“Cheaper Repairs”: Ford Stock (NYSE:F) Slips as Ford Takes on Unicasting

Legacy automaker Ford (F) may be on to something big here, and it has Tesla (TSLA) to thank for it, at least in part. Ford is turning to what Tesla calls “gigacasting,” or what others call simply “megacasting” or “unicasting,” to improve production and make repairs cheaper. It may even help with Ford’s growing litany of product recalls. But Ford investors seemed concerned regardless, based on the 1.5% loss in Ford shares in Friday afternoon’s trading.

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Basically, the system creates unibodies, or large parts of the car all at once that make up the “skeleton” of the car. These unibodies are assembled in large segments, instead of in a process of several hundred smaller processes combining to make a car. This got people wondering if it would now be easier, or less expensive, to perform repairs. On the one hand, there were far fewer things able to go wrong. On the other hand, if something did go wrong, it would be something big, an entire unibody part.

New reports out suggest that repair costs for the new unibody cars are actually on par with standard unibody repair jobs, and in some cases, somewhat less expensive. It turns out that, over the years, repair shops managed to figure out how to repair specific parts of a unibody. This meant that the broken part could be fixed, instead of needing to be swapped out entirely. That reduces costs substantially.

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Focus on Trucks

Ever since Ford dropped the Escape, many wondered how Ford could make up the loss. The Escape was a big seller, after all, especially for those looking for a small, more cost-effective SUV. Ford is looking to its truck line to take up the slack, reports note.

Ford’s executive director of advanced electric vehicle development, Alan Clarke, noted, “Ford has a very unique capability, we think, in the pickup truck market. It has the trust of its customers, and therefore has a unique positioning that it should take advantage of to own that space.” All of this is true, certainly, but with economic uncertainty currently ruling the day, the idea that people will choose to buy a large Ford truck against a smaller competitor seems like a bit of a long shot.

Is Ford Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, 11 Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 16.4% rally in its share price over the past year, the average F price target of $13.95 per share implies 22.31% upside potential.

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