Mark Fields

He "retires" from Ford as president and Ceo.

Seems he had a push out the door.

Well, when you retire from the CEO position two years before you are technically eligible to retire.....

Got a great payout, I'm sure.

Still trying to figure out if it's good or bad.

In the back of his mind he wants this guy to do well so the stock rises as I imagine he has a bunch of it. That must feel odd as they forced him to retire.

Wall Street wasn't happy with the stock price, even though the company has great cash flow and a healthy balance sheet. When you sit in the big chair, you have a target on your back. I'm sure Fields will be fine, his mullet waving in the breeze as he rides his golden parachute into the sunset.

I wish I could be forced to retire early as CEO for a Fortune 10 company.

Tom_Spangler wrote: Wall Street wasn't happy with the stock price, even though the company has great cash flow and a healthy balance sheet. When you sit in the big chair, you have a target on your back. I'm sure Fields will be fine, his mullet waving in the breeze as he rides his golden parachute into the sunset.

IMHO, as soon as he uttered the words "shareholder value" he put a HUGE target on his back WRT Wall Street.

Marky Mark will find a position on some BOD, just like Jac did.

I have never understood why a great cash flow and healthy balance sheet did not equate to good stock performance.

alfadriver wrote:

Tom_Spangler wrote: Wall Street wasn't happy with the stock price, even though the company has great cash flow and a healthy balance sheet. When you sit in the big chair, you have a target on your back. I'm sure Fields will be fine, his mullet waving in the breeze as he rides his golden parachute into the sunset.

IMHO, as soon as he uttered the words "shareholder value" he put a HUGE target on his back WRT Wall Street. Marky Mark will find a position on some BOD, just like Jac did.

[shudder] Thanks for the Nasser PTSD flashbacks.

alfadriver wrote: Well, when you retire from the CEO position two years before you are technically eligible to retire..... Got a great payout, I'm sure. Still trying to figure out if it's good or bad.

I am sure he will be just fine:

As President and Chief Executive Officer at FORD MOTOR CO, Mark Fields made $19,257,495 in total compensation. Of this total $1,787,500 was received as a salary, $2,736,000 was received as a bonus, $0 was received in stock options, $14,298,356 was awarded as stock and $435,639 came from other types of compensation. This information is according to proxy statements filed for the 2016 fiscal year. http://www1.salary.com/Mark-Fields-Salary-Bonus-Stock-Options-for-FORD-MOTOR-CO.html

In reply to spitfire bill:

Leverage? Just spitballing but read about the HF owner sometime. It reads like the exact opposite in my opinion. Wonder what will happen if the HF 'bubble' ever bursts. By the way I've only read the article that I added below. Market watchers might have a different take. https://www.bloomberg.com/news/articles/2017-02-14/billionaire-owns-a-beverly-hills-xanadu-thanks-to-50-chainsaws

spitfirebill wrote: I have never understood why a great cash flow and healthy balance sheet did not equate to good stock performance.

Always a mystery to us, too.

But the reasons why profit targets were missed, well.... And perhaps they think that cutting people isn't the correct answer, too.

We went through "shareholder value" once before, and the moron who made it his goal to make F be as strong as Google tanked the stock really badly. This time, the leash was MUCH shorter.

nutherjrfan wrote: In reply to spitfire bill: Leverage? Just spitballing but read about the HF owner sometime. It reads like the exact opposite in my opinion. Wonder what will happen if the HF 'bubble' ever bursts. By the way I've only read the article that I added below. Market watchers might have a different take. https://www.bloomberg.com/news/articles/2017-02-14/billionaire-owns-a-beverly-hills-xanadu-thanks-to-50-chainsaws

Article says his Beverly Hills estate has "outhouses"!

Seems like revenue was down. Share price was down. Warranty work and recalls seemed to be up. GM has been posting better numbers than Ford in similar market conditions, so it's not the market in general. From an outsiders perspective, Ford looks a bit less prepared for the electric/autonomous/ride sharing future than their cross town counterparts. They have no Bolt competitor. There's no partnership with the Ubers or Waymos of the world. They're going to be pretty late to the Mid-Size truck market. The Mustang is great, but it's getting out performed by the Camaro across the board. Etc, etc.

Overall, Wall Street doesn't care much about current health, they care about growth potential. That's why the Teslas and Ubers of the world have market values higher than GM/Ford/Toyota, even though they hemorrhage cash right now and the car companies are turning profits. Most carmakers are about as big as they can be. There's not much room to grow from here, and Wall St has gotten greedy enough that they aren't willing to put up with small gains over time. Everybody is trying to speculate and 'get in on the ground floor' of the next Facebook/Amazon/Google/Apple.

In reply to STM317:

FYI, other than not having a mainstream EV, Ford does have partnerships with a ridesharing company, there has been huge work in autonomous vehicles- as well as big partnerships, and Mustang performance is relative (mostly to sales). IMHO, the jury is still out on the mid-sized truck market.

