Ford Analyst


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  • Ford Analyst

    1. 1. Thursday, February 5 th , 2009 Matthew Clemson, Gavin McDowell, Stephanie Ramsay, David Spencer, Lindsey White FORD – ANALYST REPORT Group 10
    2. 2. Financial Performance (5-10 Year Outlook)
    3. 3. Revenue growth has severely lagged cost growth leading to slimmer margins, decreased cash flow, and ultimately, a steep decline in stock price. Ford’s Struggling Financial Performance
    4. 4. Ford’s Struggling Financial Performance
    5. 5. Stock Recommendations
    6. 6. With Ford levered to the hilt and cash flow projected to be very low, we forecast a negative equity value of $44 billion. Investors have a big hole to crawl out of before even reaching the current $1.80 per share. We Do Not Recommend Ford Stock
    7. 7. Marketing Landscape
    8. 8. Competitive Landscape Low Price/High Quality Low Price/Low Quality High Price/Low Quality High Price/High Quality
    9. 9. Re-Branding Amidst a Financial Crisis? Refreshed Brand Image and New Positioning
    10. 10. Competitive Landscape Low Price/ High Quality Low Price/Low Quality High Price/High Quality High Price/ Low Quality
    11. 11. “ Green Vehicles” Changes Ford’s Competitive Landscape <ul><li>Tahoe and Suburban </li></ul><ul><li>Escalade </li></ul><ul><li>Chevrolet Trucks </li></ul><ul><li>Toyota Trucks/SUVs </li></ul><ul><li>Toyota Prius </li></ul><ul><li>Chevy Volt </li></ul><ul><li>Honda Insight </li></ul><ul><li>Kia Sonata </li></ul><ul><li>Honda Insight </li></ul><ul><li>Smart Car </li></ul><ul><li>Cooper Mini </li></ul>
    12. 12. Brand Positioning Crossroad?
    13. 13. Competitive Advantage
    14. 14. Competitive Advantage Used Vehicles Affordability of New Cars
    15. 15. Sustainable Competitive Advantage VALUE RARE INIMITABLE ORGANIZED Brand Equity Customer Loyalty Investment in Hybrid R&D Manufacturing Flexibility Green Awareness
    16. 16. Complementary Business Units
    17. 17. Complimentary Business Units Vehicle Warranty Certified Pre-Owned Vehicle Repair Service Ford Motor Credit <ul><li>Established Program </li></ul><ul><li>Quality Reputation </li></ul><ul><li>Little Revenue </li></ul><ul><li>Consistent </li></ul><ul><li>Customers </li></ul><ul><li>50% Claim Reduction </li></ul>
    18. 18. Key Acquisitions and Alliances
    19. 19. Acquisitions & Alliances <ul><li>After acquiring a partial or whole interest in several different car companies throughout the 80’s and 90’s, Ford is in the midst of divesting all these interests in an attempt to raise capital. </li></ul><ul><li>Raised 9.34 Billion through “sell-offs”. </li></ul>
    20. 20. Acquisitions & Alliances (cont) <ul><li>Ford has been shopping Volvo in China. Why? </li></ul><ul><li>Sales increased throughout the early 2000’s. Sales have dropped recently but the perception has not. Include this brand in your Hybrid rollout. </li></ul><ul><li>Volvo holds a 71% stake in Brand Perception for safety. Ford can use this to carry over into other Ford products. </li></ul>
    21. 21. Acquisitions & Alliances (cont) <ul><li>Ford should continue to look to partner with foreign automakers in emerging markets. </li></ul><ul><li>Lowers original capital commitment and overall exposure. </li></ul><ul><li>Example: Alliance with Russian automaker GAZ. </li></ul>
    22. 22. Product Plans
    23. 23. Announced or Apparent Product Plans <ul><li>Ford has invested heavily in hybrid, flex fuel, and plug in-vehicles. </li></ul><ul><li>Ford is in the best position out of all US automakers to take advantage of new energy efficient cars. </li></ul><ul><li>Ford plans to have a full family of hybrid vehicles by 2011-2012. </li></ul>
    24. 24. Announced or Apparent Product Plans <ul><li>2007 partnership with Southern California Edison (SCE). </li></ul><ul><li>At this time, not a good use of funds. </li></ul><ul><li>Estimated 5000 – 10,000 plug-in vehicles sold in 2011. </li></ul><ul><li>Needed infrastructure is still well off into the future. </li></ul>
    25. 25. Announced or Apparent Product Plans <ul><li>Flex fuel cars have not been performing. </li></ul><ul><li>Consumer backlash, cars not starting, and other issues. </li></ul><ul><li>Ford should focus more on Hybrid technology. </li></ul>
    26. 26. Announced or Apparent Product Plans <ul><li>Ford has been listening to its consumers. </li></ul><ul><li>Redesigning such models as the Shelby GT500 and the almighty workhorse……the Taurus. </li></ul>
    27. 27. Productivity Measurements
    28. 28. Improving Productivity: Not a Competitive Advantage <ul><li>Industry becoming leaner, slackers coming closer </li></ul><ul><ul><li>Gap in 2003 was 10.51 hrs </li></ul></ul><ul><ul><li>Gap in 2008 was 3.50 hrs </li></ul></ul><ul><li>Top 6 industry producers converge on productivity </li></ul><ul><ul><li>Range narrows to 3.50 hrs from top to bottom producer </li></ul></ul><ul><li>Toyota and Chrysler lead in vehicle labor hours </li></ul><ul><ul><li>30.37 hrs per vehicle </li></ul></ul><ul><li>Ford improves productivity by 3.7% </li></ul><ul><ul><li>33.88 hrs per vehicle </li></ul></ul>
    29. 29. New Domestics Lead Plant Utilization Metrics
    30. 30. Production Strategy
    31. 31. Fords Global Footprint <ul><li>110 manufacturing plants in 23 countries </li></ul>
    32. 32. Ford Changes Production Mix <ul><li>Temporary closures to reduce supply </li></ul><ul><li>Ford is in the process of retooling production facilities to meet current market trends </li></ul><ul><li>Conversion from SUV to small car plants </li></ul><ul><ul><li>Dearborn, Michigan </li></ul></ul><ul><ul><li>Mexico City, Mexico </li></ul></ul><ul><ul><li>Louisville, Kentucky </li></ul></ul>
    33. 33. Strategic Recommendations
    34. 34. Company vs Analyst Comparison
    35. 35. Questions