Morgan Stanley thinks things at Ford could get worse before they get better

Andy Kiersz/Business Insider

Ford’s market cap is less than Tesla’s.

Morgan Stanley analyst Adam Jonas published a research note on Monday capturing his sentiment about the shakeup at Ford.

In a nutshell, Jonas thinks Ford’s languishing stock price could get worse before it gets better. Jonas also thinks that the company’s new CEO Jim Hackett, who had previously been running the carmaker’s Smart Mobility arm, might undertake further management shakeups.

But Jonas also argued that Ford could substantially rework its overall mission statement, which is what Chairman Bill Ford and Hackett said they aimed to do during a press conference Monday.

“Look for Ford to present itself as an AI, Machine Learning, Big Data, Tech Firm,” Jonas wrote. “Some investors may be skeptical. It all comes down to the execution and time.”

Actually, Fields had been characterizing Ford as a car-and-data company for some time, recognizing over two years ago that the rapid pace of change in vehicle connectivity and mobile services meant that Ford would be able to capture much more information flowing through its vehicles than at any time before.

As for artificial intelligence and machine learning, Bill Ford and Hackett seem to have been discussing these areas quite avidly, given Ford’s comments about driving innovative change throughout the carmaker’s business, rather than isolating it in the Smart Mobility unit.

The idea that Detroit automakers should forge deeper partnerships with Silicon Valley is nothing new. Tech firms have increasingly identified transportation as the next frontier, a multi-trillion-dollar industry that’s been doing business-as-usual for decades.

Ford has been moving in this direction, but the board’s perception is that it wasn’t moving fast enough. The demands of the traditional industry were holding the company back, but they couldn’t be easily overcome.