By on March 30, 2009

It’s time to buy Ford stock. It’s the big winner from the Presidential Task Force on Automobiles (PTFOA) announcement today– although you wouldn’t know it listening to the MSM. That’s the way Ford wants it… below the radar, off the screen, out of the limelight. They’ve been getting a dead cat bounce already; never has silence been so golden. The dictum “never gloat in the misery of others” makes for good business sense, since one never knows when the table will turn. Anyway, here’s why Ford will ride high. 

First, Chrysler will go away thirty days from now. There is no deal with Fiat that saves Chrysler – ever. Why would Fiat take a stake in a company where the US taxpayer gets paid ahead of the Italians? Would you transfer your engines, your cars, your expertise and get zero return on your money for years? And add the fact that it will be at least two years before pasta-powered cars show up in America– with no guarantee that Americans really want very small Euro cars anyways. How does Chrysler survive in the interim? Will six billion dollars in assistance carry Chrysler for that period? I think not.

Then let’s examine the fact that Chrysler, unlike GM, has mostly secured debt lenders which are owed only $7 billion. Are they going to surrender their debt for an equity stake in a company that likely has no future even when run by the Italians? Heck, they’re better off with the liquidation proceeds. And that’s what they’ll do: give the Presidential Task Force on Automobiles the middle finger and hold firm on getting repaid. Hello Chapter 7 for Chrysler. 

And GM? Do you really think that there’s any plausible way for GM to restructure its entire business in the next sixty days? Nope, and the PTFOA and GM know it. Today’s “conditional bailout” is really just a prelude to pre-packaged bankruptcy. It’s a breather that gives the company the time to get its ducks in a row before the filing. As the Viability Report acknowledges, General Motors has to sacrifice brands and dealers. Only a bankruptcy allows those changes without facing massive liabilities. Count on a GM bankruptcy as a fact, not speculation.

So with Chrysler gone to nothing but an asset sale, and GM rapidly downsizing to a much smaller company worldwide (likely consisting of only two brands in North America), the playing field for Ford just opened up. No more rabid discounting wars led by Chrysler. GM will be spending time to figure out a proper restructuring with management tied up in a court reorganization.  Wow, in the midst of an auto meltdown, Ford sneaks through by staying the course on a plan designed two years ago.

it’s a new day dawning for Ford. The Blue Oval Boys will pick up a significant share of the commercial fleet business. That’s the big companies and government agencies that buy vehicles and mostly only from domestics. The three domestics currently split roughly 600k vehicles a year. The number is set to increase with the “stimulus package. With Chrysler gone and GM downsizing all of its excess capacity, Ford will see orders roll in. And with less competition, prices go up. Smell those profits.

On the consumer side, Ford will have a new Taurus this spring. The 2010 Fusion is rolling into showrooms now. Next year, a Euro Focus hits our shores (although built in North America). New turbocharged engines are on their way. And of course, Ford’s stalwart truck business continues.  More units sold with better pricing can only produce more cash flow and profits for Ford.

Ford Europe benefits from GM’s struggles here. GM’s Opel can’t survive on its own. Without German government assistance, it’s more likely than not that Opel joins the dustbin of failed automakers. But even if the German government steps up, Opel still suffers from an “also ran” image in Europe. As a ward of the German government, Opel will make all the wrong decisions.  Don’t forget, German really has its own “Green Party” as a voice in the legislature.  

Sure, Ford’s balance sheet isn’t pretty with the company leveraged to the hilt. But it will accomplish a debt exchange since the carnage of a bankruptcy (thank you Chrysler and GM) leaves the creditors with… not much. Better to take the equity today and some cash for a stake in the future with Ford. While it will dilute existing shareholders, positive earnings of any kind will put a fire under Ford’s stock.  And that’s going to happen sooner than later. The US car market is way below trend at a nine million units SAAR – and can only rebound above trend when buyers return. Ford will be there to benefit. Count on it.

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55 Comments on “Ford. Buy!...”

  • avatar

    I would not interpret a leaner Chapter 11 GM, free of dealer, brand, debt and (possibly) labor obligations, and armed with government guaranteed warranties, as a good thing for Ford.

