The good news: sales of profitable pickups, utility vehicles and commercial vans are buying Ford time as it restructures its business. Consumers can take heart in a rash of new product coming next year including the Ranger pickup, Mustang Shelby GT500 and next-generation Explorer and Escape.
The success of the Lincoln Navigator and Ford Expedition contributed to strong profits in North America, said Ford CEO Jim Hackett in reporting third-quarter earnings.
The bad news: investors and analysts wanting more detail and perhaps a speedier overhaul under Hackett ended yet another earnings call with little to go on beyond an explanation that his team knows what needs to be done, and how to do it, but such an undertaking will take another five years or more.
“What I remind everybody of is we first have to find the areas that need the attention,” Hackett said. “We’re through that. We then have to design the solutions for them. We’re through a lot of that but not all of it. And then we have to put them in place and perform.
The explanations come as Ford reported a 37-percent drop in third-quarter earnings to net income of $1 billion. The automaker had losses in Europe, South America and Asia Pacific, including China where sales, share, and revenue all fell. Hackett said he is particularly disappointed in China and the company now plans to make China a standalone business unit with a new CEO, Anning Chen.
The automaker has also said it no longer expects to meet its goal of achieving a global profit margin of 8 percent by 2020. Stock has languished below $9 and closed Wednesday at $8.18.
Part of the restructuring includes more partnerships, like the ones announced with Mahindra and Volkswagen. Projects with VW will include commercial vehicles but other areas being explored are VW making cars for Ford in Europe and Ford making a Ranger-based pickup for VW. What is not on the table is any kind of merger or equity swap.