OT - WSJ article on Hackett, not flattering

Submitted by karpodiem on August 15th, 2018 at 8:51 AM

Link - https://www.wsj.com/articles/fords-new-ceo-has-a-cerebral-styleand-to-many-its-baffling-1534255714

"Senior executives at Ford Motor Co. F 0.42% have come to expect emails from their new boss, Chief Executive Jim Hackett, that include links to TED Talks and articles from Science Daily. They often come around 11 p.m., when he catches up on his reading.

The former chief of an office-furniture maker, Mr. Hackett frequently references the work of theoretical physicist Geoffrey West and uses terms such as “think phase” (a concept from his design background) and “clock speed” (a phrase from computing). In conversations, he often reaches for the nearest piece of paper or whiteboard to articulate his thinking by sketching out a diagram."

As someone who has ten years of experience in the automotive industry, you understands the importance of manufacturing (this is why Toyota makes so much money) competitiveness, and the importance of high margin product.

Although Hackett hasn't been at Ford for very long, these quotes don't inspire confidence. I don't see the focus on product or manufacturing like Marchionne had during his tenure at FCA.

And the 28 year old Chief of Staff is weird.

Comments

mgobleu

August 15th, 2018 at 9:00 AM ^

I'm not going to "subscribe" just to read a single article but I don't see from what you've quoted anything unflattering. Quirky, eccentric; certainly. Weird; maybe. The guy clearly knows how to get shit done though.

Sopwith

August 15th, 2018 at 11:06 AM ^

Watterson is a fascinating character. He's media-averse, believes in artistic purity over commercialization, and he's never licensed Calvin & Hobbes to sell anything (I believe there was one tiny exception a long time ago for some charity event, but nothing mass market). Literally everything you see out there using the Calvin & Hobbes likeness is unlicensed-- he's just not super litigious. Which is another reason he's one of the most unusual Americans ever.

Blue_by_U

August 16th, 2018 at 9:02 PM ^

Point well taken and while I'd traditionally agree, the screen printer wasn't making them for a profit, it was a quick whim with a hot character in that time, and was only provided to UM track guys...he charged what the shirt and ink cost, and that was that. He had to destroy the screen and in the end it wasn't a big deal, but as noted, the publishers apparently felt very different and he learned a valuable business lesson...careful what you print and who sees what you print, no matter the profit or motive.

PopeLando

August 15th, 2018 at 9:41 AM ^

Reading your comments, I'm pretty sure that you had a preconceived opinion of Ford and Hackett. This article doesn't reflect negatively on the man unless you want it to.

I'm sorry that you lost money on Ford stock, or were laid off, or Ford stopped buying from your company, or whatever happened.  Hell, I lost money on Ford stock too.

But aside from your obvious bias, there's a deeper issue here: if you need every stock to match the S&P 500...just buy an S&P 500 ETF. It's a smart idea already!

joeyb

August 15th, 2018 at 10:03 AM ^

Accoriding to this:

https://www.stocksplithistory.com/ford-motor/

Ford stock has split 4 times since 1989, meaning you'd have 5.48x as many stocks now as you would have had in 1989. That seems to account for 5.8% gains per year. You'd have to look at where you'd be at with reinvested dividends, but I'm guessing it's significantly higher than that. Historically, they've been in the 3-6% range. That's still not going to match the S&P 500, but no one really expects an established auto manufacturer distributing dividends to compete with the tech companies currently driving the growth of the S&P.

Mgrad92

August 15th, 2018 at 10:40 AM ^

I don't really have a dog in this fight, but data is available to settle this question. If you put $1,000 in Ford stock on Jan. 1, 1989, and reinvested all dividends since then, your investment would be worth $3,404.79 today (including stock splits), according to dqydj.com.

Screen Shot 2018-08-15 at 10.27.21 AM.png

An annual return of 4.28% is … not especially great for a stock investment. You'd like to see it around 6% or 7%. 

joeyb

August 15th, 2018 at 12:58 PM ^

Does that take into account the splits? I think I tried using that and couldn't figure out how, by adding dividends in, you'd have a lower return than just the splits. Based on their normal yield, of 3-5% that I saw, that seems to be about what you'd expect to see without taking into account splits. If it's not taking splits into account, then total return is somewhere around 10%, which is about what I'd expect.

Mgrad92

August 15th, 2018 at 3:39 PM ^

So, like, five things:

First: Take what I say with a grain of salt. I do this as a hobby/retirement investor, not for a living or even to supplement my income.

