Ford Motor Company (F)

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In a Changing World, Is Ford Stock a Vote for Progress?
By: InvestorPlace | December 17, 2019

• Millennials now dominate consumer trends and Ford is listening

Back in the day, buying and holding Ford (NYSE:F) stock was something your grandparents and great-grandparents did for “slow and steady wins the race” kind of wealth accumulation. If anything, Ford shares represented traditional, old-school thinking. Perhaps a bit stodgy, but the rock-solid, dividend-enhanced gains were compelling.

That was then, and this is now. Generations Y (a.k.a. millennials) and Z (who are mostly teenagers and are starting to form their consumer and driving habits) are in the driver’s seat, and mega-corporations are bending over backwards to cater to their preferences.

This begs the question: can an old dog learn new tricks, and can Ford stock investors be confident that this century-old company is keeping up with the times?

Giving Young Investors a Reason to Buy F Stock

Since I’m immersed in the financial social media sphere during the majority of my waking hours, I think it’s fair to say that I’ve got my ear to the ground. I’m not picking up a whole lot of interest in F stock.

Millennial and Gen Z traders, at least at the moment, are mainly interested in ostensibly forward-thinking, envelope-pushing companies like Tesla (NASDAQ:TSLA) and Nio (NYSE:NIO).

Ford is, as far as I can tell, desperately trying to change that. I can’t blame the company, as the twenty-something consumer base is powerful and must be courted if Ford wants to retake auto-sector market share from Tesla and other upstarts. How, then, can an ancient firm known for giant, gas-guzzling vehicles lure a new wave of environmentally- mindful drivers?

It won’t be easy, but no one can claim that they’re not trying. For one thing, Ford’s got big plans in the red-hot self-driving vehicle space; with a catchy “No driver required” tagline, Ford’s autonomous-by-2021 initiative is ambitious and massively tech-enhanced:

The effort to build fully autonomous vehicles by 2021 is a main pillar of Ford Smart Mobility: our plan to be a leader in autonomy, connectivity, mobility, customer experience and analytics. The vehicle will operate without a steering wheel, gas pedal or brake pedal within geo-fenced areas as part of a ride sharing or ride hailing experience.

In just a couple of sentences, Ford managed to touch on a number of buzzwords and phrases that are rather blatantly millennial-focused: connectivity, mobility, ride sharing, and so on. Ford’s website and press releases offer similarly keyword-enriched copy on AI, 5G connectivity, and other Gen Y and Z touch points. No need to regurgitate all of that, but suffice it to say that Ford’s not afraid to go head-to-head with Elon Musk and company.

Building (or at Least, Rebuilding) Trust with Consumers

In the wake of this year’s protracted UAW strike, General Motors (NYSE:GM) has garnered a measure of negative publicity. Ford, simply by association, may have sustained some collateral reputational damage. Indeed, the Ford stock price sagged and careened throughout 2019’s second half, though the share price does look like it will end the year higher than where it began.

Perhaps in response to this, and undoubtedly in an effort to entice young drivers, Ford released a tract that would have stunned (and, most likely, appalled) Henry Ford. Entitled “Looking Further with Ford,” this half-report, half-advertisement strives to “build a bedrock of trust” with a call (and an implied promise to millennials) to “Inspire the ‘feel-good’ factor and tap into empathy,” “Invoke social pressure,” Make it legacy-oriented,” and “remove the sacrifice.”

With a quote from hot-button environmental activist Greta Thunberg, page 31 of the document talks about building empathy, promoting sustainable initiatives, reducing household waste, and engaging in “helping behavior.” I wouldn’t quite claim that Ford’s making a political statement here, but the company’s attempt to out-Elon Elon is certainly interesting — not bad, just interesting.

The Takeaway on F Stock

Okay, I’ll just say what’s on my mind: the “Looking Further with Ford” document strikes me as odd, out of character, and an unmistakable attempt at pandering.

I’m not suggesting offloading your F stock, and I’m glad that Ford’s trying to keep up with the times, but the company’s effort at Generation Y and Z outreach seems forced and largely unnecessary. Hopefully Ford will, at some point, get back to basics and remind consumers of what this company has represented for generations: awesome, powerful cars and American ingenuity.

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