The Ford F-150 Franchise Is Reportedly Worth More Than Ford Itself

Art by Jason Torchinksy
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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: The Ford F-150 Franchise Is Worth More Than Ford Itself, Analyst Says

Ford’s recent financial woes have been causing concern among investors, but in his report yesterday, Morgan Stanley analyst Adam Jonas cranked up The Blue Oval’s valuation for the first time in two years, in part, because of the strength of Ford’s mighty but undervalued F-150. Good news for Ford and its much-coveted standing with investors.


The Detroit News quotes the report, writing:

“We see Ford as an out-of-favor self-help story with room to surprise the market with cost-savings and profit-repositioning potential,” Jonas wrote. “At its current depressed valuation level, the value of its commercial franchise (F-Series) represents a larger percentage of its firm value than any other OEM under our global coverage.

The study itself, which you can read here, quantifies the F-150 franchise’s value, stating:

We [at Morgan Stanley] estimate the F150 franchise to be worth 135% of the market cap of Ford.


But of course, the F-150 isn’t the only reason why Jonas raised Ford’s earnings forecast by the largest amount in five years. Part of the move also has to do with CEO Jim Hackett’s restructuring efforts and cost cutting like FoMoCo’s planned $14 billion reduction in materials and engineering expenses, with the news site writing:

But certain moves like potentially restructuring segments of the company and redeploying funds could “halt years of underperformance,” he wrote. Ford has said it will move money around to shift the company’s focus away from car production and make more SUVs.


Jonas’s report says that Ford “isn’t out of the woods yet,” and recommends reducing nameplates and leaving “loss-making regions” as potential actions that could crank up the stock price.

2nd Gear: Japanese Car Companies Say Trump’s Tariffs Will Jack up Car Prices

President Trump has signed an executive order imposing a 25 percent tariff on foreign steel and a 10 percent tariff on foreign aluminum—a move that, according to Automotive News goes against a torrent of opposition from his fellow Republicans and the U.S. business community.”


The results are not likely to be good for anybody, especially car buyers, with the news site quoting chairman of the Japanese Automobile Manufacturers Association and current CEO of Nissan, writing:

But the new tariffs on steel and aluminum imports to the U.S. are nonetheless expected to drive prices higher across the board, JAMA Chairman Hiroto Saikawa said...

...“If there is going to be a tariff levied, then everyone will have to raise their prices,” Saikawa said at a news conference. “I don’t think this will have any good impact.”


We don’t know exactly how much prices will jump, in part, because we don’t know which countries will get which “exemptions.” These exemptions, Automotive News cites Trump as saying, will be “based on [countries’] contributions to U.S. national security and how much they pay into alliances such as NATO.”

So, as yet, there’s no dollar figure, but we’ll find out soon enough when we head to our local dealerships.


3rd Gear: GM South Korea Continues Fighting For Its Life

After GM shut down a major plant in Gunsan, South Korea, and complained about GM Korea’s performance, a protest was held, blame was thrown at GM’s U.S. operations for charging high interest rates, and then yesterday, South Korea said it was willing to give short-term loans to the ailing division of The General.


Now the struggle for life continues, with Reuters reporting that the South Korean union has agreed to give up pay raises and bonuses this year if GM can assure them job stability:

In exchange for agreeing wage concessions, the union called on GM to detail a roadmap for new models, and distribute stocks worth 30 million won ($28,214)in GM Korea to each worker after swapping the nearly 3 trillion won of debt owed by the Korean unit to its headquarters into equity.

The union also wants an agreement under which GM would not lay off all employees at GM Korea for the next 10 years.


The Union wrote a statement about its proposal, saying:

We make it clear that we are making concessions and sacrifices with unbearable pain, to protect jobs and survival rights of 300,000 workers.


General Motors previously said it expected the union to make concessions because of GM Korea’s poor performance. Reuters mentions the concessions that GM proposed, writing:

GM...has proposed a base wage freeze and no bonuses this year as well a suspension of some worker benefits including school tuition for employees’ children.


Whether GM will accept the South Korean union’s agreement, we don’t yet know, but Reuters says the Detroit-based company is still awaiting financial support from the South Korean government, so there’s still more to come on GM Korea’s fight for life.

4th Gear: Supplier Juggernaut Magna Invests In Ride-Hailing Company Lyft To Expedite Autonomous-Driving Tech


Lyft is on a quest to develop self-driving technology, having partnered with GM and Ford on the tech, and now partnering up with Magna, with Forbes writing about the tier one supplier:

Lyft is partnering with global auto parts giant Magna to speed development of self-driving vehicles as the rideshare company intensifies its focus on creating a fully automated mobility service. As part of the alliance, Magna is also investing $200 million in Lyft.


The idea behind the partnership with the supplier is to make Lyft’s self-driving technology available to the masses, and not just to select car companies, with the news site quoting CEO Logan Green as saying:

We don’t want just one or two companies in the world to access self-driving technology...We want every OEM to be able to access the technology and be able to use the Lyft network.


Here’s how the partnership would work:

“We’re going to do hardware development, software development, we’re going to do safety testing, we’re going to be designing for manufacturing and integrating components from third parties,” Green said. “Magna is going to take the lead on manufacturing. They are going to manufacture the self-driving system and they are going to be upfitting vehicles from a number of OEMs to be able to operate on the Lyft network.”


Who knows, maybe automakers will be buying Lyft-designed self-driving car kits from Magna at some point down the road.

5th Gear: There’s A New Subaru Forester Coming This Month

The New York Auto Show is only a couple of weeks away, and among the debuts will be the next-generation Forester, which is to be built on the Subaru Global Platform (the bones that will make up every new Subaru for the next 10 years or so, according to Forbes).

Image: Subaru

The new vehicle, whose new teaser image is shown above, is huge deal for the purveyor of lifted wagons, especially considering America bought 177,563 Foresters in 2017. That’s a ridiculously high figure.


Reverse: Jaguar’s Legendary E-Type Is Born

Via Auto Express:

The Jaguar E-Type was first revealed on 15 March 1961 in Geneva to huge excitement from the world’s press...

...The E-Type was a revolutionary car in many ways but it was Malcolm Sayer’s beautiful bodywork that set it apart from anything else on the road. With its faired-in headlamps, a long, sculpted nose and centred twin exhaust, there was nothing else like it and the car remains a unique proposition today.


Neutral: What are your thoughts on this tariff thing?

With lots of voices in opposition to the president—including from industry and within his own party and administration—how do you think these tariffs on imports are going to pan out for the U.S.?

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About the author

David Tracy

Writer, Jalopnik. 1979 Jeep Cherokee Golden Eagle, 1985 Jeep J10, 1948 Willys CJ-2A, 1995 Jeep Cherokee, 1992 Jeep Cherokee auto, 1991 Jeep Cherokee 5spd, 1976 Jeep DJ-5D, totaled 2003 Kia Rio