  • avatar
    Ken Elias

    The government warranty guarantee program is extended to Ford too. Labor agreements between all of the remaining Detroit companies will be identical so Ford benefits as well from whatever is worked out. Not having debt on the new GM’s balance sheet is not a correct assumption. GM will require massive DIP financing so even when it emerges from bankruptcy, the debt will still be there.

  • avatar

    Chances are good that Ford is about to become so amazingly powerful that foreign car companies are going to have to take notice. Ford now has very good Hybrids, freshened models and soon, here in America, the “real Rolex” Focus. I read the review on this website on the Ford Fusion Sport and yes, that is very nice. The times they are a changing. Ford even has all those fancy Mazda designs to work with now. Along with those Volvo designs. Get ready. This is actual. A domestic car maker is about to be fully with it – in the right place, at the right time.

  • avatar

    With Red Ink Rick out, and CH11 looming, GM’s looking a little beaten right now, but is preparing to come out in better shape once they work out a little and lose some of the fat. Dropping some UAW obligations and a few brands will only be possible under bankruptcy, but it will be nothing less than a boon for GM, and I expect them to be 100% competitive when the smoke clears. GM’s got a tough road ahead, but don’t count them out.

    OTOH, someone put a fork in Chrysler.

  • avatar

    Ken Elias:

    The UAW has announced that Ford will be given whatever deal GM gets in Bankruptcy court? I don’t think the reciprocity goes quite that far. On the other hand, this administration isn’t going to let the UAW get too beat up in a GM BK.

    GM may come out of Chapter 11 heavily leveraged, but while they are in Chapter 11 they will have a nice, interest free ride. Chapter 11s are notoriously harmful to competitors, one well documented example is the airline industry.

    Arguing that Ford has a chance of emerging from the current economic downturn without bankruptcy is one thing. [Turn on Jim Cramer voice] “Buy! Buy! Buy!” is another.

    Right now is probably tremendous buying opportunity, but nobody knows for what, making good old diversification the best bet.

    If one is invested in the wrong thing he will miss out on the right thing.

    Since the return of automotive sales to “normalcy” will possibly coincide with China’s emergence as a US auto exporter my money would not be overweighted in any auto companies.

  • avatar
    Kyle Schellenberg

    That’s a pretty rosy picture, but I don’t disagree that Ford will benefit in many ways from all this. For most, buying a car is an emotional experience, so customers will tap into Ford’s heroics when it comes time to slap the cash on the counter. Just remember that companies other than Ford will be more than willing to pick up the slack in sales and they’ll be heavily promoting their “Made in America” status on certain models.

    The biggest question I see here is with the union situation. I know that Ford did some restructuring with the UAW to lower costs, but if GM hits the reset button what happens to their union situation? Will they have a wage advantage over Ford?

    GM will be tainted goods (public perception) if they do go C11 and return to market. It’s hard to take something like the Corvette and brag about your company’s history when you realize, after the fact, there was a big booger hanging out of your nose on your Class of 2009 picture.

    I’m genuinely concerned about what’s going to happen to the after-market sticker industry. If the sale of cartoon boys pissing on Chevy and Dodge logos craters, then surely those businesses will suffer. Perhaps they should make an appeal for government money while they can.

  • avatar

    You know what particular brand of Ford gains a hell of a lot from this?

    Believe it or not, Mercury! Buick and Chrysler, it’s too traditional competitors, will be dead. Mercury will be the only American entry-level luxury brand left.

  • avatar
    Justin Berkowitz

    I think the $1.20 share price may have been the optimal time to buy Ford. Still, if they survive, it seems like the share is headed nowhere but up a few bucks.

  • avatar

    I liked (didn’t love, just liked) Ford at $5, and I still like it, but for somewhat different reasons.

    Where Ford will win is in the US large truck market. There should be enough scared customers who will be inclined to defect from GM and Dodge to support relatively strong sales. This is one segment in which Toyota is the up and comer, not the leader, and the margins are healthy.

    Ford doesn’t have too many other shining stars in North America, but there should be enough products, such as the Fusion, to keep it in the game.

    What Ford lacks are a decent balance sheet and a sustainable luxury brand, which puts pressure on their debt management and constricts its margins.

    It’s not the safest stock, so I’d be careful with it. It’s more speculative than it is an investment. Toyota would be a much safer bet.

