Ford Motor Co Chief Executive Jim Farley won applause from Wall Street by increasing the production target for the automaker’s electric F-150 to 150,000 a year, more than three times the original number.
Now, Farley wants investors and commercial vehicle customers to pay more attention to the software and services Ford wants to sell with those trucks, as well as to the company’s electric Transit vans and its portfolio of combustion engine commercial vehicles.
At an event in Sonoma, California, this week, Farley and other Ford executives are rolling out more details of their Ford Pro commercial vehicle strategy – and setting ambitious goals.
“This is a first move by Ford to really start to scale and commit serious resources to digital software and services-based revenue,” Farley told Reuters.
Ford Pro is a standalone unit created last May https://www.reuters.com/business/sustainable-business/ford-boosts-ev-spending-aims-have-40-volume-all-electric-by-2030-2021-05-26 to focus exclusively on commercial and government customers.
Ford has set a goal to increase Ford Pro’s annual revenue to $45 billion by 2025, up 67% from 2019. Farley said Ford Pro is paving the way for Ford to expand digital service offerings to retail customers.
The U.S. and European commercial vehicle markets are fragmented, Farley said. Ford can use its position as the leading commercial vehicle brand in the United States and Europe to be a leader in pulling the pieces together as commercial fleets go electric.
“We are the Tesla of this industry,” he said.
Ford Pro, which will house the Dearborn, Michigan, automaker’s commercial vehicle operations, is now ramping up a commercial electric vehicle charging business using software and workers who came on board when Ford bought charging startup Electriphi https://www.reuters.com/business/autos-transportation/ford-buy-ev-charging-management-platform-electriphi-2021-06-17 in June 2021.
Ford Pro also has a partnership with Silicon Valley enterprise software power Salesforce.com Inc to develop software to digitize billing and other paperwork for contractors and other businesses that deploy people to jobs where the vehicle also serves as office space.
Ford Pro Chief Executive Ted Cannis said in an interview the unit has 125,000 active accounts, and a 40% share of the U.S. commercial van and pickup markets. Startups such as Rivian Automotive Inc and established rivals such as General Motors Co and its new BrightDrop van unit https://www.reuters.com/business/autos-transportation/gms-commercial-ev-unit-expand-vehicle-lineup-add-verizon-customer-2021-09-28 are aiming for big customers such as FedEx Corp or Amazon.com Inc as golden tickets to vehicle-based service businesses.
With Ford’s stable of small and medium-sized business customers, “I’ve got 125,000 golden tickets,” Cannis said.
TREPIDATION OVER EVs
Ford has tried before to expand higher-margin service businesses to augment its traditional manufacturing business, which do well to crack 10% pretax margins in good years. In the early 2000s, Ford acquired a repair services chain and auto salvage yards in an attempt to capture revenue from a larger chunk of the life cycle of a vehicle. Those diversifications were abandoned.
Ford’s new service strategy will have to overcome efforts by rivals that are also racing to sell electric vans and trucks to commercial vehicle fleets. Individual pieces of Ford Pro’s service business, such as fleet charging, will face competition from companies such as ChargePoint that already offer such services.
Rhett Ricart, whose Ohio-based Ricart Automotive Group is a major Ford commercial vehicle dealer, said Ford executives have “done their homework” on Ford Pro. Now, he said, the automaker must deliver electric vehicles that do not leave business customers stranded.
“Those vehicles have got to be flawless. People will have trepidation. They know what they’ve got with internal combustion engines. They know where to get gasoline,” Ricart said.
Farley and Ford executives said connected vehicle technology – including telematics systems that give Ford a pipeline to receive data from its vehicles – give the company a firmer foundation for recurring revenue, subscription services as well as increased repair business driven by software that tells fleet owners when it is time for vehicle maintenance.
Ford can analyze how many miles vehicles in a fleet drive, and where they are parked, to design hardware and software that allow for recharging at a central depot, or at a worker’s home, or both, said Muffi Ghadiali, former CEO of Electriphi and now head of the Ford Pro electric vehicle charging business.
