Ford Cautiously Up, GM’s Awkward Moment, McDonald’s Launches To Launch New Concept

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It's FRIIIIIDDDDAAYYY, and we’re talking about Ford’s profits amidst increased caution. We also talk about the complexity of GM’s profits and their effects on UAW negotiations as well as a new cosmic concept coming from McDonalds.

• Ford reported a $1.9 billion net income for the second quarter of 2023, marking a nearly threefold increase from the same period in the previous year. They also increased their overall profit forecast for 2023, but also predicted an additional $1.5 billion loss on EVs due to consumer concerns over pricing and scaled-back production plans.
  • Despite the EV business underperforming, Ford's overall revenue increased by 12% to $45 billion, with the commercial and gasoline-powered vehicle segments making significant contributions.  Ford Pro 15% and Ford Blue 9.2%
  • Adjusted earnings before interest and taxes for 2023 are now projected to be between $11 billion and $12 billion, up from the previous $9 billion to $11 billion estimate. The company also expects an adjusted free cash flow of $6.5 billion to $7 billion.
  • EV production targets have been delayed, targeting a 600,000 EV production run-rate pushed to 2024 from the previous goal of end-2023. The company no longer provides a forecast for when it plans to produce 2 million EVs annually.
  • Despite challenges in the EV market, Ford's CEO Jim Farley assured strong EV purchase consideration among potential buyers, and CFO John Lawler maintained their goal of achieving 8 percent EV margins by 2026.
• We reported on GM's big earnings earlier this week and it might be getting a little awkward, as strong financial results may complicate ongoing negotiations with the United Auto Workers union. Despite a Q2 revenue of $44.7 billion, GM's forthcoming discussions with the union and investments in electric vehicles may make for a challenging second half.
  • The current four-year contract with the United Auto Workers union expires in September and the last negotiation resulted in a strike that cost GM $3.6 billion.
  • The ongoing inflation and union-related challenges coincide with GM's massive investments in battery factories that pay lower wages and are not unionized, which is a sensitive issue.
• McDonald’s Corp. announced plans to launch a spinoff restaurant brand, CosMc’s, in 2024, based on the retro alien mascot CosMc from the 1980s and 1990s. The move follows a recent viral success with the Grimace-themed meal, a tribute to another old company character, which resulted in billions of social media engagements.
  • McDonald's CEO Chris Kempczinski described CosMc’s as a small format concept that maintains the McDonald's DNA but has its unique personality.
  • The announcement coincided with a UFO hearing in the House subcommittee, where it was claimed that the U.S. government possesses un

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