Future Ford CEO Jim Farley (left) and Ford Executive Chairman Bill Ford Jr pose with a 2021 F-150 during an event on September 17, 2020 at the company’s Michigan plant which produces the pick-up.
Michael Wayland | CNBC
DETROIT – After a decade of mediocrity, Ford Motor shares have risen nearly 50% so far this year and are on track to post their best annual performance since 2009.
CEO Jim Farley’s new turnaround plan, called Ford +, aims to better position the automaker to build electric and autonomous vehicles as well as generate recurring revenue. So far, Ford’s electric vehicle introductions such as the Mustang Mach-E and the upcoming Ford F-150 Lightning have been well received by investors.
Ford Chairman Bill Ford said the company plans to continue its momentum through 2022 and beyond, despite a global shortage of semiconductor chips hampering production.
“When we brought out the Mustang Mach-E and then the F-150 Lightning, I think it really surprised a lot of people. Not just by the fact that we offered these vehicles, but clearly by their quality, ”he told CNBC. “I think you are starting to see this in the investor base. Really, this is just the tip of the iceberg.
Ford, whose great-grandfather Henry Ford founded the automaker, recently sat down with CNBC to discuss the company’s stock buyback, turnaround plan, as well as specialist acquisition companies and individual investors. Here are some highlights from this interview.
Ford has said reinstating the company’s coveted dividend, which was slashed in March 2020, is “pretty big” on its to-do list, but it wouldn’t say when. Ford, chairman since 1999, and other company executives have said now must be the right time as the industry continues to grapple with the coronavirus pandemic and a global shortage of semiconductor chips.
“We are looking to do it as soon as possible,” he said. “We have a huge share of the ownership of employees and retirees, and they also care deeply about dividends. “
more upside down
Ford said he was unsure whether all of the company’s emerging initiatives under the Ford + plan were reflected in its current share price, but he said investors were starting to heed it.
“Obviously, I think investors understand that there is change underfoot, and Ford is going to be a major player in that change,” he said. Adding to the latter, Ford’s underlying business is “very strong” and the rate of change is higher than at any time during its more than 40 years with the automaker.
The company plans to focus on a more recurring revenue model under the program, with a focus on connected vehicle services and fleet customers, among others. This is something every automaker strives to do, as the industry invests billions in new technologies, such as electric and autonomous vehicles.
The Ford family essentially controls the company through Class B preferred shares which give them 40% of the shareholders’ voting rights. It’s a system that has been in place since the company went public in 1956, but all investors think it should continue.
This system has faced several challenges from shareholders. At this year’s shareholders’ meeting, 36.3% of voters supported a system giving each share the same vote, slightly above the average of 35.3% since 2013.
Ford maintains its support for the dual action structure, saying it has been a “very positive thing” for the company. He said this allows Ford to focus more on the long term and not be another “nameless and faceless company”. He cited family control to help it avoid bankruptcy during the Great Recession, unlike GM and the old Chrysler, now known as Stellantis.
“We are not a faceless, anonymous company, and people know that there is a family, and in my case a person who, going through thick and thin there, will not take a golden parachute and will not be on bail. , and deeply society cares, ”he said. noted.
Ford board member
Ford, 64, has no plans to step down from the company’s board for the foreseeable future, although a younger generation of family members are joining the board. His daughter, Alexandra Ford English, and her nephew, Henry Ford III, were both elected to the company’s board of directors in May.
Ford, who joined the board in 1988, said the time had come for the two to become directors and learn the ropes. He said being on the board as a young executive alongside his father as well as cousin Edsel Ford II, who stepped down from the board earlier this year, brought a lot to the table. valuable.
“I wanted to give them the same kind of advice as they move forward and start to carry the Ford family torch,” he said.
Ford, co-founder and partner of mobility venture capital firm Fontinalis Partners, said he was unsure whether PSPCs were a flash in the pan or here to stay. “I guess time will tell, but frankly this is another means of liquidity that we didn’t have awhile ago,” he said.
Ford said many companies, including Fontinalis, are exploring PSPC deals, while others continue to seek more traditional IPOs.
Fontinalis was founded in 2009. It focuses on emerging mobility companies. Investments include Lyft, Postmate and the lidar company Ouster. Ford said he co-founded the company because he believed such mobility companies would play a key role in the future of transportation.
Whether Ford’s investors are institutional or retail, Ford has said he wants them to own the stock for the long term.
“What we really like, at least I would speak personally, are the long-term investors who want to be with us on the journey we are on,” he said. “And if it’s retail or institutional investors, great.”