It was a busy morning for
The company announced plans to spend more money on jobs and factories as it expands into electric vehicles, while the latest delivery data was pretty dire. Strangely, Ford stock is up.
Here’s what we know: Ford (ticker: F) plans to hire 6,200 new union workers in the Midwest, converting about 3,000 temporary workers to full-time workers in the process.
Ford will also spend $3.7 billion in Michigan, Ohio and Missouri to support new jobs and support Ford’s plan to produce two million electric vehicles a year by 2026.
A portion of the $3.7 billion, however, will support the traditional business. About $1.4 billion is spent building new Mustangs and Rangers. There is also another billion dollars to be spent on improving the work environment over the next five years.
For electric vehicles, Ford plans to spend $5 billion in 2022, a double increase from 2021 spending. Overall, Ford has committed to spending $50 billion on EVs between 2022 and 2026 Spending plans were raised in March. Ford’s old plan called for about $30 billion to be spent between 2020 and 2025.
The $2.3 billion spent on EVs in Thursday’s announcement is part of the $50 billion plan.
Ford’s total capital expenditures, for reference, in 2021 were approximately $6.2 billion. Engineering, research and development costs totaled approximately $7.6 billion.
“Ford is America’s largest employer of hourly automotive workers, and this investment only furthers our commitment to building great new vehicles,” Ford Chairman Bill Ford said in the company’s press release. society.
Ford employs 56,000 hourly employees in the United States and approximately 183,000 employees worldwide. The current contract with United Auto Workers, the union representing Ford’s hourly workers, expires in 2023.
The announcement comes ahead of any contract expirations because “we need to put shovels in the ground…this year” to meet electric vehicle targets, said Kumar Galhotra, president of Ford’s gasoline-powered automotive business. “It’s all driven by our product plans and our ambition to accelerate electrification.”
Thursday’s announcement comes after plans announced in 2021, by Ford and its EV battery partner
(0967770.Korea), to create approximately 11,000 new jobs in Tennessee and Kentucky. Ford is planning new battery assembly and manufacturing facilities.
Along with the investment plans, Ford has affirmed its commitment to all-new commercial electric vehicles expected to hit the roads by mid-decade, a commitment it initially signaled when it reorganized into three new units. commercial vehicles: traditional vehicles, electric vehicles and utility vehicles. .
Ford is hosting a conference call and press conference at 10:30 a.m. Eastern Time. It is also available to watch on YouTube.
While EV spending is about the future, the present still isn’t great as semiconductor shortages continue to limit production and sales. In the United States, Ford sold about 154,000 vehicles in May, compared to about 177,000 in April and about 198,000 vehicles in May 2021.
Ford F-series truck sales were 49,454 in May, up from 51,517 in April, but up 6.9% from a year ago. Sales are still down about 24% since the start of the year.
Electric vehicles had a better May, however. Ford delivered 5,179 Mustang Mach E all-electric vehicles, up from 3,805 in April and 1,945 delivered in May 2021. Ford also delivered more than 1,000 other battery-electric vehicles in May, including the F-150 Lightning.
If electric vehicles are the future, then the combination of stronger, albeit still weak, sales and continued spending to grow the business further could be the reason Ford shares rose 1.2% to 10 27 a.m. Thursday, while the
Dow Jones Industrial Average
decreased by 0.6% and 0.8%, respectively.
Or maybe it’s just that Ford had such a tough year that none of it came as a surprise. Ford stock has fallen about 35% this year through Wednesday’s close, worse than the comparable 14% drop in the S&P 500. Inflation and rising interest rates have hit auto stocks hard . Investors fear high inflation will squeeze profit margins while rising rates will dampen demand for new cars.
Write to Al Root at [email protected]