F Ford Motor Company

By Christina Rogers 

Ford Motor Co. Chief Executive Mark Fields said Wednesday the company will continue to remain "laser focused" on improving its own business and creating value for shareholders.

He declined to respond directly to questions about Tesla Inc. overtaking Ford last week to become the second-most valuable car maker in the U.S.

"I can only speak about Ford," Mr. Fields said at the New York International Auto Show. "As we've said, we don't manage our company on day-to-day stock movements.

"I'm confident over time we're going to create value for our shareholders," he added.

Ford's stock price has slumped more than 30% since Mr. Fields took over as CEO in mid-2014, despite the car company reporting a string of record profits in recent years and investing billions in emerging technologies, such as electric vehicles and self-driving cars.

The steep decline has allowed Tesla, a 13-year-old electric car maker that sold only 76,000 cars globally last year, to surge pass its much larger rival in market value.

Mr. Fields is working to reshape Ford, including expanding into new services businesses that could potentially deliver higher profit margins, but investors aren't convinced of the company's growth prospects as the U.S. new-car market slows and growth in China tapers off.

Tesla's stock continues to rally, though, defying broader market concerns. On Monday, Tesla briefly leapfrogged General Motors, when the company's stock price climbed to $313.73 a share, pushing the market value to $51 billion.

Tesla shares are up more than 40% this year, while Ford's stock has declined 10% since January amid concerns on Wall Street that the Dearborn, Mich., car maker's profits have peaked and the auto industry is headed into a cyclical downturn.

Ford is forecasting lower pretax operating results in 2017 and estimates U.S. industry sales volumes will fall through this year and next. Company executives expected profits to rebound in 2018, after further belt-tightening and Ford moving passed a period of heavy investment this year.

Tesla's recent stock rally has surprised many in the car business and comes as Chief Executive Elon Musk faces numerous challenges accomplishing the goals he has set out, including building 500,000 vehicles next year. Tesla's output last year was just 84,000 cars.

While the brand has attracted a loyal fan base for its pricey electric cars, the Silicon Valley car company remains deeply in debt and is still struggling to turn a profit.

Ford's North America chief, Joe Hinrichs, said Tuesday that cash flow should influence a company's market value, but that just hasn't been the case in the auto industry. "The market isn't totally rational," he said, when asked about Tesla's market valuation.

Mike Jackson, the head of the nation's largest dealership chain, AutoNation Inc., also described Tesla's stock value as "inexplicable" and said GM is undervalued at $33 a share.

Write to Christina Rogers at christina.rogers@wsj.com

(END) Dow Jones Newswires

April 12, 2017 13:26 ET (17:26 GMT)

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