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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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Reader Comments (Page 3 of 3)
11-01-2008 @ 9:34AM
Ilene said...
I love my red Mustang convertible. May Ford be able to continue making them.
11-03-2008 @ 8:38PM
Brian S. said...
I agree with Steve March, the products are great and getting better all the time. 3 of the 5 cars I've owned have been Fords and those 3 were all pretty great (small car, small pickup, and now midsize SUV / crossover).
In addition my 2008 Ford Edge the best vehicle I've ever owned bar none. originally I was worried about mileage, but on mostly highway with careful driving using cruise control this past weekend I got about 26.5 MPG (rated at 24 highway). made me very, very happy when I was already happy to begin with!
Ford will turn around, and the sooner they keep bringing the new products the better. the new F-150 and Fiesta are the next big hits in the lineup, and Lincoln is making a respectable comeback.
11-05-2008 @ 5:32PM
HeyOCFordFan said...
Wait and see, as gas prices begin to stabilize at around $2.50 a gallon, you're going to see everyone heading back to the showrooms to get one of those great F-150 pick up and Expedition SUV's. This should be a lesson to everyone to buy american brands and not to get sucked in on this enviromental stuff. We have over 2 trillion barrels of oil in the US. We just have to go get it. That's enough to last for hundreds of years. US car makers aren't going anywhere. Go buy a Ford!
11-06-2008 @ 5:15PM
Richard Russell said...
In the long run a FORD can't be beat for long term service....Been driving on over 60 years!! And it American to the bone!!!
11-08-2008 @ 8:43PM
Wayne K said...
I have driven Ford vehicals for 30 years, cars, suv's and f series pickups, my lastest is a 2008 f450. Quality, reliability and great dealer service. I also drive toyota but their trucks are still a toy compared to a f450
11-12-2008 @ 1:55PM
Alan said...
The only way the big three will survive is to bust the UAW union period.
They got too greedy.
11-17-2008 @ 11:59AM
Jennifer said...
Ford is crazy! They have FANTASTIC cars available abroad that I would be thrilled to buy, but I am not allowed. I want a diesel Fiesta that gets a whopping 70 miles per gallon. They need to look at their lines abroad and bring them here.