“Because of telematics we can give them a very precise plan based on how the fleets operate,” he said.
(Reporting by Joe White in Detroit; Editing by Matthew Lewis)
Bankers buck gloomy trend by forecasting growth amid concerns about economic slowdown – The Globe and Mail
Top executives at two major Canadian banks predict they can keep adding new loans and increasing profits in the coming quarters, offering an optimistic outlook for the financial sector that is at odds with economists’ increasingly gloomy forecasts of a downturn ahead.
Bank of Nova Scotia BNS-T and Bank of Montreal BMO-T both reported higher second-quarter profits on Wednesday, underpinned by robust demand for personal and commercial loans as well as lower loan loss reserves than analysts anticipated. Profits increased 12 per cent compared with those in the same quarter a year earlier at Scotiabank, and 4 per cent after adjustments at BMO, as rising interest rates helped increase margins on loans.
That marked a strong start to the major banks’ earnings season, but analysts cautioned those results, which cover the three months ended April 30, already look distant in the rear-view mirror. They pressed senior executives about how the banks are bracing for a deteriorating economic environment marked by war in Ukraine, high inflation, rapid central bank rate hikes and the increasing prospect of a recession that could curb customers’ appetite to borrow.
Bank chief executives and finance chiefs stressed they still expect economies to grow as COVID-19-related headwinds ease. They noted that most households are in good financial health, as many stashed away extra savings during the pandemic, while unemployment remains low in a tight labour market. Businesses are borrowing to bulk up inventories as demand for products outstrips supply, and some sectors, such as commodities, are booming.
“The macroeconomic backdrop for our key geographies remains positive,” said Scotiabank chief executive Brian Porter, on a conference call with analysts on Wednesday. “Despite the macroeconomic and geopolitical uncertainties in recent months, we are encouraged by the resilience of our businesses.”
The mood among economists is much more downbeat as the threat of a global recession mounts, even though few are predicting that is highly likely. The tone has also been sombre as business leaders and policy makers rub elbows at the World Economic Forum’s gathering in Davos. And the former governor of Canada’s central bank, Stephen Poloz, recently predicted the country is heading for a period of stagflation – a mix of slow growth and high inflation.
Yet increases in banks’ loan balances have been broad-based, and BMO chief financial officer Tayfun Tuzun said in an interview that he still expects “high-single-digit loan growth” year over year – the same guidance he gave three months ago.
“All in all our clients are telling us that they’re still interested in investing in their businesses,” said Mr. Tuzun. He added that there are “a lot of good indicators for what’s to come” for the bank.
A particular bright spot is commercial lending in Canada, where loan balances rose 13 per cent at BMO and 19 per cent at Scotiabank in the second quarter. Scotiabank’s chief financial officer, Raj Viswanthan, said corporate clients and consumers have “very strong” balance sheets at the moment, “so we see a lot of pent up demand.”
The disruptions caused by COVID-19 and war in Ukraine have also increased demand in key areas, Mr. Viswanathan said. “It’s supply chain issues, it’s the rise of e-commerce, it’s the demand for food.”
Bankers aren’t blind to the gathering economic storm clouds. BMO chief risk officer Pat Cronin said his bank is giving greater weight to a hypothetical scenario that predicts the impact of a severe downturn, and has lowered expectations for parts of its forecast it considers the base case.
When U.S. banking giant JPMorgan Chase & Co. hosted an investor day this week, chief executive Jamie Dimon summed up the outlook as, “strong economy, big storm clouds,” saying those clouds “may dissipate. If it was a hurricane, I would tell you that.” But he acknowledged “they may not dissipate, so we’re not wishful thinkers.”
The Bank of Canada published a paper this month that suggests the country’s banks are strong enough and well capitalized to withstand even a severe, prolonged downturn in which unemployment peaks at 13.5 per cent and house prices fall 29 per cent.
