Much has been made recently of legacy automaker Ford’s (F) “skunk works” lab designed to bring out new developments in electric vehicles. But what most do not realize is that there is another lab out there that delivers significant value. It is not a big lab, but it has a big purpose: keeping parts from being damaged in shipping. This notion was not enough to do anything for Ford shareholders, though, who sent shares careening down over 7% in Friday’s trading.
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The lab in question is known as the Ford Shipping Equipment Design and Test Center, and its sole purpose is to make the things that Ford uses to ship products. This may not sound like much, but ensuring that those little bumps and bruises that go along with shipping product do not result in damaged product is actually a vital task. In fact, the Test Center is a big part of keeping costs low and improving vehicle quality at Ford.
Ford’s director of North American logistics, Bill Strong, noted, “People just don’t realize, you’ve got to test these (shipping) parts to make sure you’re getting quality parts into the assembly plant. The delivery process is absolutely key to long-term quality and also our short-term quality, like three months in service.”
Scarcer Jobs
Meanwhile, numbers recently emerged on how many jobs Ford has cut so far this decade. Since 2020, the report noted, Ford has cut about 5,000 salaried jobs in the United States. This number comes at a rather awkward time for Ford, as CEO Jim Farley recently hit the Aspen Ideas Festival to remark, “…artificial intelligence is going to replace half—literally half—of all white collar workers in the U.S.”
While Ford’s immediate rival, General Motors (GM) has shut down around 11,000 jobs in just two years—between 2022 and 2024—it is still clear that job cuts are the order of the day at many large employers. It is unclear just how much of a connection AI has to these cuts, but there is certainly some connection.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, nine Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 34.07% rally in its share price over the past year, the average F price target of $13.69 per share implies 1.42% downside risk.