  • avatar

    It looks like you’re spot-on, Ken. The WSJ has an article that says the administration “prefers” the bankruptcy option, in which both GM and Chrysler would be broken into “good” and “bad” parts. Interesting read, and while the article doesn’t discuss the dead-cat bounce for Ford, I think this editorial complements the WSJ article nicely.

  • avatar

    BDB—I think Lincoln is entry level lux at this point—that is why (among many other reasons) Mercury is being squeezed out.

  • avatar
    John Horner

    It is really quite amazing to see the Ford as last man standing idea we have been talking about here for a long time on the verge of coming to fruition.

    Ford has been working hard to field a competitive product lineup in every volume segment with no excuses required products. The lack of a significant luxury nameplate is a profitability hindrance, but Honda does well for itself even though Acura is a struggling brand. Heck, Lincoln probably has better long term brand prospects than Acura does.

    It looks to me like Ford is actually studying Honda’s way of doing things more so than it is Toyota’s. Ford’s advantage over Honda is that it has a much deeper product portfolio and a much better established global footprint.

    Toyota’s attempt to piece the F150’s dominance of the pickup truck market has fallen flat on its face. This means Ford maintains a powerful market-share position in what is still a highly profitable market segment.

  • avatar

    Mercury is an entry level luxury car?

    Huh. Did not know that.

  • avatar

    I think it has been said here before but could stand to be reiterated- the only reason Ford is not exploring a government-style bailout solution is because the Ford family could likely lose its controlling interest in the company.

    The reality is that they have been as furiously bailing to keep from sinking as everyone else- only in a lower profile manner.

  • avatar

    Whoa, bold and italic. That’s a first.

    I think this makes the most valid point and Ford really is the best off. I can’t wait for the real new GM. But is Chrysler going really guaranteed?

  • avatar

    Ford has said that if GM or Chrysler declare bankruptcy, then Ford will have to as well.

    I will pass on Ford stock.

  • avatar

    the only reason Ford is not exploring a government-style bailout solution is because the Ford family could likely lose its controlling interest in the company.

    That isn’t it. Ford, unlike GM and Chrysler, was generating positive operating income and breakeven operating cash flow until the 2008 crash arrived.

    In 2007, Ford generated losses because it has too much debt, not because it can’t make money on selling vehicles. Chrysler and GM had operating losses — they couldn’t make money from selling cars, even if they had no debt — so they are not in the same situation.

    It seems likely (at least to me) that GM would be heavily diluted even if there is no official bankruptcy, which makes its stock scary. In contrast, Ford could be fixed with some renegotiated loan terms and some government loan guaranties, without diluting the equity. If Ford can get past the credit crunch, it could be a modest winner.

    Ford is not in a terrific place, but it is in a far better place than GM. Ford could be in decent shape with a hit product or two; you can’t say that about the other two.

  • avatar

    Mercury is an entry level luxury car?

    No…not even close.

    Lincoln is.

  • avatar

    Ford is positioned perfectly. While GM disorganizes – I mean reorganizes, it won’t be focused on its next generation of products while it cuts and consolidates. Chrysler will be winding down. Meanwhile, Ford has its next generation of products funded and in the pipeline, its reorganization is almost complete, concessions in place etc.

    I have been buying into Ford since last year and am a big believer.

  • avatar

    Might be right…..but I have doubts as well. It all hinges on the GM cost structure once out of C11. If it is significantly better than Ford’s, how will Ford get that same cost structure without going C11? The point about the UAW extending the same they get from a GM C11 may make sense, as the UAW has traditionally held all three companies to roughly the same agreements. However, what will they do now? Will they look at Ford as the potential cash cow and end that practice? You’d hope not, but it wouldn’t be the first time the UAW would slit its own throat.

    Someone commented that Toyota stock may be a safer buy. You might be right. However, again, I’d take caution (as I would for any auto company investment). A revitalized GM and a strengthened Ford (and face it, most Dodge/Chrysler buyers will go to GM or Ford when push comes to shove) could pose a very serious threat to Toyota. Not to mention the way our government is spending, the dollar will likely continue to devalue, hurting Toyota’s profit prospects when converting to yen. And who knows what the public sentiment will be. While some may go for Ford since they didn’t go bailout, and others might shun GM for taking money, Americans always like the underdog and a feel good story. GM finally fixing itself, despite embarrassment, and Ford rising from the ashes as well could be a powerful marketing tool. Toyota wanted to be the biggest. Now they are, and they have the target on their back.