The key part is the warranty declarations. And cutting jobs does not fix that in any way.

In reply to alfadriver: I didn't mean to imply that Ford isn't active in those areas, just that they're not as active as others, or their activities go unnoticed. Sensible or not, some (maybe even most) of this is about image. I think the overall image to an average person is that they're reacting to market trends, rather than anticipating them and being in strong position to capitalize. Yes, Mustang and F-series are huge sellers, but what else do they have that is a class leader? It looks bad to investors to see GM signing huge deals with Lyft, while Ford has 8 cities with a much lesser known ride sharing company. It looks bad to investors to see GM release the Bolt to much fanfare, while Ford soldiers on with the outclassed Focus Electric that almost nobody knows about, and little word of anything to compete in that market in the near future. It doesn't please investors to see a dozen Colorados or Tacomas every day while Ford is late to market with a Ranger (even if the market may not make sense financially).

There are a couple of ways mature companies will keep Wall Street happy. First, is to gain large portions of market share, and that doesn't really happen without delivering class leading stuff in many areas. The other option is to enter new markets, which they seem to be attempting to do with the ride sharing but it's not going to catch on with a small company that nobody knows about in a handful of cities.

In reply to STM317:

Again, I don't understand the perception of the autonomous cars thing- We are doing a LOT of it, and I've barely heard anything more out of GM or FCA- who I take far more seriously than Google, Apple, or Tesla.

We also sell Hybrids like Toyota does- so we have multiple models being sold- just not one "signature" Prius. And all of our hybrids have plug in versions- which is a more useful version of an EV anyway.

Again, I don't really think the mid-sized truck market is where money can be really made. It's great that you think so- but it costs as much to make a mid-size truck as a full sized one- or very close to it. So until there is a really good reason, might as well make money on big trucks.

Our top selling vehicles are the F150, Fusion, and Escape, FWIW.

But the KEY problem- our profit margin isn't big enough. And right now, that can be traced to warranty issues as the top issue. Wall Street only really cares about numbers and potential- and when they see a potential of billions of lost profits fixing things that shouldn't need fixing- that's more important than a few million in profits from Mustangs. Or EV's. And the key was that Mark wasn't fixing that very well- we got into a very good position for TGW, but it's been getting worse every year for a while. None of which should have ever happened. And instead of making sure the product is solid, we go and invest billions into emerging market companies that we already have gotten a good position in all on our own.

When the core product is suffering, how confident can you be in the future investments?

And that, IMHO, is why Mark is gone.

My opinions are personal to me and in no way reflect on my status as an employee and are in NO way official of the company.

The fact that he's gone doesn't not surprise me in the least. What does surprise me is it happened so soon.

While I feel that the stock price is low, and that people like Tesla are riding a bubble that makes the .COM rise of the late 90's look like a slow but conservative build up, I don’t' think Wall Street is entirely wrong.

Ford is building some amazing enthusiast vehicles. They have a winner in every performance category you can think of, but there are gaps in what people think should be the focus areas. While the various Hybrids and plug in hybrids are excellent vehicles and the Focus is a great all electric offering no one is aware of them. The CMAX is better than a Prius in every conceivable way, but no one talks about it and no one knows about it. Also the Electric and Hybrid offerings while world class don't span as much of the line up as other automakers, especially given the size. Ford should have been pushing their Hybrid and Electric vehicles much much harder. Adverts and product placement is seriously lacking. Also the rate of roll out is too slow. Tesla, Google, Uber etc. have all proven two things. First the future is here and second it's much harder than people expected. There was a rumored working partnership with a massive company last year that didn’t' happen, I think that hurt too. There is a perception that Ford is behind in autonomous vehicles despite the fact that Ford are still the only people to have autonomous vehicles diving in the snow when street signs, road markings and terrain are hidden people aren't aware of it.

While as enthusiasts we love the performance vehicles and see that as a main indicator or a company’s health, Wall Street doesn't see it that way? Where is the Bolt, Twizy, 500E, Smart fighter? Why isn’t' Ford in the news every day for pushing forward autonomous etc.

I'm not saying that Ford are as far behind as the market thinks, I just think we've been going about promoting it properly.

Add to all this, with the prediction that oil will fall back to $25 a barrel and stay there will slow down the rush to some of these cars Wall Street needs to see more commitment.

In addition to all of that there is the facts already pointed out about revenue, quality and most important margin compared to the competition. Ford is making lots of money, but it spends more than its competitors do for each $ of revenue.

From the inside I believe the company and products and direction are in better health than those outside think they are, but that's part of the problem, communication.

