TICK, TICK, TICK. TIME IS RUNNING OUT ON FORD.

By Peter M DeLorenzo

Detroit. Another week has gone by on top of the absurd week that came before it. And the one that came before that. And so on. That people are losing track of time and space while lost in the throes of this relentless pandemic has been well-documented. And contributing to that lost feeling is the relentless drip of bad news, news that is becoming more and more unbearable because of a depressing cocktail of abject terror, an egregious dereliction of duty on the part of what currently passes for our national government, and the rampant absurdities of our new life at every turn. In fact, there isn’t a facet of America that hasn’t been affected by this lethal scourge - COVID-19.

For those with even a modicum of societal awareness, this is not a drill and it is not some movie script. With 70,000 Americans dead and that number accelerating at a dizzying rate, any semblance of what came before in American life has been trampled, permanently. And the fact that there are millions out there who haven’t gotten the memo just adds to the absurdity. 

As for the automobile business? Plans to reopen the plants and get back to work are coming together. And development programs that were chugging along in fits and starts will pick up speed again in earnest. But does anyone really know what will happen once the giant spigot opens up again? 

I am seeing a lot of conjecture and an occasional boast here and there about things “getting back to normal” in no time, but once the short-term pent-up demand for cars and trucks is exhausted – I figure about August - then what? With national unemployment figures whistling past 30 million people and rising rapidly, how important do you think an automobile purchase is in the giant scheme of things? Especially when rent and food are in play?

As for the auto business, the pendulum seems to be swinging wildly between ugly Doomsday scenarios and Pollyannaish pronouncements. On the one hand, you have analysts projecting the idea of auto companies running out of time – and money – and being bought and absorbed. On the other, you have auto executives like Jim Farley at Ford, who just spent $1 million on Ford stock last week in a calculated show of confidence to send a message to anyone who’s paying attention – especially to Wall Street-types – that Ford’s COO has supreme confidence that the company will come out on the other side of this crisis leaner, meaner, stronger and better.   

But I have serious doubts about that. Yes, Ford has the punch of “The Franchise” – the F-150 truck – which is an incredible cash machine second to none in this business, but as successful as the F-150 is, the cash burn going on in Dearborn is unfolding at a devastating cadence. How bad is it? One estimate has Ford losing upwards of $161 million per day. And there is no amount of “fireside chats” with analysts – something that top Ford execs have tried of late in order to persuade them that the Dearborn automaker will be okay – that can mask that fact. Needless to say, it’s ugly times right now in Dearborn, and it’s getting uglier by the day. 

Besides, Farley’s “grand gesture” really wasn’t all that impressive in the giant scheme of things. How is that, you say? As Farley has memorably said to anyone close enough to listen (me included), “I have plenty of money,” and that is a true, albeit a truly obnoxious statement. As a matter of fact, a million here and there to Ford’s soon-to-be CEO (he’s slated to replace Jim Hackett) is chump change. It might have pleased Bill Ford and certain members of the Ford family who still give a shit about what’s going on at The Company, but to those who know, the likelihood of that “grand gesture” ringing hollow in the fall is very real. 

No matter how illustrious the F-150 franchise is, or how many cool products the company has coming – the new Bronco to name one – when you’re burning through that kind of cash, time is the enemy. And right now, the sands of time are whistling through the hourglass at a furious rate for Ford. 

Two-and-one-half years ago, I had this to say about the future of Ford – projecting to the year 2030 – in a column entitled Runnin’ Down A Dream: “The VW Group long ago established itself as the largest automotive conglomerate in the world. The news? Its working agreement with the Ford Motor Company had evolved into a full takeover, as Ford’s restructuring was stalled by its perpetually late product cadence, ineffectual leadership and having pissed away billions trying to become a mobility company. And for the first time in its history Ford was no longer controlled by the Ford family, although the family still maintained a significant - but notably reduced - presence in terms of stock and influence.”

And today, I wouldn’t change anything about my prediction. Well, maybe one thing: I don’t think we’ll have to wait until 2030 to see the Ford Motor Company inexorably changed for good. The denouement will come – one way or the other – over the next eighteen months. 

In The Last Worthless Evening, Don Henley sings about “Time, time, ticking… ticking away” in a wistful lament, and his melancholy refrain somehow seems sadly appropriate right about now with everything going on in the world. 

And time is ticking away for the Ford Motor Company, whether anyone over in Dearborn wants to admit it, or not.

And that’s the High-Octane Truth for this week.