It’s Been A Whirlwind Week For Ford: From F-150 Shortages To Huge Bronco Reservations To Ford’s Impressive Second Quarter Economic Outlook
There’s a lot to write about this week. But I wanted to cover all the news that hit my inbox. I tweeted each little nugget out on my Twitter accounts (@driversside and @f150writer). With July ending it wrapped up a big month for Ford. The biggest news from July was the reveal of the new Bronco, which has been an unquestioned success.
When a vehicle launch has very little criticism, even amongst the most cynical, you know you hit a home run. And Ford appears to have a hit home run with the 2021 Bronco. So let’s take a closer look at some of the Ford news nuggets, starting with more info about the aforementioned Bronco.
2021 Ford Bronco Reservations
While Ford is not announcing official numbers for how many people plunked down $100 to reserve their new Bronco, one number that was floated around Dearborn was 150,000.
That is a big number of first orders and shows just how much excitement and enthusiasm there has been for the Bronco. This includes the 2-door and 4-door and does even include the Bronco Sport. Remember, as I reported, Ford had to double the initial number of first-edition Broncos from 3,500 to 7,000 when the orders poured in so fast that it crashed their server.
That’s a good problem to have.
Ford’s Chief Financial Officer Tim Stone said at their quarterly earnings meeting that the 150,000 exceeded their “optimistic expectations” and that “As a result, we’re working really hard right now to increase our annual production.”
Speaking of that quarterly earnings meeting, some positive news came out of that.
Ford Records Better-Than-Expected Q2 Results
Wall Street is a fickle place. Tesla, which barely makes a fraction of the vehicles that Ford does is a Wall Street darling. Meanwhile Ford, which is one of the oldest automobile companies in the world, continues to struggle as an investor’s darling. I’ve been asked a lot about this, and I can’t put my finger on it.
I’m also not a financial expert. But if you ask me which company will be around (in some capacity) in 25 years, I’d say Ford will still be around, while Tesla, I’m just not sure about. And before the Teslarati bombard me, I just think Elon Musk doesn’t understand how hard it is to make vehicles in a profitable way. And Ford has been doing that for more than a 100 years. Whether I'm right or not, Ford is lining themselves up to battle Tesla on several fronts, and that can only be good for the industry.
I read a peace in the Detroit Free Press this week that was pretty doom and gloom and said it could include billions in debt for Ford and that expect Ford to announce some grim results. But Ford President and CEO Jim Hackett shocked even the Wall Street experts with a much more optimistic Second Quarter announcement.
Considering much of the Second Quarter included the manufacturing shutdown due to COVID-19, exceeding expectations came as a pleasant surprise.
“I could not be prouder of the Ford team’s optimism and effectiveness as we manage through this pandemic,” said President and CEO Jim Hackett. “We delivered a strong Q2 while keeping each other safe, caring for customers and neighbors, and assuring tomorrow.”
The highlights of the Second Quarter announcement that resonated with Wall Street were:
• Maintains strong balance sheet, with more than $39 billion in cash at end of Q2; this week repaid $7.7 billion against revolving credit lines
• Finalizes strategic alliance with Volkswagen for commercial vehicles, EVs, pickups
• Posts net income of $1.1 billion, including $3.5 billion gain on investment in Argo AI
2020 Ford F-150 Shortage Leaves Dealers Scrambling
Production for the 2020 Ford F-150 wraps up in August, when the plants will shut down and retool for the 2021 F-150.
When Ford announced the 14th-generation F-150 in June the production schedule seemed ambitious, considering Ford had been shut down for months due to the COVID-19 pandemic.
I wrote in May that there was already a 2020 F-150 shortage and that it would likely get worse before it got better. A couple different dealers I spoke with confirmed it did get better, but that the lag in production has still greatly affected their F-150 inventory.
The National Auto Dealers Association (NADA) Chief Economist Patrick Manzi forecasted such an inventory. He said, “For the rest of the summer, inventory constraints—especially in popular segments—will be a headwind for the retail sales recovery.”
One dealer I spoke with said that the 2020 F-150 demand is far outweighing the supply at the moment. As such many dealerships are doing dealer trades to get the inventory their customers want. I asked that same dealer if many seemed to be waiting for the 2021, and the dealer said, “Not from what I’m seeing. The demand is high.”
Production for the 2020 Ford F-150 ends around August 13, when the setup and planning at the Dearborn Truck Plant will begin. August 27 the same thing happens for the Kansas City Plant, so theoretically the last of the 2020 F-150 rolls off assembly around that date.
Job One production for the 2021 Ford F-150 begins October 12 for the 2021 F-150 (Dearborn) and November 9 (Kansas City).
It seems all consumers, and even Ford, have their sights set on the coming year. Who can blame them for wanting to put 2020 behind them. It’s certainly been one of the historical years in history and been a true test to the automotive industry.
Jimmy Dinsmore has been an automotive journalist for more than a decade and been a writer since the high school. His Driver’s Side column features new car reviews and runs in several newspapers throughout the country. He is also co-author of the book “Mustang by Design” and “Ford Trucks: A Unique Look at the Technical History of America’s Most Popular Truck”. Also, Jimmy works in the social media marketing world for a Canadian automotive training aid manufacturing company. Follow Jimmy on Facebook, Twitter, at his special Ford F-150 coverage on Twitter and LinkedIn. You can read the most of Jimmy's stories by searching Torque News Ford for daily Ford vehicle report.