Good Ford and Bad Ford

Ford is in the midst of transformation. To finance the transition to electric mobility, the Americans are reportedly considering splitting the company.

One of the grand, venerable automakers urgently needs fresh capital in order not to fall behind. Ford's market value is currently listed at 70 billion euros. Competitor Tesla has far surpassed this. The market value of the Californian company, at 880 billion, is more than twelve times higher, despite Ford selling four times as many vehicles.

Tesla the future, Ford the past?

In the stock market, the current situation is not the only factor evaluated; the attractiveness of a stock is primarily determined by its potential for future development. Now, the Bloomberg news agency reports on plans to fundamentally restructure Ford. There is talk of splitting into "Good Ford," responsible for building electric vehicles, and "Bad Ford," which would handle the combustion engine business and basically always has the looming end in sight. The sale of gasoline vehicles still accounts for the lion's share of revenue – and this will remain so for years to come. However, the split could, according to Ford managers' hopes, excite investors and drive up the value of the electric vehicle division on the stock market. This, in turn, would secure the desired capital for further restructuring of the company.

Rivian valued at as much as Ford on the stock market

The full-size pickup Ford F-150, despite losses, is still the best-selling model in the USA. The electric start-up Rivian delivered just 1,000 vehicles last year, compared to Ford's approximately 3.9 million. The entry of Amazon founder Jeff Bezos as a major shareholder in Rivian has driven the company's value upward.

With the pickup Rivian R1T, Rivian is now directly challenging Ford's cash cow, the F-150. Ford is attempting to counter the rival with its F-150 Lightning.

Resistance is to be expected

In the efforts being pushed by major shareholders to restructure the company Ford, resistance is expected. The heirs of the company founder hold three seats on the board of directors and, with Bill Ford, the great-grandson of Henry Ford, they also hold the chairmanship. Through special stock arrangements, they also wield significant influence. A division of the company would reduce their power. The auto union UAW is equally alarmed and fears job losses.

The disentanglement of the corporate divisions will be challenging if a split occurs. In most factories, both electric cars and combustion vehicles are produced. Many employees and engineers work in both areas. Untangling this would be a particular challenge for the company leadership.