Second: Here's the full link to the DQYDJ calculator I was using: Stock Return Calculator with Dividend Reinvestment (DRIP) for EVERY Stock.

Third: You might follow that link and observe the big red notice at the top saying they lost their API and include no stock data since March. If so, you're doing better than I did. That seems like an important caveat, tho' less so since we're talking about a nearly 30-year investment.

Fourth: DQYDJ does claim to account for stock splits:

Here is a stock return calculator which automatically calculates dividend reinvestment (DRIP). It has daily resolution and properly accounts for stock splits and special dividends.

and

The calculator internally creates a datastructure which contains the initial purchase and the price fluctuations using stock closing prices on each day. (Normal) splits and dividend events cause us to increase the modeled number of shares held. Reverse splits will reduce the number of shares held.

However:

The stock total return calculated is idealized, based on closing prices, and will not match the exact returns. We are not modeling taxes, management fees, dividend payment timing, slippage, or other sources of error. It is possible that the dataset contains errors as well.

Fifth: The 4.28% calculated is an annual return, which accounts for compounding and isn't going to give you the same number as just multiplying out the number of shares owned after 30 years of stock splits. 

But regardless of all this, the takeaway is roughly the same: Saying a stock's price is the same now as it was in 1989 doesn't mean an investment hasn't gained in value, clearly. Also, it isn't a useful way to compare how a company's performed in that span.

But if your context is that you're picking any stock you'd like to have put your money in 30 years ago, Ford's return has been below what you'd like to see. By comparison, if you'd put your money instead in a mutual fund tracking the S&P 500 in 1989 and reinvested all dividends — and assumed no fees, no added costs, yada yada yada — you'd have seen an annual return of 10.363% without adjusting for inflation.

On the other hand, Ford might look pretty good compared to the rest of the industry. GM stock's annual return since 1989, for example, is about 2.40% using the same calculator.

lawlright

August 15th, 2018 at 2:23 PM ^

But $F is one of the best short-selling stocks I've experienced. Never drops below $9/share, always ranges $9-11/share. Back when I was playing with RobinHood, $F was what was keeping me in the black while gambling on pharmaceutical companies to make/break their FDA testing. 

So, thanks Ford for that. Bailed me out when $MACK didn't get one of their drugs approved.

Njia

August 16th, 2018 at 11:26 AM ^

"He has no idea what he's talking (sic) as it pertains to automotive manufacturing."

That's also not his job. Rather, it is to set a direction for the company and to be accountable for the outcome.

As I recall, Alan Mulally didn't know about automotive manufacturing, either. He was President of Boeing Commercial Airplanes before becoming CEO at Ford. He did, (and Hackett does) understand complex assembly, operations, supply chain, design, marketing, sales, finance, etc. Each is highly transferable across industries.

Your "you don't know automotive" attitude is exactly what I have observed in many with whom I've worked over the years in the industry. It's a close relative of "Not Invented Here," and it leads to stagnation and group-think. Which may also, come to think of it, explain Ford's putrid share price performance over the past several decades.

wildbackdunesman

August 15th, 2018 at 9:53 AM ^

Actually no.

I have it on good word from this guy on counterstrike that Michigan will start Rashan Gary at QB in South Bend.  We will run lots of wildcat and triple run option with Higdon, Evans, and Mason in the backfield all at the same time with Gary.

As for Patterson, he is starting as a WR.  We plan to utilize him a lot on end around plays where he has the option to keep the ball and run with his feet sweeping around the flank or to look downfield for a pass.

Mitch Cumstein

August 15th, 2018 at 9:06 AM ^

I just read the article. It didn’t come across as unflattering to me. It emphasized that he does things in a different way and the executives are still feeling him out and adjusting.  There were several anecdotes in the article that reflect positively on him.  For example, giving his reports more decision-making authority.  Not sure why OP is so negative, unless that opinion is formed by more than just the article posted. 

GotBlueOnMyMind

August 15th, 2018 at 9:38 AM ^

You’re basing it on the stock price? It has a >6% yield and ~5.5 P/E. Meanwhile, companies showing losses year in/year out are selling at far higher valuations. People can talk all they want about projected growth, but I’ll take the undervalued stock with actual earnings and a bunch of cash on hand. I may be way off base in my investing, but claiming Ford’s stock price is evidence of anything other than an undervalued company is crazy. As Keynes said, “the market can remain irrational longer than you can remain solvent,” and this market is nothing if not irrational.