Ford (NYSE:F) is facing plenty of bearish selling anytime the stock tries to break above the $9.50 to $10 range. The company’s deal with the United Auto Workers, cutting two models, and the quarterly earnings report did not help the stock by much.
Ford will give a $9,000 ratification bonus for all of its full-time workers, while temporary workers get $3,500. The company will invest $6 and create or retail 8,500 Ford jobs. This is an expensive but necessary deal to avert a strike.
In the interim, Ford will need to improve its long-term prospects by meeting its EV production and supply automation plans. By cutting down on personnel costs over the next few years, Ford may eventually operate more effectively and improve profits.
One-time restructuring charges hurt the short-term view of the company. The company said:
"So we continue to refine our estimates of the cash ramifications from the restructuring actions that we're taking and I now expect $1 billion to $1.5 billion in 2019. Again, $0.7 billion of which has already occurred."
Source: SA Transcript
By 2021, restructuring activities will start to show up on the bottom line, a scenario that is not reflected in the stock price. Shares trade at steep forward P/E discounts that value investors cannot ignore.
Disclosure: author owns shares of Ford.