Finally even though I'm a minion I happen to have met and spent time with Mullaly, Fields and Jim Hackett. Fields just comes over to me as aloof and condescending while the other two come across as a genuine people interested in you. Not essential, but it matters when you meet the press, Wall Street, the Board etc. I’m really enthusiastic about Hackett. He’s an incredible guy who really turned around Steelcase and put them back on the map. He’s very much a Design guy and will push product design forward. He also been working closely with IDEO and has been leading Ford Mobility Solutions for the last year. I think he’s absolutely the right man for the job and think this is the right move for the company.

In reply to alfadriver:

I'm really just playing devils advocate here, and trying to play the role of "Wall Street Guy" who probably doesn't follow the industry closely. I follow industry news pretty closely, so I'm aware of the work being done in the autonomous field, and I'd say Ford is very competitive in that area. The problem, is that nobody knows it. FCA has a partnership with Google's autonomous division Waymo. GM has Lyft. Uber is trying to get going, when not being sued by other corporations. These are in the news. Other than Ford stating a goal to have an autonomous vehicle on the road by 2021, they're not in the news regarding future tech. When they have been in the news lately, it's been bad news about recalls which as you can imagine is also not good from a PR perspective.

I agree on many points with Adrian. It's not that Ford isn't competitive or leading the industry. It's that there is a perception among the general public that they're not competitive or leading the industry. I think a marketing shift alone could change that somewhat.

In reply to STM317:

And that's fair- much of the perception is reality.

But I also don't realistically think that shareholders of any major automotive company thinks any of us are like the tech companies. Tesla gets where they are because of dreaming and "potential". Not because this is a very high cost, low profit, INCREDIBLY competitive industry. (And they seem to ignore the HUGE money and long lead time it will take to spool Tesla up to the smallest car company that sells here in the US)

Not even Toyota is like Google in terms of market cap, not even close to the relative investments and requirements to build another Toyota vs. the cost to make another google.

And I think it's a mistake to chase after those shareholders.

Think about it- while EV's and autonomous cars sound sexy as heck for potential- the actual phase in of those products is going to be incredibly slow. Massively incredibly slow, relative to the tech market. Right now, the turn over of the fleet is at BEST about 6%, and it's not likely going to get bigger (and I really think the actual fleet turn over is closer to 2-3%). So if on Jan 1, 2022, every single car sold in the US was an EV, it will take just about 20 years to replace all of them. 20 years. 20 years ago, my cell phone was a block. And realistically, EVs and autonomous cars are going to be a fraction of the new fleet. So the reality of the change will be closer to 50-60 years. Again, cell phones and computers change over the fleet WAY faster than that.

And autonomous cars isn't going to lead to the end of cars- the best it can do is shift ownership, as millions and millions of cars will be needed every day as we all commute to work at the same time.

And eventually the whole Ride Sharing industry is going to have to really face up to the taxi industry- either get rid of all of the Taxi requirements- which means taxis are on an equal sitting with Uber and Lyft, OR keep them all in place, and the end result is the same. This can't last much longer- as the core product that taxis and ride sharing provides is identical. The only difference is the detail of who owns the car.

So the "sexy" investments that you guys are taking about still are a long way out from actually being significant in terms of being big profit items. And IMHO, our industry core investors know that. So it's really back to the recalls and and high warranty items.

alfadriver wrote: But I also don't realistically think that shareholders of any major automotive company thinks any of us are like the tech companies.

I wish that were true. It may be true of those who buy and trade single companies rather than funds. But most stock is held by Mutual funds, Pensions and large corporations. To them the auto industry is an industry that makes things. They don't see why R&D is more of a % of turnover than making a washing machine or an electric drill. I've even seen auto companies compared to Coke as they sell metal tins of sugary water which is obviously a product just like ours. Still, Ford is still behind Toyota and VW in margin and that counts for a hell of a lot. Add in the 'perception' of lack of progress in ride sharing, electrification and autonomous vehicles (please note perception) and I understand why the stock is undervalued. The big Q is when to get back in to ride the eventual upturn.

In reply to Adrian_Thompson:

I get the whole margins thing. And fully agree with it.

But our industry is about selling over a trillion dollars of stuff. And employing a huge chunk of people who also go out and buy stuff. Our investors know that. And industry investors seem to know that there's a massive long lead time to change over- since we all share that turn over time. Nobody clearly does it better than anyone else for R&D to production.

So the core problem is loss of potential $$, which right now, is about warranty more than most other items. And the trend has been getting worse over Mark's time. Seems to me, the BOD had a short leash considering the last time we went though it- it took a LONG time and a lot of pain to get to where we are. No reason to repeat that.

Money from foolish investors is just as valuable as money from wise investors, and one kind is easier to obtain.