    Back to the article, it all hinges on whether UAW-GM agreement will be extended to Ford. And even beyond that, if someone (Nissan?) buys Dodge’s truck business, and the brand, maybe Dodge won’t really disappear like we think it will.

    but at $2/share, why not make a play? You can buy a lot of shares at that price.

  • avatar

    Well loyal Chrysler and GM owners will more than likely buy a Ford over a Toyota or a Honda. Them NOT taking taxpayer dollars is a HUGE selling point.

  • avatar

    I wanted a Camaro for the longest time. Now I want a Mustang. The dead cat bounce exists.

  • avatar

    I agree with PCH101 on a couple of points.

    First, buying Ford stock is speculative for several reasons. First is their survival without either diluting your shares by having to sell more as the banks have done, or second, by wiping you out in bankruptcy. But even if they survive, there’s no certainty that their cars will sell. If the Fusion in reality matches the talk, it will be a good car, but that doesn’t mean it’ll sell in sufficient volume at sufficient profit to make a meaningful contribution to their bottom line.

    Despite the downturn in the truck market, I’ve always felt that Toyota was lucky/smart to bring out the bigger Tundras when they did. They’ve established it as a legit alternative to GM and Ford. Contrasted with Nissan’s failed Titan. The Fed’s stepping up to GM’s warranty is very big for sure, but a warranty won’t be worth much if you can’t find a dealer with the lights on. By the way, does this mean the Feds will warrant the Chrysler stuff for life?

    So let’s say GM staggers on either with or without BR, and Chrysler marries up with Fiat and that Ford scrapes through for a few more months. Is all this dust in the air going to stir patriotic sentiments and improve their sales? I don’t see it on the whole. There will be MANY more dealers going dark, and this will have a huge psycho affect on people. I don’t see any significant return of customers from the imports to the D3, and it’ll just be so much safer for D3 loyalists to throw in the towel and buy import. With the workers being paid at parity, even that factor will be gone.

    I’m very pleasantly surprised at the Obama team holding the feet of all players to the fire. The problem is that this is a very dynamic and unpredictable situation. What do GM and Ford have in the way of engineering talent anymore? Unless all these laid off white collars were full time screw offs, there’ll have to be big effects. It’ll be very hard indeed to keep whatever talent remains focused on whatever products will be produced. Meanwhile, Toyota and Honda proceed ahead. I think 4-5 years down the road even a surviving GM, and possibly Ford, will be starved for product that competes with Toyota and Honda.

    As an aside, what’s Ford going to do about a diesel truck? AFAIK they’ve killed the International pact. Are they doing their own thing or just not have a diesel?

  • avatar

    Buy a Ford and be adored.

  • avatar

    The real smart buy in all this is Hyundai, though it isn’t exactly on the NYSE.

  • avatar

    This will turn out to be pretty interesting. You have to believe that GM and Chryco workers are pretty depressed at this point. Watching the federal government dismantle your livelihood and knowing that there is nothing you can do about it.

    My guess is that GM and Chryco quality is taking a nosedive and people buying anything made in 2009 are going to get a nasty surprise.

    On the other hand, Ford employees still have something to fight for. Go FORD!

  • avatar
    John Horner

    I don’t think the federal backing of warranties will do much to preserve residual values or sales volume. GM still backed Oldsmobile warranties during the Olds wind-down period. In fact, Olds gave a longer warranty than the other GM divisions during those final years. It didn’t help. Olds sales and resale values dropped through the floor.

    The federal government didn’t dismantle GM and Chrysler, the companies did that to themselves. Without government intervention, both would already be on the scrap heap.

    “As an aside, what’s Ford going to do about a diesel truck? AFAIK they’ve killed the International pact. Are they doing their own thing or just not have a diesel?”

    Ford has long been rumored to have 4.9 and 6.7 liter truck diesels being developed internally for release in 2010.

  • avatar

    Do not buy Ford stock.

