but we’ve not heard much about what Ford is specifically going to do to, you know … make more money.
An Uninspired Start
Odds are good anyone reading this is at least aware Hackett is working on a 100-day plan — a plan that sets the tone and direction for his tenure within the first 100 days of taking over.
The plan itself has been and remains out of public reach, but the four key goals have been no secret. They are:
- Re-evaluate revenue opportunities
- Evaluate the “fitness of the company”
- Re-evaluate capital deployment
- Renew focus on innovation
They all sound like savvy moves. Read through them again, though. Aren’t they all things all companies should be doing all the time? I’m reminded of something I’ve heard too often in my business career: “A goal without a plan is just a wish.” How do you define company fitness? What will you do if you spot new revenue opportunities? Where will capital be redeployed, if available?
Perhaps answers to those questions exist, but are still kept under wraps until Hackett can hammer out the details. But he hasn’t been shy about painting pictures of where the company is going, or where it’s not going yet.
Case in point: In July, Hackett explained, “I want to leave the message that Europe is a place we’re going to be,” which contrasts with a recent decision from General Motors Company (NYSE:GM) to leave the enviable but difficult market. Again though, there’s a stark difference between sending a message you want to be in Europe and actually remaining in Europe and becoming meaningfully viable.
Maybe that’s what Hackett meant to say. But it’s another suspiciously non-committal idea that’s not exactly inspiring to F stock owners.
That confusing message pales in comparison to the outright step backward Ford took when Hackett recently declared the company wouldn’t have an autonomous driving technology on the road as soon as previous CEO Mark Fields had planned.
Perhaps it’s the right choice. Self-driving cars are not easy, and potentially dangerous if not perfected. It’s how Hackett justified the decision that waves the red flag. He explained:
“If you think about a vehicle that can drive anywhere, anytime, in any circumstance, cold, rain — that’s longer than 2021. And every manufacturer will tell you that.”
No, not every manufacturer will tell you that. Tesla Inc (NASDAQ:TSLA), for instance, already has a technology capable of making a vehicle truly autonomous on the road. A driver still has to be in the car — for now — but it’s a hands-off technology. Waymo, from Alphabet Inc (NASDAQ:GOOGL), has autonomous cars on the road right this very minute. They’re in the experimental phase, but they’re there.
Perfecting them over the course of the next four years is plausible. Heck, Ford offered self-parking cars years ago. Suggesting autonomous driving can’t be a reality four years from now sounds like a premature defense … from a guy who was in charge of Ford’s mobility initiative for a couple of years before taking over as CEO.
Bottom Line for F Stock
Again, maybe Hackett has all the specifics and details worked out. Perhaps a wide swath of the company’s upcoming 2018 models are going to be viewed as must-haves. Maybe Ford is going to start turning sizable profits by providing van-based transportation — via its Chariot shuttle service — in addition to selling more cars in the future.
For someone who hasn’t been afraid to give interviews, though, Hackett has offered very little in the way of meaningful details as to the future of Ford. Maybe there’s a reason.
One thing is for sure, though. That is, with F stock down more than 40% since its mid-2014 peak and moving deeper into multiyear low territory, traders clearly are uninspired by the new CEO’s messaging and lack of clarity.
As of this writing, James Brumley held a position in Ford. You can follow him on Twitter.