CNBC — Ford is the oldest U.S. automaker, but new technology and changing consumer preferences could put the century-old company in jeopardy.
These days, Ford Motor can’t seem to please investors. Shares of the automaker are down around 25 percent this year, even though Ford remains a profitable company with an iconic brand and a solid footing in some of the fastest-growing automotive segments.
U.S. rivals General Motors and Fiat-Chrysler have managed to emerge from bankruptcy to impress the industry and investors alike. But Ford, the company that to American ears is practically synonymous with the history of the automobile, is widely seen as being very much in the middle of a turnaround.
The company’s third-quarter earnings surpassed expectations, even though they were down from the same quarter in 2017. As of Monday’s premarket, shares have climbed 16 percent since the release of the latest earnings report on Oct. 24, but they are still trading below $10 a share, while GM’s shares hover around $38 a share.
The automaker has shown strong performance in North America but continues to struggle internationally. It’s South American business has not made money for years, and Ford said in late October that its businesses in China and Europe had “deteriorated.” This contrasts with GM, which sold off its European business and is doing rather well in China.
To be sure, Ford is taking action to reverse its fortunes.
The company has separated its China business from its Asia-Pacific segment and hired an executive to run just that region. Ford’s primary problem in China has been an inability to keep up with the rapidly changing consumer tastes of the Chinese market, said IHS analyst Stephanie Brinley. Ford recently released a new SUV just for the country called the Territory and is planning to put out several more vehicles to refresh its lineup there.
It has also said it will undergo an $11 billion restructuring that will cut jobs from its salaried workforce of 70,000 employees.