    First, it is going to go down. A prepack GM CH11 and Chrysler CH7 is not going to go smoothly, no matter how much governmet funding is pumped in. Think supplier production stoppages. Think fire sales. I would wager that a GM CH11 would lead directly to a Ford CH11.

    Also, think about the loss of sales Ford will continue to experience as a result of higher gas and new carbon taxes and the continuation of the recession.

    Then factor in the leaner meaner GM that could emerge from CH11 and the market share the cash having transplants will snatch up during the turmoil.

    Also note, the D3 platform is an utter, complete, and continuing failure that will underpin the next Explorer and compete directly with the Flex, every car smaller than the D3 makes little if any profit, if not an outright loss, and the F-150, on whose shoulders the company still rests, is on a decidedly downward spiral.

  • avatar

    Don’t buy – yet. Ford is a better bet than GM or Chrysler but does not have the products to compete in a very tight market with Honda, Toyota, Suburu. Trucks aren’t going to sustain the company.

  • avatar
    Matthew Sullivan

    I bought 3000 shares of F in one of my IRAs a few months ago. As of today I am up $1500.

    But this short term gain is irrelevant. I plan to hold on to this stock for 10 to 20 years.

    95% of my stock holdings are in market index funds. I can afford to take this risk with Ford.

  • avatar
    Ole Stang

    For 2010 the new Ford diesel for the super duty is to be a “Scorpion” 6.7L 390 HP 720 ftlb torque better emissions, better economy, our diesel techs are just getting back from training on it, out this fall. It has to be more reliable than the 6.0L Navistar, right?

    All stock picks involves risk, buy Ford shares or not, here is a suggestion, only invest what you can afford to lose, treat it like gambling. Remember, nothing ventured nothing gained.

    Half of the posters on this site know alot, half know nothing. But it all makes for good reading doesn’t it.

  • avatar

    As an aside, what’s Ford going to do about a diesel truck? AFAIK they’ve killed the International pact. Are they doing their own thing or just not have a diesel?

    Ford is doing two home-grown turbodiesel V8s, a 4.4-liter and a 6.4-liter. While the 4.4 is postponed (I believe), the 6.4 (size could be wrong) is still due to replace the International motor.

    Mulally’s placed a big bet on Fiesta and Euro Focus. With these two cars especially Ford has to once and for all shake off the perception that Toyotas and Hondas are better.

  • avatar

    It has to be more reliable than the 6.0L Navistar, right?

    The 6.0 is damn near bullet proof…when built to NAVISTAR specs.

    When built to FORD specs…well…we all know what happened.

    Oh and FYI…the 4.4 diesel has been put on HOLD.

    Also note, the D3 platform is an utter, complete, and continuing failure that will underpin the next Explorer and compete directly with the Flex, every car smaller than the D3 makes little if any profit, if not an outright loss, and the F-150, on whose shoulders the company still rests, is on a decidedly downward spiral.

    Truer words have never been spoken.

  • avatar

    Ford should pick up some wicked good GM engineering talent… Should be interesting to see what Detroit looks like in 5 years.

  • avatar

    While I wouldn’t call the 4.4L home-grown as it is based on the Euro “Lion,” the 6.7L Scorpion is. Most of the work done in jolly Dearborn.

  • avatar
    Scorched Earth

    Does nobody else think that GM/Chrysler bankruptcy could have very negative effects on Ford? Not that this is scientific, but I know plenty of people who say “hell no!” to American cars just because of the tanking industry. Even with government-backed warranties, I think that GM/Chrysler CH11/7 could scare many buyers off from Ford, no matter how patriotic.

  • avatar

    So should i buy for stock now?

  • avatar

    Do you know how much cash does Ford have to pay to mazda for using their engines , platforms, trannies for each car? or you expect that mazda gives away free hardware? And if those parts have to be reimported to Us how much taxes are added? How much money stays in Germany for building Focus and how much money will Nort American unit receive for just selling it here?

