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The Dearborn, Mich.-based automaker announced Thursday that 86% of its North American production by 2020 would be trucks and SUVs, up from 70% now.
But the company has struggled to prove that it will dominate the future of self-driving vehicles and electric cars. Meanwhile, a series of quality miscues have proved financially damaging.
"Ford has not presented a narrative that has convinced anybody that it's going to be growing its earnings and profits in the future," said John McElroy, host of "Autoline" and a longtime industry observer. "Now, Ford has sent a signal to Wall Street that they're essentially going to become a truck company."
In some ways, it already is one. The company's F-Series franchise is more valuable on its own than the company as a whole, Morgan Stanley analyst Adam Jonas said Wednesday in a note to investors.
If the F-Series were a company on its own, it would be worth $16 a share, rather than the $11 to $12 range where Ford shares have generally hovered for a year and a half. The lineup is anchored by the F-150 pickup.
By comparison, Ford in 2017 got as much revenue from its beloved F-Series brand — about $41 billion — as social media behemoth Facebook had altogether.
Despite this valuable franchise and a strong consumer shift to trucks, it's as if Ford lately is the Rodney Dangerfield of domestic automakers — struggling to get respect.
It's a sharp contrast with the years after the Great Recession, when the company got credit for avoiding bankruptcy and for its discipline under former CEO Alan Mulally.
Why can't the company persuade investors that things are on track?
"We're not really seeing a lot of new and different," said Stephanie Brinley, senior analyst for IHS Markit.
What's more, the company has faced multiple quality problems that are proving costly. The automaker recalled 1.4 million Ford Fusion and Lincoln MKZ sedans last week to fix "potentially loose steering wheel bolts that could result in a steering wheel detaching from the steering column."
And the company has recently been bedeviled by door-latch recalls — doors that could fly open while driving — now affecting several million vehicles and costing more than $600 million.
Ford's event Thursday began the process of what it needs to accomplish, which is convincing its constituencies, including car dealers, media and analysts, that the company has a plan in place, said Michelle Krebs, executive analyst at Autotrader.
"What Ford did — pull back the curtain on future products — was out of character for the automaker but it was necessary," she said. "Now, Ford must successfully execute its plan."
Analysts were surprised to hear the extent to which Ford plans to shift production to trucks and SUVs over the next 24 months, including commercial heavy duty trucks.
While Ford is touting its commitment to hybrids, analysts dismissed the promises as a need to accommodate mandates in China and California just to be competitive.
Ford even predicted it would overtake Toyota as the top hybrid vehicle producer.
"The plan, emphasizing SUVs and trucks, plays to Ford’s strength," Krebs said. "The bigger bet is the hybrids. They have not been selling well. Whether Ford can be successful with hybrids remains to be seen."
Skepticism is rampant.
"It's a bold move to pull back on passenger cars almost completely, but the good news is that the consumer shift to SUVs shows no signs of slowing down," said Jeremy Acevedo, industry analysis manager at Edmunds. "However, this trend is far from a secret, and by the time 2020 rolls around, Ford's new vehicles will have a lot of stiff competition. Even though SUV sales are robust, the market is starting to contract, and when dealer lots are inundated with SUVs of every size, shape and brand, it's going to take a lot to stand out."
A number of analysts continue to say slow product development is a leadership issue.
"The big puzzle is, here they’ve got Jim Hackett as the CEO. He has been there since, what, May 2017? You don't see much difference at the company. Compare him with Alan Mulally," McElroy said. "You saw huge changes in a similar time frame."
Many observers are wondering about the future of once-popular models, including the Taurus, Fiesta and Flex. Ford isn't providing details yet.
"There are so many unknowns right now that it is still difficult to get overly excited about new product," said Dave Sullivan, manager of product analysis at AutoPacific, Inc.
In the long-term, the company, like others, is betting on self-driving cars as critical to its future. Ford recently launched self-driving car tests in Miami in partnership with Domino's Pizza.
In the near term, the F-Series will continue to be the bread and butter of Ford.
"The F-150 will fund the future," Krebs said, noting gains in assisted driving and connectivity technology.
Meanwhile, the Ford team remains hopeful that Wall Street will come around.
"We won’t comment on the company’s valuation, but we can say that Ford has a solid balance sheet, with over $35 billion of liquidity, which provides financial flexibility," said Ford spokesman Brad Carroll.
"We continue our intense focus on improving the operational fitness of the business to deliver stronger results while building toward our vision of the future. We’re confident that as these fitness actions take hold, the market will recognize our progress."
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