Ford Motor Companyis the oldest U.S. automaker. More than one century old,
it is the only one to have survived the Great Depression, two World Wars and the 2008 financial
crisis without having to sell to a foreign buyer or file for bankruptcy. After one hundred fifteen years,
Ford is now at a critical juncture in its storied history.
Global auto sales peaked in 2016.
The entire industry is struggling with higher interest rates more expensive material costs and a global trade war.
Then there's Uber, Waymo, Tesla and other new startups and companies that are
upping the pressure on the industry to keep up with the latest technology.
Autonomous driving, electric vehicles, hybrids, all of which will take billions of
dollars in investment and years to develop before any real payoff comes.
The automaker's stock sank below 10 dollars a share in July 2018 for
the first time since emerging from the financial crisis in late 2009.
Under former CEO Alan Mulally. Since his departure in 2014 Ford, has struggled with his successors.
Mark Fields who was an executive with Ford for nearly three decades held the top job for just three years before
the board replaced him with current CEO Jim Hackett, a company outsider in April 2017.
And Hackett is already under pressure sales in China have plummete.
Falling 45 percent in October 2018 over the same quarter in the previous year.
Ford's European business has deteriorated and it has long struggled in Latin America.
Hackett's promised $11 billion turnaround plan hadn't fully materialized by late 2018.
Although, investors have become impatient, analysts say
Hackett still has the backing of Henry Ford's great grandson.
Ford was founded at the turn of the 20th century by Henry Ford, a mechanically inclined young man from a
farm outside Detroit, Michigan. Uninterested in farming, He worked as an engineer at the Edison Illuminating Company,
where Thomas Edison encouraged the young entrepreneur to experiment with automobile designs.
Ford ultimately teamed up with a Detroit coal dealer and founded the Ford Motor Company in 1903.
I think it's important to know that Ford was not afraid of failure in fact he embraced and welcomed failure.
He would talk about how his first two car companies failed.
He would have rather setbacks along the way but he saw each failure as a to lessen a chance to learn something
and do better with the next attempt. So I think that was important.
At that time, cars were assembled slowly by teams of skilled craftsmen. Ford saw the potential to streamline the process.
He adapted assembly line techniques learned from other industries, such as brewing and canning.
This dramatically sped up production and reduced costs.
Henry's Model T car was the first automobile produced on a mass scale would turn him into a legend.
Its initial price in 1908 of $825, under $23,000 in today's currency, gave it widespread appeal.
By 1916, Model T production rose to more than 585,000 units and the price fell to $360. During their lifetime,
Model Ts represented half of all the cars on the road worldwide.
In 1917, the company made its first foray into producing the vehicles, it is perhaps best known for today,
the pickup truck.
The truck was based on the Model T and was a sturdy frame with a cab in the front.
Ford sold roughly 4 million pickups before stopping production during World War II.
In the postwar period, the company would release a number of now classic cars, including the legendary Thunderbird.
Ford rolled out the Mustang, a two door pony muscle car in 1964.
Steve McQueen would turn it into an icon in the 1968 film, Bullet.
By the early 1980s though, Ford had suffered a number of bad years
and executives at the company began looking for challenging and inspiring new designs.
The company rocked the automotive world in 1985 when it released the Taurus, a front wheel drive sedan with
rounded edges, that was strikingly different from what sedans looked like at the time.
The car is often credited with saving the company and its so-called Jelly Bean shape influenced auto designs for more than a decade.
But Ford would later face other challenges.
Reports started surfacing in the late 1990s of accidents involving the tires on Ford Explorer sport utility vehicles.
The scandal resulted in more than 270 deaths and 800 injuries in the United States alone prompted congressional investigations.
Millions of dollars in settlements and legal costs forced several executives to resign and severely damaged Ford's reputation.
Just as Ford was putting the scandal behind it,
Cracks started showing in the auto lending market in late 2005 and early 2006, foreshadowing the crisis to come.
Ford which made $1.6 billion in 2005 lost an astounding $12.6 billion the next year.
At the height of the financial crisis in 2008, it booked a record loss of $14.7 billion.
The big three Detroit automakers: Ford, General Motors, and Chrysler would go to Washington hat in hand for a combined $34 billion in loans that December.
But Ford was spared the fates of its rivals. Then CEO Mulally, who had been hired from Boeing in 2006,
was credited with having the foresight to see the credit markets tightening.
He amassed a $20 billion war chest through borrowing before the crisis was in full swing.
The gamble paid off.
Ford was the only Detroit automaker that didn't take federal assistance or file for bankruptcy and has booked annual profits ever since.
But since Malawi's departure in 2014, the company has seen its fortunes sink.
Some industry watchers say Mulally, like other auto executives, missteps
by realigning Ford's portfolio around passenger sedans and compact cars,
missing the dramatic consumer shift toward SUV and pickups.
Hackett has inherited a challenge.
With U.S. auto sales down from their 2016 peak of 17.5 million vehicles sold,
the industry has been increasingly relying on high priced trucks and SUV fees to bolster profits.
The company has to slim down its operation, remain profitable, invest in new products for
the short term, and still show it is looking further ahead into the future.
And it has to do this while fending off competition from not only traditional automakers but a whole new ecosystem of companies,
from industries such as technology. Some of which have very deep pockets.
They are in this transitional challenging place right now and and taking a lot of criticism.
But let us not forget it is not a company that's on the verge of bankruptcy.
They are still very profitable.
They have a lot of cash. So, it's not a company that's going away tomorrow as Ramos said it wouldn't.
Ford wouldn't make it through the next recession. That couldn't be further from the truth.
Of course Ford certainly has its strengths.
It has a strong brand, loyal customers and good products among other things.
But the auto industry could look very different in just a few years.
Investors aren't yet convinced Hackett can navigate through these choppy waters.
Whether Ford will see another century as an American icon remains to be seen.