  • avatar

    Is this assuming that the GOVERNMENT keeps money flowing to the parts suppliers. If a few of them go under then Ford may not be able to build enough vehicles to meet any increase in demand. Plus it sounds like there will be lots of cheap New Dodge Rams and Silverados on the market with GOVERNMENT warranties, I’d bet that would take a bite out of F150 Sales for a while which would really hurt their bottom line. I’m a huge Ford fan and think they have way better vehicles then GM or Chrysler but I dont think the next couple of years will be a boon for them. However a more competitive GM and no Chrysler will mean they can hold their MSRP longer. But I believe most of us agree that the price of new cars is already too high. Still too many questions to jump on that ship.

  • avatar

    As long as GM and Chrysler stay out of bankruptcy, it’ll be good for Ford. Once (if) they do fold into C.11, I fear that Ford will be pulled into the downturn simply by being one of the Big 3. Give them credit for trying to stay below the radar on this, but if GM and Chrysler go, so goes Detroit. The buying public will see the three of them as being in the same boat.

    Of course, if a buyer isn’t too afraid of getting work done on a car, this might be the best time to buy…even used (probably more so, as cars from the Big 3 are depreciating faster than I can type). I’m sorely being tempted by a three year old Solstice with 25k that is being sold for less than $13k…sure, it’s not a Miata…but at that price for a weekend cruiser, I’m not sure I’d care.

  • avatar

    I want Ford to succeed, but last night I stopped at the local Ford dealer to look at the 2010 Ford Fusion Sport. It was priced at $30,000…which made me wince.

    I love the way the car looks, but the bottom line is that $30,000 for a Ford family sedan will be a tough sell. I own an Accord and am very happy with it, and $30,000 for a Honda family sedan would be a tough sell for me. Let’s hope the dealers stock up on lower-level models. Ford just doesn’t have that kind of pricing power yet, even though the cars have been vastly improved.

  • avatar

    The lack of a significant luxury nameplate is a profitability hindrance, but Honda does well for itself even though Acura is a struggling brand.

    Honda’s failure to cultivate Acura is a sign of a glaring deficiency in their management. The strength of the Honda-branded products may conceal it, but it’s still a problem and a weakness that exposes them to long term degradation if their competitors can extract higher margins than they can. I wouldn’t emulate that.

    Lincoln needs a hit. It doesn’t need to be a home run, but it needs to be good enough that it can bring a competitive edge to the brand. Personally, I think that they need to start fresh and reinvent the brand; the legacy just isn’t appealing enough in order to fight to keep it.

  • avatar

    Do you know how much cash does Ford have to pay to mazda for using their engines , platforms, trannies for each car? or you expect that mazda gives away free hardware?

    Ford supplies Mazda with engines and transmissions for the most part. I believe the only exceptions are the manual transmission in the Ford Ranger and the Duratec 23 which is the Ford variant of the Mazda MZR. The Duratec 23 however, is built by Ford and not supplied by Mazda.

    In the USA at least, every V6 found in a Mazda is a Ford design that I’m aware of. I don’t beleive Mazda produces any automatic transmissions anymore.

  • avatar

    Beginning in 2004, Ford dropped the old 4-cylinder Zetec engines in favor of Mazda’s MZR design. Thus, 2005 and present Duratec 4-cylinder engines are Mazdas. This includes the 2.0 L Duratec 20 the 2.3 L Duratec 23 and the all new 2.5 L Duratec 25. The engine is currently built by Ford in Chihuahua, Mexico; Dearborn, Michigan; Valencia, Spain; Laguna, Philippines; and Nanjing, China.
    Also, 1.6,and 1.8 engines are MZR( mazda) engineered.Here we go the bitter reality!
    From transmissions Ford uses mostly ZF, Aisin, and their and Gm joint venture transmission 6F/6T70/6T75.

  • avatar

    No chance. Maybe a few bucks in it on a few days day trading (like with the Banks), but personally I wouldn’t risk it for a “serious” investment.

    Why? because I know I will never buy another ICE engined car. Period. And I am not alone. Not only that, wake up and smell the depression folks, who will be buying all these lovely new Fords when unemployment is gaining at 600K a month ?!

    If you are wondering about longer term investments, I would recommend Philips (they are just about to release an incredible low-wattage long-life LED bulb onto the USA market called the Master LED) or Gold (from places like

  • avatar

    So… are you arguing with me or agreeing with me?

