Jim Farley, CEO of Ford Motor, was optimistic during a presentation of the company’s new racing cars in Charlotte, North Carolina. A new approach to racing and winning on the track is the key to selling “exciting cars.” Which leads him to expect a big year for the company, according to Pras Subramanian of Yahoo Finance.
Farley was in a good mood. On the one hand, he enjoyed showing off the new Mustang GT3 race car and new high-performance electric vehicles like the Lightning “Switchgear” pickup truck. Is there anything else you want to talk about? He expects 2024 to be a big year for Ford, one of the biggest since he took over three years ago.
How does Ford intend to win on the racetrack and on the sales floor?
In a first for Ford Performance, the company’s motorsports division is promoting all racing efforts in the so-called launch season of 2024. Ford’s presence in motorsports has grown rapidly in recent years, from the racing of the Mustang in NASCAR and now in Europe with endurance in the GT3 series to off-road initiatives with the Ford Bronco and the future Raptor truck in the Dakar Rally.
Farley said the company competes for two reasons: to get attention and focus on “exciting products” like the Mustang and Bronco, but also because it believes motorsports is good business and not only for sale. Ford believes that racing can also be a profitable business.
“We think racing is going to be a business—a sustainable business—that I’ve seen in my 40-year career,” Farley said in an interview with Yahoo Finance.
Since becoming CEO, Farley, a former Toyota executive, has tried to change the way Ford approaches the market. It is no longer everything to everyone, as Toyota, for example, has a wide portfolio of car offerings.
Farley said that Ford is done with making “vanilla” or regular cars; it wants to sell cars that are exciting. “We want racing to inform our production vehicles more, not in the past because it affects our suspension geometry (for example). Just as we want to sell street racing cars, a lot of them.”
Not surprisingly, Farley is a racing driver. For example, he competed in the Rolex classics races in Monterey with cars like his 1966 Ford GT and his 1978 Lola T298, driven at Laguna Seca, among other purpose-built races.
And it’s that focused attitude that Farley wants to carry into 2024. Last year wasn’t the best for Ford. A tough six-week contract negotiation with the United Auto Workers (UAW) and declining demand for electric vehicles have caused the company to reconsider its long-term strategy. But the company still expects to earn between $10 billion and $10.5 billion in adjusted EBIT (earnings before interest and taxes) in 2023, basically in line with 2022, despite facing UAW strikes.
Another setback in its shift to EVs was revealed this week: Ford has laid off 1,400 workers from F-150 Lightning production at the Rouge EV production facility as demand for EV pickups continues to decline.
Despite this, Farley is optimistic that 2024 will be important for Ford as it doubles down on popular cars and adjusts its rollout of electric vehicles. While this will cut a factory shift for the Lightning, it will boost production of the Bronco SUV and Ranger midsize pickup truck.
“I’ve been leading the company for three years, and 2024 is the first year where I can say we have a chance to have a year of growth for a number of reasons,” Farley added. “We have overcome our problems with work and negotiations in the US, but the most important thing is that we launched about six new products, and we have a new line of Broncos and Mavericks.”
Farley believes that Ford’s new product strategy of not being everything for everyone and focusing on exciting products will pay off in 2024. The electric vehicle strategy is also evolving with a long-term focus on lowering prices, as the company expects that sales of electric vehicles will stabilize at around 10,000 a year. The transition to hybrids will help ease the cost of the transition to electric vehicles, especially the F-150, as Ford tries to give their customers what they want.
“We’re No. 2 in hybrids (US sales),” Farley added. “That’s why at Ford we have all these options: an electric F-150, a hybrid or an ICE (internal combustion engine). “We don’t really care; we let the customer choose.”
Wall Street may be skeptical that Ford and Farley will back down on their electric car ambitions after being enthusiastic just a year ago, but if Ford can improve sales and maintain profitability, all will likely be forgiven.
Coming off a decent sales year in 2023, Farley believes Ford is ready to continue winning in showrooms with new products in 2024, as well as on the track with new race cars. As Farley talked about the prospects for both efforts, the conversation, of course, turned to this year’s big races, and he revealed which race he wanted to win.
“Bringing a Mustang back to Le Mans (a 24-hour endurance race) and beating Porsche and Ferrari at home, on their European turf, not in a GT prototype or a car, but in an American car that a person can buy… for 30 grand? How cool would it be to beat Ferrari and Porsche, a moment that all Ford employees and President Bill Ford would be proud to see?” said Farley.
“We put everything—we put everything at Ford Motor Company into that race,” Farley said.
Ford Motor closed Friday higher at $11.17. The 70-period moving average is above the last two candles, the RSI is at 41 points, and the MACD fast line (blue) has crossed below the zero level.
Medium-term resistance is at $12.49. Meanwhile, the Ei indicators are mixed.