Alan Mulally has not been the CEO of Ford (NYSE: F) for very long, but he is already asking for a helping hand. He wants the Fed to help stimulate the economy. Ford is now facing the fact that it cannot cut enough costs to keep the company afloat if mortgage problems and oil prices keep consumers out of its showrooms.
Mulally told the FT that economic and credit conditions were a "big headwind" .That is no lie.
Ford has already posted double digit drops in US units sales most months this year. Its domestic market share for the year may be no better than 16% and if the economy gets really bad Ford will have a smaller piece of a shrinking pie.
The car company could also face falling interest in it Jaguar and Rover units. A troubled auto industry will make unloading those even harder. Ford was counting on the money to improve its balance sheet.
Over at the UAW headquarters, the brass must be sweating. Ford is asking for concessions on wages, pension, and health benefits. An improving P&L in North American would have made it easier for the union to hold the line on giving up more. It has already lost hundreds of thousand of members due to the flagging fortunes of the Big Three.
Without big help, the Ford turnaround may die an early death.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
8-24-2007 @ 10:48AM
chetalexander said...
Did you ever notice that when things are great big business screams when the goverment imposes certain restrictions to protect consumers. But when things go sour,usually because they screwed up,they want uncle sam and the taxpayer to intervene and bail them out of the problems they created. Of course nobody saw the ASIAN automobile manufractures as a threat way back in the 70's.
8-24-2007 @ 4:40PM
jerry said...
Maybe if FORD would stop supporting the homosexual agenda it's sales would improve. there's only so many homo's out there to buy there product
8-27-2007 @ 2:25PM
lbucci said...
Jerry, the homosexual issue is not why Ford is in trouble. Everyone's money is green, including yours. The Ford Motor Company's management is to blame and I will suffer personally as a result. My husband retired in 2002 after over 30 years of service to Ford Motor Company. When he loses his pension, living in an area like we do, he already cannot find ANY employment, let alone suitable employment, even though he is college degreed. He has tried hard to bridge that gap that appears to be widening. Forget selling our home. Our area's real estate is very depressed right now. Do you have any other solutions out there, or just criticism for those whose lifestyles are different from yours?
9-01-2007 @ 6:27AM
mark said...
ford is not a supporter of the "homosexual agenda". the person responsible for the past support was FIRED over 2 years ago.