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Ford re-hires 1,000 workers, says it can make it without a merger

From an industrial standpoint, few companies symbolize the United States' decade of descent more aptly than Ford.

Ford. The mere name conjures up images of deeply-flawed auto market assumptions, an inability to cope with intense foreign auto manufacturer competition, inertia, and an inability to identify what's considered 'cool' among young adults.

As an example: how many young professionals do you know who want to 'run out and buy a Ford today?' These are the main reasons Ford's (NYSE: F) shares have plunged to about $2 per share. Its market cap is down to about $4.55 billion. In 2000, Ford's shares traded above $30.

Ford: it can't get any worse

Well, to paraphrase a song by The Beatles, Ford's stakeholders, including parties who are sitting on large blocs of stock, 'have to believe it's getting better, because it can't get any worse.'

Ford said it will re-hire 1,000 laid-off workers to assemble the company's most important product, the F-150 pickup, The New York Times reported Friday, with the company adding that it expects consumer demand to increase for the product. As a result, Ford says it doesn't need to merge with anyone to survive.



Further, the company said it is in the midst of a new product blitz that will replace 40% of its production with fresh models by next year, The Times reported. Stock Analyst C. Leonard Bauer said the model launches and improvements can not occur soon enough.

"Ford's sales will decline by double digits in 2009, due to the recession, and tighter credit, which will generate another year of large losses, after a very difficult 2008," Bauer said. "Absent a major private equity investment, Ford most likely will need a cash infusion from the U.S. Treasury or Congress to get through the next 12-18 months." Bauer added that he does not have a rating on or own shares in any auto manufacturer.

Can Ford survive, in Bauer's view? "If one of its new fuel-efficient cars is a standout, and if a bailout package is approved, Ford has about a 50-50 chance of surviving," Bauer said.

Auto Sector Analysis: A stern, but realistic, assessment from analyst Bauer. The view from here argues that the new U.S. Congress should approve a recovery / assistance package for all U.S. auto manufacturers, as part of a national industrialization policy.
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Last updated: November 25, 2009: 11:57 PM

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