Regarding the length of time needed before the fleet is mostly autonomous, you're assuming the natural cycle of replacement that currently exists will remain. I'd argue that it's likely to accelerate with legislation or incentives like lower insurance rates, etc in favor of autonomy. It will still probably take decades, but I think we'll see the turnover faster than the current status quo. Autonomous vehicles will likely be the highest profit vehicles in a model range, so automakers will have more incentive to sell them, which becomes a bit of a self fulfilling prophecy. Finding non-autonomous vehicles in 10 or 15 years may be as difficult as finding bare bones cars now. And when low income people can't afford to drive their obsolete non-autonomous vehicles, and can't afford pricey new vehicles, where do they turn? Ride sharing, which is the high-profit wet dream. Bill Ford himself has said that while they make about 8% on cars, they're expecting around 20% for future ride sharing. That's an enticing figure for investors, and I'm not sure they see Ford as pursuing that aggressively enough.

TSLA is up 793% from where it was in 2013. They're seen as a tech company that makes cars much like Apple is a tech company that makes computers. In their small segment of the total automotive market, they have massive market share. Bubble or not, plenty of investors seem to be willing to throw money at the chance that Tesla can continue to grow. Not necessarily with market share, but the size of their market in general. And that money is cash that isn't flowing into Ford's coffers.

STM317 wrote: Money from foolish investors is just as valuable as money from wise investors, and one kind is easier to obtain.

Exhibit A - Tesla
Exhibit B - Uber
Yup, I have to agree.

STM317 wrote: Money from foolish investors is just as valuable as money from wise investors, and one kind is easier to obtain. Regarding the length of time needed before the fleet is mostly autonomous, you're assuming the natural cycle of replacement that currently exists will remain. I'd argue that it's likely to accelerate with legislation or incentives like lower insurance rates, etc in favor of autonomy. It will still probably take decades, but I think we'll see the turnover faster than the current status quo. Autonomous vehicles will likely be the highest profit vehicles in a model range, so automakers will have more incentive to sell them, which becomes a bit of a self fulfilling prophecy. Finding non-autonomous vehicles in 10 or 15 years may be as difficult as finding bare bones cars now. And when low income people can't afford to drive their obsolete non-autonomous vehicles, and can't afford pricey new vehicles, where do they turn? Ride sharing, which is the high-profit wet dream. Bill Ford himself has said that while they make about 8% on cars, they're expecting around 20% for future ride sharing. That's an enticing figure for investors, and I'm not sure they see Ford as pursuing that aggressively enough. TSLA is up 793% from where it was in 2013. They're seen as a tech company that makes cars much like Apple is a tech company that makes computers. In their small segment of the total automotive market, they have massive market share. Bubble or not, plenty of investors seem to be willing to throw money at the chance that Tesla can continue to grow. Not necessarily with market share, but the size of their market in general. And that money is cash that isn't flowing into Ford's coffers.

Here's the problem with your total statement- if autonomous cars are really highly profitable, that means they will be very expensive. You have to start with a basic car, and then add all of that stuff onto it. Very expensive cars don't sell fast.

Even with all of the incentives, it's still going to take upwards of 50 years to get across everyone. And I bet it will take at least 10 years before it gets to be a majority of new car purchases.

It's going to take decades before people can't afford to own old cars vs self driving ones. Many decades.

Again, Ride Sharing has the taxi elephant in the room problem. Let alone that most people STILL want their own personal mobility, and not have to rely on someone else. Or the tiny problem that 100million people have to get someplace all at the same time. If they don't already share the commute with someone else (carpooling, buses, or trains), what's is going to make them want to share in 10 years?

I just can't see ride sharing as that massive of a TOTAL market. Yes, it will get bigger. Not nearly the entire fleet or entire commuter big, though. Just a fraction of that. People didn't ride share horses. People as a total group are not going to ride share cars totally away.

BTW, Ford brings in about 50x more money in than Tesla does- our revenues were close to $200b. We don't make money on shares being sold, we make money selling cars. I have been here when shares were the equivalent of $30 a share (60 back in the old days), and was here when it was $1.40. All that really meant was that it was harder to get loans. We still had 200,000 employees, and still made millions of cars, and have over $150B in revenue. The only time Ford makes money on stock investors is when we sell it directly from F to them. Otherwise the trading helps is in no way.

The people who gain/lose the most on share value are people like Musk and Fields. The rest of the company really can't see the real gains and losses.

In reply to alfadriver:

Yep. And that's about as big as the current market can get. They need new markets, or they need more market share in existing markets, or they need to drastically reduce production costs/staffing. Like I said earlier, Wall Street isn't particularly interested in long term, slow growth anymore. Everybody wants explosive growth. If the Tesla/Uber bubble pops, then I think we'll see a return to more traditional investing, but for now it is what it is. As you correctly noted, most CEOs these days are tied directly to their company stock, so it behooves them to cater somewhat to Wall Streets expectations, or they lose their cushy job. The people on the Board of Directors are in similar positions typically, so when they see their net worth dropping due to a CEO, who do you think they're going to get rid of?