8 Stocks on Jim Cramer’s Radar

5. Ford Motor Company (NYSE:F)

Number of Hedge Fund Holders: 36

Cramer touched on Ford Motor Company’s (NYSE:F) warranty issues and the company’s disappointing third-quarter results.

“It is a great American company, but it does have warranty problems that I think are gonna come back to haunt it. And I had to sell for the Charitable Trust because it just kept missing the quarter and that’s no way to run a stock. Maybe a car company but not [a] stock.”

Ford (NYSE:F) is involved in the development, production, and servicing of a wide range of vehicles, including trucks, commercial cars, vans, SUVs, and luxury Lincoln models. The company has prioritized addressing its quality issues since 2020. As part of these efforts, it has made changes to its production processes, introducing measures aimed at better identifying errors and allocating additional workers to spot safety concerns.

Despite these efforts, the company has led the industry in recalls since 2021. Warranty costs have continued to weigh heavily on Ford’s earnings this year. In its second-quarter results, the company reported a $800 million increase in warranty expenses compared to the same period in the previous year, mainly due to issues with vehicles launched in 2021 or earlier. During the third quarter, management noted that high warranty costs were affecting the company’s ability to reach record adjusted EBIT for the year.

However, as reported by Reuters, CEO Jim Farley stated that after three years of focused efforts to address all of the company’s deficiencies, the company now has everything in place to improve its quality for both customers and the business. This statement came as the company continues to make progress in its efforts to improve quality.

On December 18, Ford (NYSE:F) confirmed the appointment of a new head of quality, with the change expected to take effect in early 2024. This move is designed to allow Ford’s teams to collaborate more efficiently and deliver vehicles and software with the highest quality for customers.