Ford Vs General Motors – Here’s What Jim Cramer Said

Jim Cramer frequently compared Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) in his discussions. In a recent appearance on September 3rd, Cramer praised Ford's CEO Jim Farley and expressed concerns over the company's quality issues, which he believed needed to be addressed. Despite those challenges, Cramer is optimistic about Ford's software subscriptions and EBIT guidance growth.

Ford Pro commercial division's software subscriptions expanded by 35% annually in the second quarter. Management also raised full year EBIT guidance from $8 billion to $10 billion to $10.1 billion. This positive growth is a welcome respite from the ongoing troubles experienced by Ford's electric vehicle (EV) business. During the same period, Ford's EV unit consumed $1.3 billion in cash, potentially resulting in a full year loss of $4 billion.

Furthermore, a decline in Gen-1 EV sales led to a $1.9 billion drop in Q2 revenue, bringing the total to $48.3 billion.

In contrast, General Motors Company (NYSE:GM) has successfully navigated the EV headwinds, reporting a $1.3 billion profit in the second quarter. The company's revenue grew by 1.9% to $48 billion, matching Ford's revenue figures. GM also revealed plans to repurchase up to $6 billion in shares, a move that might appeal to Cramer's perspective on stock buybacks. The company's forward P/E ratio of 5.74 is lower than Ford's 7.46, indicating that GM might be a more attractive investment opportunity.

However, Ford's short interest as a percentage of float is almost nonexistent, while for GM, it stands at 2.48%. A comparison of hedge fund interest also reveals that while 75 funds held a stake in GM during Q2, only 50 did so for Ford.