It seems these legacy automakers have no intention of winning the fight. First, they have to enter the ring and land solid punches.

The old guard is crumpling under the withering fire they are receiving from many quarters. For want of a nail the battle was lost, but for want of innovation, insight, and an archaic management system, Ford and GM will lose the battle of EVs.

CEO's of both companies say they are "all-in" on EVs, which is a bold pronouncement considering that between them they only currently produce a single EV domestically, the Chevrolet Bolt. So we can discount that statement as wishful thinking, or an attempt to persuade investors that these companies will be producing EVs en masse in the future, which many believe is the future of transportation.

First, let's take a Cliff Notes look at where both companies stand in terms of financial health, since, as most will agree, for legacy auto to make progress in the EV space it will cost them a lot of money. Back in October 2019, Ford debt was downgraded, then again in March 2020. This means borrowing will cost Ford more. Ford tapped out its last few credit lines to their limit and issued bonds (some as high as 9.5%), which is horrible in low-interest world. It discontinued its dividend, and its stock fell to around $5, though recently it has gone up quite a bit as people consider that the worries of the virus are behind us and Ford is reopening factories and restarting production.

Ford's overall debt is enormous (something around $155 billion), more than its net worth and many times more than its market capitalization of $30 billion. It has billions in unfunded pension liabilities too, which I doubt will ever be paid off. Its finances are a complete mess. It gets 90% of its profits from the F-150. Its Mustang Mach-E is coming as a last-ditch effort to get a vehicle in the EV space that will be compelling and appealing, but I think it's a false hope. Ford is way too far behind and I think the reliance on a single vehicle for almost all your profits is a recipe for failure.

GM, on the other hand, is in better shape financially than Ford, but it has a massive debt of around $95 billion, it also suspended its dividend, and its stock is down with the virus, too. The one EV it produces domestically, the Bolt, is an also-ran, though it does place – comes in second in the domestic EV market – it's more of a place holder. Its production has fallen every year since it was first produced in 2017, down to just over 18k after its debut year when just over 28k were sold.

The Bolt refresh has been delayed, Maven, the driving service, has been discontinued, the much-ballyhooed Cruise Automation – GM's self-driving suite – is not progressing as hoped, and various labor issues afflict the company. GM plans to make a Cadillac EV, a dying brand, a Hummer EV, which I actually think is a good idea. GM has made many announcements about upcoming EVs, which have not materialized.

If we take the position that electric cars are the future, both Ford and GM are operating in the past. It's business as usual, but business is not looking good. The projections for the SAAR (seasonally adjusted annual rate) – how many cars will be sold in 2020 – is looking somewhere between horrible and catastrophic, between 12-14 million is the guess of most auto analysts. Fewer cars sold means less money. My own view is even worse with around 11 million vehicles produced and sold in the U.S. in 2020, down from 17 million last year.

The future is not looking good for either company, and more downsizing – as GM has been doing for years – shuttering plants, and laying off workers, is in the offing. While there are some bright spots for both companies, I don't think they will be enough to offset years of mismanagement and burying your head in the sand as the switch to EVs gathers steam. Their inability to change, innovate, and not let go of old ways of thinking, has not helped their prospects. Both Ford and GM have had their moments in the sun, their hundred days, but now those days are about to come to a close.

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