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Ford (F) Announces Investments and Plans to Replace CEO

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Ford Motor Company (F - Free Report) announced its decision to invest $350 million to upgrade its Livonia, MI transmission plant for building fuel-efficient vehicles. This is part of a $2.25 billion investment in the state announced earlier by the company.

The investment will help Ford add or keep 800 jobs at the facility, some of which are expected to be filled this year. Majority of the jobs, however, will be filled over the next two years. Last year, the automaker revealed an investment worth $1.4 billion in the Livonia transmission plant. Recently, the company stated that employment at the plant have risen from about 1,550 last year to 1,800 presently.

However, last week, Ford announced that it will be cutting 1,400 salaried jobs in North America and Asia, which represent roughly 10% of its workforce. The company is offering financial incentives, including early retirement offers, to encourage salaried employees to retire voluntarily. This is part of the company’s initiative to cut costs by $3 billion.

Reportedly, Ford recently made changes in the senior management. The company also plans to replace CEO, Mark Fields, with current executive chief, Jim Hackett. This comes as a move to check the company’s rapidly declining share price. The company's shares have lost almost 40% since Fields took over as CEO in Jul 2014.

Price Performance

Ford’s shares have underperformed the Zacks categorized Auto Manufacturers-Domestic industry in the last three months. The company’s shares lost 13.5% during this period, while the industry declined 3%. Increasing recalls and concerns in certain end markets are adversely affecting share performance.

Zacks Rank & Key Picks

Ford currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space include Lear Corporation (LEA - Free Report) , Fiat Chrysler Automobiles N.V. and Fox Factory Holding Corp. (FOXF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lear has an expected long-term growth rate of 7.1%.

Fiat has an expected long-term growth rate of 22.4%.

Fox Factory has an expected long-term growth rate of 16.5%.

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