DETROIT – Ford and General Motors announced their fourth quarter and annual earnings Wednesday morning.
Despite last fall’s strike GM made out well and Ford’s results were lackluster.
GM made $8.4 billion dollars in 2019 and Ford made $6.4 billion. Compared to Tesla, who lost nearly a billion dollars in 2019 after losing a billion in 2018.
Ford is getting ready to launch the new Mustang -- the Mach E -- so things look good, right?
“Ford’s numbers were abysmal," said auto analyst John McElroy.
He said Ford is in big enough trouble that there could be a new CEO soon.
“Operationally, Ford has made a tremendous number of mistakes," McElroy said. "I think the outlook for Ford is not that good for 2020.”
GM moved on after its 2019 strike and has the upcoming electric Hummer being built in the Detroit-Hamtramck plant.
“I’m really impressed with what GM is doing," McElroy said. "It’s cutting costs internationally, which is why its profit wasn’t so bad despite the strike.”
How does Wall Street think about the auto industry?
Market capitalization is the company’s value based on its stock -- Ford’s market cap is $35.6 billion, GM’s is $49.5 billion and then there’s Tesla’s $140.5 billion -- Nearly double Ford and GM’s values combined.
“Stock price is all about what the market thinks is going to happen in the future," McElroy said. "The future for Tesla looks really bright. It’s opening its China plant. In fact, it’s already up and running. We’ll see what happens in China this year but Tesla sales could globally grow 40%.”
The ever controversial owner, Elon Musk, is now a wall street darling.
Yet McElroy said as good as Tesla might seem, it’s likely not that good.
“Sometimes the stock market gets a mind of its own and it just goes crazy despite what the facts are,” McElroy said. "Tesla’s future is bright but maybe not as bright as what the stock price shows right now.”
Tesla’s stock sank 20 percent Wednesday, but still kept its market cap above $100 billion.
McElroy believes Ford and GM are doing very well competing with Tesla, as they’ve each dedicated full plants to electric cars.