Ford Motor Co.’s Jim Hackett and Tesla Inc.’s Elon Musk are rallying the troops with similar appeals to make more money.
Hackett called Ford’s performance last year “mediocre by any standard” in an e-mail to employees late Jan. 24, according to a person familiar with it, who asked not to be identified discussing internal communications.
“Yes, we made $7 billion last year,” Hackett wrote. “But think of it this way: This represents a 4.4% operating margin, about half what we believe is an appropriate margin. So we are aiming for much closer to $14 billion.”
Ford Motor Co. President and CEO Jim Hackett (Carlos Osorio/Associated Press)
The memo is reminiscent of the message Musk delivered to Tesla workers last week. After a small profit in the third quarter, preliminary results were lower for the last three months of last year, and the electric car maker may manage to target only a “tiny” bit of income for the first quarter of 2019, the CEO wrote. As a result, Tesla is cutting about 7% of headcount.
Hackett’s e-mail was consistent with remarks he made to Bloomberg Television during last week’s Detroit auto show, when he said he was “not happy” about Ford’s performance. The automaker has long said it is aiming for an 8% profit margin, though last year it jettisoned a goal to achieve this by 2020. Its margin shrank to 4.4% in 2018.
Ford rose as much as 4.2% on Jan. 25, the biggest intraday gain in more than two weeks. The stock has climbed about 15% this year after a 39% plunge in 2018. Reuters reported Hackett’s memo earlier.