Three months ago, I told Chaikin PowerFeed readers that things weren’t going well for an iconic U.S. automaker…
Well, folks, things are still looking rough for Ford Motor (F).
You see, at the beginning of the year, the titan of American trucks issued a massive recall. And weak sales numbers for its electric F-150 Lightning truck had recently come out.
In 2023, Ford managed to sell roughly 24,165 F-150 Lightning trucks. That translated to just about 3% of the company’s total F-series truck sales.
It’s not looking any better this year, either. Dealers have been reporting considerable slowing in the market.
Not surprisingly, Ford told dealers earlier this year that it planned on cutting F-150 Lightning production. At the time, investors believed that the line would be roughly cut in half.
Now, the official numbers are out.
And things are looking bad enough that Ford could be paying out $35 million to a specific set of employees just to stop their work on F-150 Lightning production.
Today, let’s dig into that – and what it means for investors…
Breaking down that $35 million number is pretty simple. Ford has announced that it will be cutting staff for its F-150 Lightning production by two-thirds.
Some 700 workers will transition to the company’s assembly plant in Wayne, Michigan. They’ll work on the Ranger truck and the gas-powered Bronco.
Another 700 will take a long-distance reassignment or a $50,000 “retirement package.” That 700 multiplied by $50,000 translates to roughly $35 million… depending on how many employees choose to upend their lives and move.
By the end of it all, Ford will drop down to one crew for F-150 Lightning production… for a truck that was unveiled to the world less than three years ago.
As investors, the takeaway is clear.
The sprint to “go electric” isn’t working out as automakers planned.
Mercedes and General Motors (GM) have also identified weakness in the segment.
And that’s not to mention the absurd failures of the smaller electric-vehicle (“EV”) manufacturers. Failures at Rivian Automotive (RIVN), Lucid (LCID), and Fisker (FSRN) have revealed the very real challenges in the space.
Despite that, the automobiles industry group currently holds a “strong” rating in the Power Gauge. But here’s the important part…
The companies at the top of that list aren’t the ones fumbling in the EV space.
Both Honda Motor (HMC) and Toyota Motor (TM) currently hold “very bullish” ratings. And both companies have taken a more balanced approach to the EV “transition.”
In fact, Toyota’s chairman has made his position unambiguously clear. Earlier this year, as part of a presentation to the media in Tokyo, he said that “customers, not regulations or politics” should decide the pace of EV adoption.
So if you’re looking into the automotive space, it’s currently split into two groups – companies that are fumbling their EV strategy… and companies with a more balanced approach.
Right now, Ford is fumbling. And the Power Gauge sees that. Considering its “neutral” rating, our system is still signaling to avoid Ford’s stock.
Good investing,
Vic Lederman
