Ford has been one of the big success stories this decade. After losing much of its value in the late 2010s, they moved on from their CEO and appointed Jim Farley, who was a long-time executive for the company. Ever since, the company has been making some very positive business decisions that have rebounded the financials and even the stock price, which is up by more than 50 percent since that moment and 111 percent at its peak in January. Since then, they’ve been hit with the same problems the stock market has been facing, but it’s been impressive, nonetheless.
Unfortunately, the car business was hit with two pieces of bad news on Monday, one of them being their own decision. Ford laid off about 3,000 workers, which is about 1 percent of their workforce, on Monday with most of them occurring in the Detroit area. This was a decision from the top, as Ford is looking to reduce costs to help further their new focus on the electric vehicle business, with Farley saying that the company has too many employees that lack the expertise for the EV shift. This might help the company in the long run, but layoffs recently haven’t been a good thing. The second issue came with a lawsuit centered around a crash in 2014 where a couple was killed in a rollover crash driving a 2002 Ford F-250 truck. The children filed a lawsuit and the verdict was released today. The judge called for $1.7 billion in punitive damages based on the plaintiff’s argument that 5.2 million trucks had weak roofs that played a factor in the crash, and this poses a major problem. The plaintiff also argued that many of Ford’s older Super Duty trucks have roofs similarly designed, which would create a regulatory risk that could result in recalls. The damages will likely decrease as Ford sends it through appeal courts, but it provided unnecessary risk that sent the stock tumbling.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.