Ford Authority

A Brief Summary Of Ford’s ‘Investor Day’ Discussions

Wednesday, Ford Motor Company played host to more than a hundred investors and Wall Street analysts as it went over its future growth plans, essentially trying to argue why those in attendance ought to trust in Ford’s vision as it grows the new “mobility” component of its business.

The Detroit Free Press called the session “remarkable in terms of its scope and the level of detail,” reporting that the presentation encompassed some 130 pages of slides and four hours of discussion. Some of what was presented at the investors meeting we’ve already covered; some we have not. We thought it prudent to break it all down for you here, with links (where applicable) to relevant previous stories.

Core Business

  • To bolster profit margins on Ford’s small cars, all North American small-car production is shifting to Mexico over the next two to three years. Additionally, manufacturing complexity will be reduced through limiting the number of available configurations – a move which Ford says could save as much as $300 per car. That adds up.
  • According to the Detroit Free Press, the production shift to Mexico will not affect jobs in North America. In its newest contract with the UAW, Ford committed to $9 billion in investments for US production, and to retaining or creating 8,500 jobs. Of the total sum, $4.8 billion will be invested throughout 11 Michigan facilities, reports the Free Press.
  • Ford is still putting effort toward reinvigorating the Lincoln luxury brand, and looking at how to lead in emerging or weakened markets like Russia, the Middle East, and South America. Details were light.

Emerging Business Opportunities

  • Ford continues to state that it is sinking $4.5 billion into developing 13 new, electrified vehicles by 2020, despite lukewarm sales. The automaker touted its status as a segment leader, being the No. 1 seller of plugin-hybrids in the US, and No. 2 seller of electrified vehicles overall. The automaker says that its electrification efforts will be focused on its core competencies: trucks, utilities, commercial vehicles, and performance machines.
  • The automaker’s announcement that it intends to put a volume-production self-driving car on the road in 2021 puts it behind some competitors, but that’s all right by Ford. “I am worried about perhaps an introduction of the technology before it is ready by someone,” said CTO Raj Nair, according to the Free Press. “A premature introduction, an introduction as a development test, in my view, might be premature… and damaging to the industry.”
  • Ford doesn’t have its sights set on any major acquisitions or mergers. The company recently acquired San Francisco shuttle service Chariot, and continues to forge partnerships with smaller companies like Velodyne LiDAR and Nirenberg Neuroscience, but a chart showing planned capital expenditures over the next three years reportedly didn’t contain any big outside investments.
  • As Ford invests in providing new transportation services, profits are projected to decline in 2017 below this year’s $10.2 billion target, but 2018 has a more favorable outlook. Breaking into transportation – a $5.4 billion-per-year industry versus the automotive industry’s $2.3 billion in annual revenue – should prove lucrative in the long run, and Ford anticipates seeing operating margins of 20 percent or greater. That’s significantly greater than the automaker’s North American margin of about 10 percent, reports the Detroit Free Press.

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

Subscribe to Ford Authority

For around-the-clock Ford news coverage

We'll send you one email per day with the latest Ford updates. It's totally free.

No Comments yet

Leave a comment