Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Ford, GM juggle today's challenges with tomorrow's promises

Stock MarketsJan 28, 2022 12:47PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Ford CEO Jim Farley poses with the all-electric Ford F-150 Lightning pickup truck during the unveiling at the company's world headquarters in Dearborn, Michigan, U.S., May 19, 2021. REUTERS/Rebecca Cook/File Photo 2/2

By Joseph White and Paul Lienert

DETROIT (Reuters) - General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co are expected to report next week they turned solid profits for the last quarter of 2021, but rarely has past performance mattered less to investors.

The two Detroit automakers are in mid-leap between a combustion-powered present, and a future they have promised will be defined by electric vehicles and software-powered services.

Both companies have mapped out multibillion-dollar investments in new North American electric vehicle and battery factories, aimed at challenging Tesla (NASDAQ:TSLA) Inc and a flock of smaller EV startups in the still-tiny market. But those new factories will not be at full speed until the middle of this decade.

Though GM and Ford were once giants of the global auto sector, their market capitalizations have been dwarfed by EV maker Tesla. Tesla on Wednesday reported stronger than expected revenue and profit for the fourth quarter of 2021, but warned that supply-chain bottlenecks would continue through 2022 and likely prevent its factories from running at full capacity.

GM last year sold fewer vehicles in the United States than Toyota Motor (NYSE:TM) Corp, the first time in 91 years that GM was not the No. 1-selling automaker in its home market.

GM and Ford's profits in 2021 were lifted by consumers willing to pay record-high prices for petroleum-powered pickup trucks and SUVs. In 2022, analysts are concerned the Detroit manufacturers will face a more uncertain economic environment, including rising interest rates, high oil prices and continuing supply-chain bottlenecks that could curtail production.

Analysts expect both companies to be cautious in their outlooks for 2022. Shortages of semiconductors are expected to weigh on production into the second half of the year, Bank of America (NYSE:BAC) wrote in a note.

"While automakers will enjoy production recovery and inventory restocking, (those) could be coupled with price declines, mix deterioration, rising input costs," Morgan Stanley (NYSE:MS) said.

Ford told investors in its third-quarter report that it expected $1.5 billion in higher commodity costs, and saw inflationary pressures across a broad range of expenses.

Wall Street has shown more confidence over the last several months in efforts by Ford's CEO, Jim Farley, to accelerate the company's electric pickup truck and van programs. Ford's market value hit $100 billion in mid-January, exceeding GM's value for the first time in more than five years. But the market value of Ford, whose quarterly results are expected on Thursday afternoon, has since dropped by 20% after the company issued a complicated reworking of its 2021 profit guidance.

GM Chief Executive Mary Barra is expected to have a more straightforward story to tell on Tuesday about fourth-quarter and full-year results. GM Chief Financial Officer Paul Jacobson told investors in December the company expected adjusted pretax profit for 2021 to reach $14 billion, higher than previous forecasts.

Ford, GM juggle today's challenges with tomorrow's promises
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email