Amid CEO Controversy, Ford’s Stock Holds Strong

Based on comments by Ford management, their stock should be plummeting. The CEO, Jim Farley, made inaccurate remarks about the company facing bankruptcy and accused the UAW of holding a labor contract hostage, referring to negotiations over pay and benefits. The union is simply employing standard negotiation strategies.

Despite an uncertain financial future, Ford’s shares traded at $12.43, almost 10% above where they traded a year ago. The stock also carries a nifty 4.8% yield.

Experts remain optimistic about Ford’s future due to the ongoing rise in new car prices, resulting in historically high profit margins. The sales of its flagship F-150 full-sized pickup, constituting a significant portion of Ford’s annual vehicle sales in the US, continue to be strong. Despite challenges, Ford is still viewed favorably by investors as a potential victor in the electric vehicle market.

People who know enough about the car industry anticipate a near-future scenario where the US faces a vehicle shortage due to essential plants being closed by the UAW. Similar to the initial stages of the COVID-19 pandemic, disrupted supply chains led to reduced inventory and increased prices, a situation that might repeat itself soon.

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Ford’s chance to do well in the EV market is primarily due, in the near term, to its F-150 Lightning, an EV version of its popular pickup. Ford has millions of F-150 owners who are a great set of targets for versions run by an electric engine — this is the good, the bad, and the ugly about owning an D-150.

Investors who have kept Ford’s stock price at a surprisingly high level despite the UAW strike see Ford coming out of it in fine shape.

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