Ford launches $11 billion restructuring plan

Background - Ford Motor Company

Ford Motor Company is Mullaly’s “One Ford” plan & Mustang Mach-E unveiled
founded in Detroit, Michigan by entry into hybrid vehicle
Henry Ford. market with Escape Hybrid

1903 2007 2019

1913 2018

Model T production via moving Ford launches $11 billion

assembly line restructuring plan
Background - Tesla
Tesla founded & Tesla begins production $35,000 Model 3 becomes
incorporated with Roadster available

2003 2008 2019

2004 2018

Elon Musk joins Tesla Tesla posts first profitable

during Series A funding quarter.
Current Business Strategy- Ford
● Company-wide restructuring
● Layoffs
● AI
● Electric / hybrid vehicles (Rivian)
● Larger vehicles
Current Business Strategy- Tesla

● Build new architecture

● Control battery bottleneck
● Deliver a complete experience
○ Car
○ Upgrades
○ Charging
Risks To Consider...

Tesla
● More competition entering the market
● Part time CEO
Tesla’s R&D spending (2010-2018)
● High R&D expense/ not turning a profit

Ford
● Declining stock performance and sales volume
● Changing market/ needs to adapt
● $11 billion spend on restructuring Ford
Tesla
Elon Musk
Analyzing Financial Positions
Ratio Analysis

Tesla has increased their current liabilities in relation to

their current assets.
Ford has remained relatively consistent.

Both companies show a 0.2 - 0.3 drop from their current

ratio with the exclusion of inventory.

Tesla falls below the industry average of 2.5 for major

automakers, while Ford is more highly leveraged.

Ford’s 2018 ROE falls slightly below the industry avg. of

12% for 2019 Q1. Tesla continues to need large
sources of additional equity.

Both companies fall below the industry average of 5.89%

for 12/31/18.
Altman Z-Score (Bankruptcy Score)

- 1.92

- 0.94

As of December 3, 2019
Balanced Scorecard
Stock Price Performance - YTD

Ford

Tesla
Stock Price Performance - 5 Years
YTD

Ford

Tesla
Recent Advancements to Consider

Tesla
● Tesla Cybertruck
● Remote software updates
● Expanding supercharger infrastructure

Ford
● All electric Mustang SUV
● The Bronco is back
● Junk rating from Moody’s
 Where to Invest? It Depends…
What’s your risk tolerance?

Low Risk High

● Established company ● Growing revenue but not

● Pays dividends yet profitable
● $37 billion in cash and ● Highly innovative/ invests
short-term investments on in new technology ($$$)
hand ● Auto & tech company
● Not an electric vehicle only
company