Ford Motor Co. (NYSE:F) Q3 2019 Earnings Conference Call - Final Transcript

Oct 23, 2019 • 05:30 pm ET

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Ford Motor Co. (NYSE:F) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Joseph R. Hinrichs

was launched in 1924. It's very, very constrained as far as physical location, and as far as land and the area around the plant. Simply put, we took on too much. We signed up for too much at launch. We tried to launch on three crew, which we didn't even try to do when we launched the Limited F-150 back in 2014. We launched the Aviator and Explorer both at the same time. We had the hybrid version of the Explorer, we had the Police Interceptor, we had Black Label Aviator, we had all this content and simply put, with the new, with the product going from front-wheel drive to rear-wheel drive architecture, all new assembly lines, all-new body shop, all those things at once, we took on too much and we shouldn't have.

And so, part of the lessons learned is obviously go back to how we manage these launches and sequence to them in a way that gives the team a chance to be successful. Our wholesales were down in the third quarter about 19,000 Explorers year over year, and we also had an additional 6,000 Aviators that weren't in the previous year. And so we feel really good about the fourth quarter. The last week or so, we've been running about 59 JPH, we're actually running out a parts from our suppliers as we started to ramp up. We used to run at 60 JPH, so we're just about at where we have been historically in that plant, plus we have the show center, the new additional line coming online starting at about 6 JPH by the end of the month.

So, we actually feel really good about where we are right now, it's been a lot of work and a lot to get here. The products look great. We have plenty of available inventory now in the dealers, and we're excited about where they're going to go from here.

For the rest of the launches, John, the Super Duty launch looks good this year, The Transit launch looks good this year, Puma in Europe looks good. We have a lot of work to do for next year's launches, but I feel good about where we are for the rest of the year.

Analyst
John Murphy

Okay, and then one quick last one on Ford Motor Credit. Given the rate environment is shifting around on us in a direction nobody expected 12 months ago, you had the credit downgrade at Moody's. I'm just curious, as you're managing Ford Motor Credit, has anything changed in the way you're thinking about the business? Where are we on the shift of getting better return on assets on sort of a constrained, a purposely constrained, asset base? Could we see returns improve, or profitability improve, as soon as next year, based on some of those actions?

Executive
James P. Hackett

John, Jim Hackett. I'm going to hand it to David McClellan. As a former bank board member managing through the crisis in this last decade, I'm really proud