Once-venerable Ford faces an uncertain future

Key Points
  • Ford's share price is down 25 percent this year.
  • The company is undertaking a restructuring plan to restore its fortunes.
  • Pickups and SUVs are selling well in North America, but Ford's international businesses struggle.
Ford's fight to remain an American icon

These days, Ford Motor can't seem to please investors.

Shares of the automaker are down around 25 percent this year, even though Ford remains a profitable company with an iconic brand and a solid footing in some of the fastest-growing automotive segments.

U.S. rivals General Motors and Fiat-Chrysler have managed emerge from bankruptcy to impress the industry and investors alike. But Ford, the company that to American ears is practically synonymous with the history of the automobile, is widely seen as being very much in the middle of a turnaround.

The company's third-quarter earnings surpassed expectations, even though they were down from the same quarter in 2017. As of Monday's premarket, shares have climbed 16 percent since the release of the latest earnings report on Oct. 24, but they are still trading below $10 a share, while GM's shares hover around $38 a share.

Ford's F series continues to top sales with 70,000 units

The automaker has shown strong performance in North America but continues to struggle internationally. Its South American business has not made money for years, and Ford said in late October that its businesses in China and Europe had "deteriorated." This contrasts with GM, which sold off its European business and is doing rather well in China.

To be sure, Ford is taking action to reverse its fortunes.

The company has separated its China business from its Asia-Pacific segment and hired an executive to run just that region. Ford's primary problem in China has been an inability to keep up with the rapidly changing consumer tastes of the Chinese market, said IHS analyst Stephanie Brinley. Ford recently released a new SUV just for the country called the Territory, and is planning to put out several more vehicles to refresh its lineup there.

It has also said it will undergo an $11 billion restructuring that will cut jobs from its salaried workforce of 70,000 employees.

Ford has also revived its once-popular Ranger mid-size pickup, taking advantage of its solid footing in the growing truck market. It also has a few new products on the way in the next couple of years, including the highly anticipated reintroduction of the Ford Bronco off-road SUV, which will be based on the Ranger's platform.

The company is phasing out traditional passenger car production, betting drivers will continue to pay out for more profitable trucks and SUVs. Ford especially needs to maximize profits since it has to continue to operate as it has for the last century, while sinking billions into research and development of new businesses and technologies such as self-driving cars.