What happened
Ford (F 3.07%) shares declined Tuesday after two items of news from the company. The stock dropped as much as nearly 3% and remained down just over 2% as of 2:30 p.m. ET. Ford recently warned its third quarter would be negatively impacted by unexpected supplier costs and unfinished vehicles waiting for parts. But the big news today was about investing in the company's future.
So what
Unlike its rival General Motors, Ford has made it clear it doesn't plan to completely transition to an electric vehicle (EV) company. Instead, Ford plans to move forward with its Ford+ restructuring plan. The company will separate into three businesses, including an EV segment dubbed Ford Model e, the Ford Blue internal combustion engine business, and Ford Pro that will focus on business and government customers. Today, the company announced a new $700 million investment in the Ford Blue business. Also today, Ford has asked for a new trial after it was ordered to pay a $1.7 billion verdict by a Georgia jury related to a truck accident that resulted in two fatalities.
Now what
The 2014 accident involved a Ford F-250 pickup truck, and the family of the victims claimed Ford was at fault after the roof collapsed on the occupants in a rollover accident. But Ford is now seeking a new trial, saying it was unfairly kept from providing evidence that it says could show that the truck involved was safe, and the roof structure would rank highly versus its peers. The roof design was a focus of the plaintiff's claims.
NYSE: F
Key Data Points
Ford had previously said it would appeal the verdict, and many observers felt the amount of damages would be reduced. But now the company is seeking a new trial in a motion before the court as well as challenging the punitive damages from the prior trial.
Also today, Ford said it will invest $700 million in one of its Kentucky facilities. The investment in its truck plant is being made to "support vehicle production, including for the all-new 2023 Ford F-Series Super Duty® truck." Investors already knew the company was going to continue to support its legacy internal combustion engine business, so the investment news shouldn't have come as a surprise. It's more likely that today's drop is more related to the downward momentum that began after its Q3 earnings warning.
