What job-listings data tell us about the future of Ford

The historied Ford Motor Company is one the most watched firms in the US. Once an icon of America’s Industrial Revolution, its performance over the years has caused everything from euphoria to despondency. Its well-known planned transformation into a more technology-led firm carries a special significance. And as a large-cap with a high dividend, it is one of the most widely traded securities in the world.

Unsurprisingly then, investors are hungry for more information than the guidance offered through official results. Increasingly, they are turning to alternative data.

What Ford’s job postings tell us

It is known that job postings can provide deep insights into a company’s long-term strategy What is less well-known is that ahead of the guidance offered in quarterly statements, job-listings data can provide a close-to-realtime indicator of whether a firm will hit its targets. The value of such data can be seen in how well it has anticipated the performance of Ford.

The automaker is a useful case study both because it is a widely held stock, a major US employer and, moreover, because investors regularly complain that the company is overly reticent when it comes to shareholder guidance. This lack of information has even been cited as a reason for intermittent downward pressure on Ford’s share price.

In spite of dissatisfaction with official guidance, analysts have a generally positive view on the stock. Currently (March 11), Ford is rated ‘hold’ by 15 analysts polled by the Wall Street Journal, with six rating the stock ‘buy’ or ‘overweight’, and just one rating it a ‘sell’.

Still, analysts share uncertainties about how well Ford is managing its medium- to long-term restructuring program – which emphasizes a shift toward self-driving vehicles – as well as whether it will achieve its more immediate earnings targets. Quandl’s exclusive US Job Listings (UJL) dataset has been able to provides insights into both of these concerns.

Long-term shift to tech-focused vehicles

In August 2016, Ford said it planned to have a fully autonomous fleet of vehicles in production by 2021. Historical job listings data suggests that the company began hiring for this longer-term goal in earnest almost a half year earlier, around April/May 2016.

In the spring of 2016, there was an uptick in job postings that were geared towards skillsets in math and computers, with job titles such as “Software Engineer – Ford Labs”. Simultaneously, the number of roles for production engineers were declining as a percentage of total hiring.

CHART: Ford Job Postings by Type

The ramp up was significant through 2016. Unique job openings in R&D with math and computer skills rose to 30% for Ford by the end of 2017 compared to levels in the mid-teens at the start of 2016.

Focus on technology adding to near-term margin pressure

Job listings data confirmed Ford as being serious about its long-term shift to autonomous vehicles. This shift also shed advanced light on the company’s near-term performance.

Specifically, increases in job postings lined up with near-term operating margin compression. Intuitively, this makes sense. As a company hires more people for longer-term projects – rather than, say, filling immediate vacancies – there is a period where those employee contributions to revenue will lag their costs.

A focus on the future generally shifts priorities towards higher cost centers like R&D. While there are other factors in the compression of Ford’s operating margins on a quarter-to-quarter basis, the read through from job postings provided insight on the operational decisions of the group that impacted near-term earnings with a solid one- to two-quarter lead for investors.

CHART: Ford Margins and Job Postings

This resulted in operating margin compression through 2016 as hiring ramped up, followed by a rebound in margins as hiring slowed through the middle of 2017. This pattern was repeated in the second half of 2017 and the final six months of 2018, where margins were squeezed as hiring of R&D and technical staff was stepped up.

Ford restructuring events

In addition to signalling an increased focus on technology in hiring, a reduction in job postings for more traditional roles has been a strong leading indicator of Ford’s restructuring plans in vehicle manufacturing. Specifically, there were strong signals of restructuring ahead of cost-reduction plans announced in both May 2017 and April 2018.

UJL data showed a peak in July 2016 followed by nine consecutive monthly declines, then bottoming out in April 2017 at which time the company announced job cuts.

This pattern repeated itself in 2018. Again, with advance job-posting data investors could have been aware that changes were coming before cuts were made. In 2017, job postings peaked in December followed by reductions in postings for four consecutive months. Management at the end of April announced further cost-saving measures that included a discontinuation of U.S.-produced sedans.

In both cases, the decline in job postings provided an early signal – months ahead of announcements – that restructuring was ongoing for Ford. Here we look at job postings at major production centers in the U.S., including postings at its Michigan HQ in and major sites in Ohio, Kentucky, Illinois, and Kansas.

CHART Unique Monthly Job Postings at Ford U.S. Production Centers

Find out more

Hiring data can tell you a lot about a company and its prospects, As with Ford, types of jobs advertised can indicate areas of focus. Hiring rates at factory sites can indicate changes to production. Changes in hiring locations can indicate such things as expansion or retrenchment plans.

Quandl’s UJL dataset is an exclusive offering. Collected by a leading labor market research and analysis firm, it offers daily job posting activity, tagged with the associated company, ticker symbol, position title, sector and job location. The data is unique and comprehensive. Covering over a million US companies – including over 3,000 publicly traded firms – it richer and deeper than any other employment data currently available on the market.

If you are interested in learning more about UJL data and how it can benefit your firm, get in touch with one of Quandl’s subject matter experts.