The idea of bringing artificial intelligence (AI) into the workday is the kind of thing that comes with some clear concerns. While much of the time, it is set up as a way to help the worker, most workers in turn cannot help but wonder when it replaces the worker instead. Legacy automaker Ford (F) is bringing AI into the workplace, particularly at the Dearborn Truck Plant. Investors seem particularly enthusiastic about this, and sent Ford shares blasting up nearly 9% in Friday’s trading.
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Ford is, not surprisingly, making it clear that it is not out to replace anyone with its use of AI, but rather—as noted by plant manager Corey Williams—that AI will help workers do more and better. For instance, the AI systems will spot small errors that humans can miss. This will reportedly go a long way toward fixing problems early, which could pare back the amount of recalls that Ford has to issue later on.
Ford is also looking into 3D-printing its own line of tools for use on the factory floor, adding augmented reality to headsets, and using AI to back up monitoring systems throughout the factory. The end result is an employee that does a lot more, and thus becomes more valuable. The unspoken question is that, when one employee can do the work of two or three, then why keep the second or third employee when the same work can be done for significantly less?
Speaking of Dearborn Truck
Dearborn Truck is actually temporarily shutting down the line, but only for a few days. Friday, Saturday and potentially Sunday will all see shutdowns as Ford works to repair a “broken hood die” at one of its stamping plants. The hood die is a mold that gets used in a press, and makes things like elements of the vehicle hood.
This is bad news for Ford, because the Dearborn Truck Plant was making F-150 units. Those are facing shortages as things stand, and with Ford shutting down a factory for most of Memorial Day Weekend, that will take about 2,500 pickups out of dealers’ hands. With Ford already 60,000 units short, any additional delay in production just exacerbates the shortage.
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, nine Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 31.95% rally in its share price over the past year, the average F price target of $13.50 per share implies 9.06% downside risk.
