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Ford CEO Joins Tesla's Musk in Appealing to Employees for Profit

Ford CEO Joins Tesla's Musk in Appealing to Employees for Profit

(Bloomberg) -- Ford Motor Co.’s Jim Hackett and Tesla Inc.’s Elon Musk are rallying the troops with similar appeals to make more money.

Hackett called Ford’s performance last year “mediocre by any standard” in an email to employees late Thursday, according to a person familiar with it, who asked not to be identified discussing internal communications.

“Yes, we made $7 billion last year,” Hackett wrote. “But think of it this way: this represents a 4.4 percent operating margin, about half what we believe is an appropriate margin. So we are aiming for much closer to $14 billion.”

Ford CEO Joins Tesla's Musk in Appealing to Employees for Profit

The memo is reminiscent of the message Musk delivered to Tesla workers last week. After a small profit in the third quarter, preliminary results were lower for the last three months of last year, and the electric-car maker may manage to target only a “tiny” bit of income for the first quarter of 2019, the CEO wrote. As a result, Tesla is cutting about 7 percent of headcount.

Ford CEO Joins Tesla's Musk in Appealing to Employees for Profit

Hackett’s email was consistent with remarks he made to Bloomberg Television during last week’s Detroit auto show, when he said he was “not happy” about Ford’s performance. The automaker has long said it’s aiming for an 8 percent profit margin, though last year it jettisoned a goal to achieve this by 2020. Its margin shrank to 4.4 percent in 2018.

Ford rose as much as 4.2 percent Friday, the biggest intraday gain in more than two weeks. The stock has climbed about 15 percent this year after a 39 percent plunge in 2018. Reuters reported Hackett’s memo earlier.

To contact the reporters on this story: Alexandra Semenova in New York at asemenova10@bloomberg.net;Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Melinda Grenier

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