Gabriel Dechaine, an analyst at National Bank Financial Inc., wrote to clients that, “in a normal environment, such optimism would be met with positive expectations for stock price appreciation,” but he remains “more cautious … as long as the disruptive forces of inflation that heighten recession expectations persist.”
In the fiscal second quarter, Scotiabank earned $2.75-billion, or $2.16 per share, compared with $2.46-billion, or $1.88 per share, in the same quarter last year. Adjusted to exclude certain items, Scotiabank said it earned $2.18 per share, well above the consensus estimate of $1.98 per share among analysts, according to Refinitiv.
In the same quarter, BMO earned $4.76-billion, or $7.13 per share, compared with $1.3-billion, or $1.91 per share, a year earlier. After adjusting to exclude one-time items that include a $2.6-billion gain on a financial instrument tied to BMO’s US$16.3-billion acquisition of California-based Bank of the West, profit was $2.187-billion, or $3.23 per share. On average, analysts expected $3.24 per share on an adjusted basis.
Both banks raised their quarterly dividends, by 3 cents per share to $1.03 at Scotiabank, and by 6 cents per share to $1.39 at BMO.
Two key factors that have supported banks’ rising profits through much of the pandemic – rapidly rising mortgage balances and unusually low losses from defaulting loans – appear to have reached peaks, and are set to return to more normal levels.
Mortgage balances rose 16 per cent year over year at Scotiabank and 8 per cent at BMO, benefitting from the tail end of a red-hot streak for housing markets. But that yearly growth rate is “slowly slowing,” said Dan Rees, Scotiabank’s head of Canadian banking, and is likely to revert to a pace in the range of 6 to 9 per cent in the coming quarters even as some economists are predicting housing prices will fall.
Provisions for credit losses – the funds banks set aside to cover losses in case loans default – “reached the floor this quarter,” said Phil Thomas, Scotiabank’s chief risk officer. He and his BMO counterpart, Mr. Cronin, expect loan loss reserves will gradually drift higher. But with write-offs and delinquencies still very low, neither risk officer is predicting a spike in loan losses, even though it will rapidly get more expensive for consumers to service their debts.
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World's fastest passenger jet goes supersonic in tests – CNN
YYJ delays: RCMP called to Victoria International Airport | CTV News – CTV News VI
Travellers who have a flight planned at Victoria International Airport (YYJ) on Tuesday are being warned of travel disruptions due to police activity.
Sidney/North Saanich RCMP say the airport was closed after a suspicious package was discovered around 1:30 p.m.
Cpl. Andres Sanchez of the Sidney/North Saanich RCMP says that the airport was closed to all incoming and outgoing flights “out of an abundance of caution.”
He said the airport will remain closed until police “can be sure it is safe for the public to travel.”
“The package was located at the departures/check-in [area], so it was brought in by a passenger,” said Sanchez Tuesday afternoon.
The package was flagged by Canadian Air Transport Security Authority (CATSA) staff who spotted what appeared to be an “incendiary device” within a bag, he said.
“CATSA employees performed the checks that you normally do at a departure situation at the airport,” he said.
“They scanned the bag and found there were items inside that could be of a dangerous nature and at that point police were called to the scene to investigate further,” he said.
Mounties say a specialized RCMP team has been called in from the mainland to remove the bag from the premises and to “ensure the package is dealt with in a safe manner.”
PASSENGER UNDER INVESTIGATION
Sanchez says the individual who brought the bag is under investigation, but it’s unclear if any criminal charges will be recommended yet.
“Again, because we don’t know what’s in that bag we can’t speak further on that,” he said.
In the meantime, people are asked to avoid the airport for the next few hours, according to RCMP spokesperson Sgt. Chris Manseau.
Around 4:20 p.m., the airport said all scheduled commercial flights for the next two hours were cancelled.
The airport is working with airlines to keep them updated on the status of flights.
Police say they hope the airport will be able to reopen Tuesday night, but it’s uncertain how long the investigation at the property will take.
Travellers should check the YYJ website for the latest updates on their flights, according to the airport.
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