  • avatar

    I think whoever can afford it should put some money into Ford on general principles if nothing else. They put everything on the line including their logo to finance their next generation of vehicles while GM and Chrysler are borrowing to keep the lights on and pay their employees, nothing for product development. Ford quality is on par with the Japanese and they have class competitive models up and down the line. If GM and Chrysler weren’t offering massive incentives with government money Ford would be doing better already. Go Ford!!!!

  • avatar

    I continue to not get statements like “The D3 platform is an utter, complete, and continuing failure.”

    It’s a large platform in a small-platform era, and the Ford version was styled poorly — both of which have exactly zero to do with its viability AS A PLATFORM. In fact, every evaluation of the Ford products based on it (Five Hundred, new Taurus, Freestyle, Taurus X, Flex) says they’re functionally pretty good products.

    I see a recent writeup on this site even blamed the D3 for being squarish. Seen the new Accord and Camry? They’re not tall-nosed just because their creators suddenly lost their eyesight. It’s called “pedestrian protection standards.” Get used to it.

  • avatar
    Martin Schwoerer

    There’s a lot of logic to your argument Ken. Not wanting to get all Rumsfeld on you though, I have to say there are too many unknown knowns as well as unknowns out there.

    How long will the recession go on? What if, as Soros says, the U.S. commercial real estate market is yet to crash? Do we really know how sick the financial system is?

    I’ll believe Ford is a buy when I see its shares moving up steadily and sustainably. In other words, when the smart money really pours in and stays in. When the 50-dma crosses over the 200-dma, for example.

  • avatar

    If I had some spare “play” money, I might buy Ford, planning to watch closely and be ready to sell at first sign of it going down. Might make some money that way.

    For the long term investor, I’d say stay away from Ford. There is no limit to the stupidity of American management. 5 years from now, if they have the money, they may buy, oh, I don’t know, failing British automakers? The Japanese and Koreans keep their eye on the ball, get base hits, and end up winning more often than not.

  • avatar

    I continue to hold Ford subordinated bonds. In my opinion, bonds are a far superior way to put money down on Ford.

    However, the risk is extreme. The primary risk is that government support for GM allows them to price below Ford and pick up market share. There are many, many truck buyers for fleets who buy on cost, and cost alone. Ford, Chevy, Ram, whatever is cheapest- the state highway department doesn’t care. And make no mistake: The F-150 is still the franchise for Ford. The volumes are still huge and will always be. Mustangs and Crown Vics are profitable but a rounding error on the F150 in a good year.

    Personally, I don’t expect to realize cash from the bonds for the next five years…but hopefully will clean up after that.

  • avatar

    trk2 : So… are you arguing with me or agreeing with me?

    He’s not sure. But you’re basically right. If the car was made in the US, the engine came from the US/MX. CX-9/CX-7/Miata/Mazda3 engines are made in Japan, where the vehicles are made. The 3.0L that went in the Mazda6 was made in Cleveland; now that it’s switched, I assume it comes from Lima. Trannies I don’t know, I don’t like trannies.

    There were points at which Ford was getting screwed though. Mazda had a set price it paid for engines, and the price didn’t increase unless it got into a different bracket. So if Ford had a $0.25 cost increase from a supplier, they taped a quarter to that engine when they shipped it to Mazda. And that’s why decisions on purchasing and engineering for the I4 are now done by Dearborn.

  • avatar

    F150 on a downward spiral?
    Get out and do some driving–The F150, especially the 09, does what trucks need to do better than any other truck in that category have ever done.

    Say that 3 times real fast…,0,3507726.story

  • avatar

    In less than a years time, Ford will be the only US based global automobile manufacturer. Chrysler will be gone (or owned by the Italians), and GM will be down to Chevy and Cadillac. This would be a good time to buy F.

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    Forget Ford, TMC is up 12 dollars in the past week.

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Recent Comments

  • Lou_BC: In this situation I’m betting that Ford did not expect the Maverick to be a runaway success.
  • lastwgn: I would expect the F250 platinum uses significantly more chips than the Maverick. If the F250 Platinum uses...
  • spookiness: I’m seriously contemplating a Maverick, but would not buy an F-150 at any cost. People...
  • FreedMike: Bingo
  • Lou_BC: @eggsalad – Eggsactly.

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