Ford’s Old and New Manufacturing Troubles Deepen Fast

I believe Ford reported $2.2 billion in losses in 2022 writing down the value of two big investments, struggling with high costs, and also supply chain problems. In 2023, there is still going to be volatility on chips, On the older chips used in the auto industry, there is still capacity constraint.”

I also can’t image funding two different teams, one for EVs and the other for gasoline vehicles is helping either.

Ford’s Troubles Deepen Fast, 24/7 Wall St., Douglas A. McIntyre

A deeply troubling problem to Ford’s list of overwhelming challenges. Its electric vehicle (EV) flagship, the F-150 Lightning, has stopped rolling off the production line. There appears to be a problem with the battery, which is the heart of the vehicle. Ford has further undermined its natural advantage due to the F-150’s decades of sales dominance in the United States. It puts further heat on CEO Jim Farley, who may be added to the long list of chief executives dismissed by the Ford family.

Ford spokesperson Emma Bergg offered a vague explanation, a hallmark of the company’s PR operation. “The team is diligently working on the root cause analysis,” she said, and added it was the “right thing for customers.” That implies the delivery of a faulty Lightning was even a possibility.

Farley has gone to great lengths to explain the car company’s problems. Quality has been an issue for years and will take years to fix, he says. Moreover, Ford has far too many engineers compared to rivals. Put another way; management is overstaffed in a key part of its operations. Farley has described these without adequate explanation about how they should be solved. The fact that one of the world’s leading manufacturers cannot improve on its challenges more quickly is hard to believe.

The need for a successful launch of the Lightning cannot be overstated. Executive Chair Bill Ford, who runs that company, recently commented last April:

Every time any auto manufacturer does a major launch, they always say it’s the most significant in the company’s history. To put this in perspective … it is probably the most important launch of my career. … This has been a personal journey of mine since I joined the company 43 years ago. And it sort of all culminates on Tuesday with the launch of this vehicle. So I think in many ways, it’s for me, anyway, the most important launch of my career.

Bill Ford has to be more than disappointed.

Ford has bungled the pricing of the F-150 Lightning as well. In December, Ford raised the price of the EV for the third time. The reason was that management could not tell what it would cost to make the pickup. Ford also had third-quarter cost overruns that totaled $1 billion across the company.

The Lightning should have been a huge and relatively easy success. It is the first major full-sized pickup to be offered as an EV. The gas-powered F-150 has been the top-selling vehicle in the United States for over four decades. The number on the road today has to exceed 6 million. Such a huge installed base is the perfect target for a new version of any vehicle. That advantage has slipped away.

Car and Driver; Three price increases of the 2023 Lightning since August 2022 can’t be helping. 2022 found Ford raising of prices for the F-150 Lightning in August, again in October, and one more time for the 2023 entry level model to $58,514. The original 2022 F-150 Lightning was a bargain at the starting price of $41,669.