It was a mix of good news and bad for legacy automaker Ford (F) today, as new information emerged about a strike in Europe and a new and somewhat distressing buying pattern. But Ford took it in stride, as did its investors. Shares were up over 2.5% in Monday afternoon’s trading, as the mix of news turned out to be a net positive as far as investors were concerned.
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For the first time ever, noted reports, workers at the Cologne plant in Germany are ready to go on strike. Essentially, Ford is planning job cuts in the region, and the German workers are prepared to take everybody off the board for at least a while to demonstrate their value more thoroughly. Work will stop Wednesday morning, noted reports, and will continue until Thursday morning when the night shift ends.
With reports noting that Ford looks to cut 2,900 jobs out of the 11,500 people who still work there, this could be a pretty substantial cut indeed. It is also worth noting that, as recently as 2018, around 20,000 people were employed therein. With these latest cuts, the number will drop to less than half of that figure.
“…Customers Doing What They Can…”
The next item was good news for Ford, at least in the short term, as Ford discovered its customers were comparatively resistant to pricing, willing to do “…what they can,” according to CEO Jim Farley, to keep buying Ford vehicles. Reports noted that Ford customers were willing to go to longer-term financing in order to be able to afford a vehicle.
Farley noted that there were “…84-month financing increases as a share of our offers on the financing side.” In fact, there was also an increase in applications for the longer-term financing, as customer were prepared to go to seven-year loans just to get their hands on a car. While this is good news for Ford, an economic recession cropping up may leave Ford in a worse position in the second half of this year.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 11 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 16.63% loss in its share price over the past year, the average F price target of $9.82 per share implies 6.7% downside risk.
