Why Ford May Be Going Bankrupt

Ford insider reached out to me on social media and revealed a shocking secret about why and how Ford is going bankrupt, and based on my review and analysis of their financials, it may be happening faster than you would think.

This is strictly my opinion, so do your own research and make up your own mind.

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[alanprine]

I worked for Ford for many years. We had to build the electric ranger because the government forced us to. But we didn’t really try to sell it and convinced the government that wasn’t financially feasible to build. The government backed off and we ended the leases and shut down the program.

[stephenbarnes]

The Irony is that Tesla is doing what Ford did with the Model T. Pure innovators dilemma

[abubakrsubedar]

this reminds me of what happened to Kodak. It's not that they weren't aware of digital photography, but they were too heavily invested in maintaining the advantages they had in film that they didn't see digital photography as the existential threat that it was to their business and didn't put as much product focus and emphasis on it early enough to prevent their own demise.

[peterk]

So Tesla biting into Ford's market share is actually saving Ford money

[agv]

Hey Tom, I enjoy your videos and I agree on multiple points you raised here; lack of innovation and modernization at Ford; however they do have the Mach E coming and the F150 fully electric, not sure how does that aligns with "0 investment in electrification". In addition the financials you were highlighted are all based on 2020 which we all know is plagued by COVID that disrupted supply chains and increased prices on certain goods. If you look at 2019 first quarter and first half, they were turning profits and not loosing money. I think a more rounded approach from you would have been if you compared previous 5 years to show the decline trend.

[martinloyd]

Hey now, Ford at least has electric power steering on some models.

[davidbeppler]

How can you lose money on selling a car and still make money? Financing. The financing division of GM is larger than the auto production of the company.

[LaurieR]

Disclaimer should be: Everything you hear is probably more accurate than CNBS or BloomBS etc as I’ve actually done some research 👍🏻

[ExAerospace]

After a career spanning a sizeable chuck of corporate america, I would suggest changing Shocking to Unsurprising.

[roddlez]

A very good friend of mine who worked for Ford in Detroit in the 90's/2000's has told me many times that--and I can't say this still holds true--the "Electric Vehicles" department is where Ford managers would send their "bad"/lowest-performing employees. All the higher-ups at Ford were in on the joke, indicating that they believed electric cars are a joke.

I wonder how much of this culture still holds true..

[akirashima]

If you work for any ICE manufacturers, there’s NO personal incentives to work harder to electrify their company!! EV are just theories and ideas and then you have to get back to work. Executives all have golden parachutes.

[DrBatanga]

Couple points from an EE and EV enthusiast: (1) Ford has developed the Mach-E and spent some money doing so. The Mach-E looks real, but it's not being sold yet and will lack a Supercharger network and therefore not sell well in the US, Europe will do much better though. (2) Ford did not go into bankruptcy in 2008 as did GM and Chrysler, because IMHO the Ford family owns about 2% with 40% voting rights and they will do everything in order not to get wiped out. 2% of $25B is still $500M.

[ProgressiveVegan]

Tesla has 713, 000 Cybertruck reservations. According to TorqueNews, Ford sold about 900K F150s in 2019. Even if only a small percentage of F150 owners buy Cybertrucks, it will hurt Ford.

[bilgyno]

I just had a first look at the Ford Mustang Mach-e today. For a company that has allegedly zero investments in EV drivetrains, that car is actually really nice and well built. It has a higher battery capacity than the LR Model Y, and is actually more affordable. Maybe they're trying to buy market share, but that car will sell like hotcakes over here in Europe.

[prof.m.ottozeeejcdecs]

As a normal human being I say: Ford has created a recipe for bankruptcy... not the first company, I might add.
As a retired Prof. of Economics and Management I say: WTF are those managers at Ford doing, and engineers not doing? 🤓 good show, keep it up, Dude!

[johnwilson]

Hi Tom. Great video. But here is some more important info that helps explain things. The only reason Ford had $31 Billion "cash" at end June was because they Borrowed an additional $18 Billion from the Banks at end March. (At 9.5%) At same time in March they stopped paying dividends. They also then defaulted on the 2009 Govt Loan or $5.9 Billion (due to be repaid in 2022). They had also received a $9 Billion line-of-credit from the Govt in 2009 and had promised to invest $14 Billion in new EV technology. They only dabbled in it .(As other comments stated) Then cancelled most of the EV development they were doing citing it wasn't cost effective. So they failed to meet the requirements of their LOC and Loan. With their total debt now between $140-170 Billion, they are incapable of working their way out.

[tetchuma]

Ford was asked in 1947 by the occupying British, if they wanted Volkswagen’s Wolfsburg plant, (for free) and they said no, because “they don’t make small cars. They’ll never be our competition.”

Henry Ford II was warned in 1966 that they need to innovate more reliable cars because the Japanese imports were cutting into their market share. Henry Ford II famously said, “Small cars, small sales.”

Not one year later, he was singing a different tune, and rushed the Pinto into development. He still refused to stop producing large land yachts.

The 1973 gas crunch hit, and Japanese import sales exceeded American car sales.

1999, Ford helped GM kill the California Zero emission mandate. (The EV1) Toyota responded to this mandate by creating the Prius.

Because of what GM did to the EV1, Elon Musk helped create Tesla in 2003.

Serves them right for fighting against the market.

[AfifSab]

Ford has inhouse development of the battery packs, motors, EV chassis, and Autonomy. Future production cars include MachE, F150, Transit Van, Transit Pickup, and more. All on the road by 2022. All these have nothing to do with VW, Rivian or any other EV startup that has never sold a car.
You can do your own research to verify. I work at Ford powertrain.
Having said that, I acknowledge that the financials sucked recently.

[Kralasaurusx]

"Ford has done ZERO investments in actual electrification of drive trains." Okay but what about Ford's electric F-150? I don't hear any mention of that in this video, so it makes me doubt the credibility of the anonymous source.

[gerrycrisostomo]

In my personal opinion, Ford is very reluctant to go into electrification of their vehicles because of a lot of reasons. First of all, they don't have their own battery manufacturing plant so the availability of batteries in large quantity is not guaranteed. That is the same problem that plagues Korean automobile manufacturers, like Hyundai and Kia for example. When Hyundai showed Kona and Kia showed E-Nero electric SUVs, lots of people love them because although they are not as sporty in terms of performance as Tesla cars, they are just good enough for daily drives to work and back and some weekend drive to countrysides. And they're more affordable than Model 3 so a lot of people expressed their interest to the cars once they become available. But what is the problem? They don't have enough battery supply so they cannot manufacture the vehicles in large quantity. Tesla took the upper hand by securing their own battery manufacturing plants early on while others like Ford didn't have that initiative. Secondly, Ford tried to go into electric vehicle program with their Mustang Mach E that looks like Tesla clone, but surprisingly not a lot of people are interested to buy one because of rapid development and improvement of Tesla cars. Ford simply cannot catch up in every aspect, from technology and manufacturing techniques to performance. In my opinion, they are probably thinking that if they will invest so much for the electric car production but their products will not be as good as Tesla cars, then their sales will not be high enough to be profitable and to recover what they invested and they will just be wasting their money. Third, there's not enough charging stations that can service their cars. That is also the big difference. One of the factors that people consider when buying EVs is that they should be able to charge their cars everywhere they go. All other charging stations combined cannot match the number of chargers that Tesla has all over the world, not just the U.S. Those are obvious reasons and there are maybe more.