Give credit where it is due, legacy automaker Ford (F) is responding to its conditions by protecting itself. In fact, it is looking to its management tier to produce some cost savings. The move resonated with investors, and Ford shares were up modestly in Tuesday afternoon’s trading.
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The new reports—from six different people—is that roughly half of Ford’s middle management will not see stock bonuses in 2025. That is being done as a cost saving move, reports note, and senior management will be deciding just which middle managers get the stock bonuses this year. The move is being called a means to “…incentivize an improvement in employee performance.”
Ford has been struggling with high costs throughout the shop, ranging from its electric vehicle business—which has already had to downscale once—to even its gas-powered vehicle business. It is unclear just how much money Ford will save by cutting half its middle management out of the bonus pool, but the amount is likely sufficiently substantial to make the cuts worthwhile.
The Unexpected $2.5 Billion Expense
And Ford will be needing that cash, too, as it just got slammed with a $2.5 billion court verdict against it. Down in Decatur County, near Atlanta, Herman and Debra Mills were involved in a fatal rollover accident in their Ford F-250 Super Duty pickup. After a subsequent court case in which the Mills’ sons took on Ford, the jury in said case found against Ford, with attorneys for the Mills’ sons noting that the F-250 Super Duty had “…defective and dangerously weak roofs.”
Ford representatives, meanwhile, expressed condolences for the Mills’ fatal accident, but noted “…the verdict is impermissibly extreme and not supported by the evidence.” It will, not at all surprisingly, appeal.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on four Buys, eight Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 20.96% loss in its share price over the past year, the average F price target of $10.56 per share implies 13.67% upside potential.
