Al Root
Ford Motor is launching a new ad on Monday, hoping that U.S. car buyers will lean into a buy American trend.
It is the most American of the traditional Detroit-Three auto makers, but that comes at a cost for investors and consumers.
Ford's new ad, slated to air during game five of the NBA Finals between the Oklahoma City Thunder and Indiana Pacers, is the second in the "From America, For America" series. "At Ford, 80% of the vehicles we sell in America are assembled in America," starts the commercial.
That's the highest percentage among traditional auto makers. General Motors and Stellantis assemble about 55% of the cars they sell in the U.S. domestically. The average for the overall industry is about 50%. EV makers Tesla and Rivian Automotive assemble all the vehicles they sell in the U.S. domestically.
GM and Stellantis didn't respond to a request for comment about Ford's ad strategy.
Ford's ad also points out that if the rest of the industry were "like us, " then there could be up to 15 more car plants in the U.S. Ford has nine assembly plants in the U.S., with the capacity to produce some 2.6 million cars annually. Being "like" Ford would mean an additional four million cars assembled yearly in the U.S.
The math on Ford's 15 plants checks out, but car plants come in all shapes and sizes. GM recently announced $4 billion in U.S. investments that should boost U.S.-based production in the coming years. That shouldn't require new plants, the existing footprint can handle the volume, but it will require more jobs.
Ford has about 57,000 hourly workers in the U.S. today. (GM and Stellantis have about 47,000 and 39,000 respectively.) Another four million cars of assembly volume should mean another 100,000 to 150,000 direct jobs plus supporting jobs.
More jobs are great. There is an affordability trade-off with domestic manufacturing, though. The average transaction price for a new Ford in the U.S. is about $55,0oo, according to data provider Cox Automotive. The numbers for GM and Stellantis are about $53,000. That doesn't mean Ford is a high-cost producer, but it shows that when building in the U.S., auto makers tend to focus on higher-value models.
The average price for a new car is about $49,000. Cars.com points out that most of the lower-priced models sold in the U.S. are built outside the U.S.
Over the past three years, Ford has generated a per-car profit of about $1,300, according to Bloomberg. The numbers for GM and Stellantis are about $1,800 and $2,700, respectively. The number for Toyota Motor is closer to $3,200 per vehicle.
Those are global figures and incorporate many factors. Still, it does indicate that Ford hasn't been as profitable despite selling high-price vehicles. That has long-term implications for the company. The extra $1,900 earned by Toyota turns into bigger factories with better scale, turning out improved models with new features over time.
No one ever said the car business was easy.
Ford's manufacturing base has been an asset recently. Coming into Monday's trading, Ford stock was flat since the Nov. 5 election. GM and Stellantis shares were down about 8% and 28%, respectively. The S&P 500 and Dow Jones Industrial Average were down slightly and off 4%, respectively over the same span.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 16, 2025 16:00 ET (20:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.