Ford Motor Company (NYSE: F), while suffering through the largest auto industry malaise in generations, won't be closing legions of dealerships like General Motors Corporation (NYSE: GM) or Chrysler. In fact, Ford indicated that it will benefit from the closure of 2,000 auto showrooms from its domestic competitors -- one that has already filed for bankruptcy and another that is expected to shortly.

Alan Mulally, the CEO of Ford Motor Company (NYSE: F), voiced an unequivocally gloomy opinion about the future of the auto industry at the Paris Auto Show. After reporting a 34% plunge in auto sales for the month of August, Mulally warned reporters that "2009 is not going to be better than 2010. We won't see a recovery until 2010." He added, "The [economic] downturn is longer and deeper than we foresaw a year ago."

The auto exec added that it now expects the Russian market to stagnate next year; previously, Russia was the fastest-growing European market for Ford. Mulally sighed, "The problems of subprime and credit crunch are now all over the world." However, he clarified that the automaker's European production plants have the "flexibility" to withstand the expected downturn, and Ford generally has "the liquidity to deal with it."

As proof of that sufficient liquidity, Ford on Wednesday repaid $1.5 billion in debt as part of a routine transaction. Morgan Keegan analyst Pete Hastings told the Detroit Free Press, "It means they paid with cash," rather than drawing on a credit line. Hastings noted, "In a normal credit market, this wouldn't even merit a mention. But it isn't, so we're trying to interpret every little move."

Despite Ford's apparently stable cash position, investors today seem to be erring on the side of caution. The stock is down about 4% this afternoon to trade at $4.37. Today's plunge extends the equity's slump beneath staunch resistance from its 10-week and 20-week moving averages.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

When you sell something as a "limited edition," you better mean it. But it turns out that a recent limited edition of the Ford (NYSE: F) Mustang was not that limited after all. And now a group of angry Mustang buyers are taking legal action against the troubled automaker.

Ford claimed that only 100 of the 2007 Roush Stage 3 BlackJack Mustangs would be made in 2007, and fans snatched them up as they went on sale. The car, which cost $59,000, was continued in 2008 and another 100 were made by Ford and Roush Performance Products. That fact didn't sit well with those who had purchased the 2007 model. (I remember the Chevy Camaro and Ford Mustang fanatics of the 70s and 80s -- and fans of both can be quite intense and still dote on their treasured vehicles to this day.)

in the end, though, "limited" doesn't really mean anything -- the number can refer to 10 or 1,000. The lawsuit states that the value of each of the 2007 Mustangs was harmed by the additional 100 cars made in 2008. But is this what true fans are really worried about? I doubt it -- it's hard to think of these vehicles as long-term investments. Their attraction comes more from being something unique. Perhaps it's a bit of both. The lawsuit, though, is claiming more than $12 million in damages. Doing the math, 100 vehicles times $59,000 equals just over $5.9 million. Multiply that by two and you get something close to $12 million. Apparently, the entire value of all 200 Mustangs from 2007 and 2008 are at issue here.

Could it really be just about money? Or is it more a matter of bruised egos? Either way, it could be expensive for Ford, which can't afford to lose another penny.

Shares of Ford Motor Co. (NYSE: F) are soaring today after the automaker reported the best kind of earnings -- an unexpected profit.

The automaker earned $100 million, or 5 cents a share, compared with a loss of $282 million, or 15 cents, a year earlier. Wall Street had expected the company to lose money. Revenue was $43.5 billion, up slightly from a year earlier. Excluding discontinued operations and one-time items, profit was $525 million, or 20 cents.

"The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America," said CEO Alan Mulally in the earnings release. "We believe this is an indication that our
efforts to leverage Ford's global assets across the world will bear fruit."

Cost cutting certainly helped. The company's North American Automotive business had a pre-tax loss of $45 million, down from $613 million a year earlier, as it slashed $1.2 billion in costs. But that's still not enough, and the company knows it. More layoffs are looming, according to the Detroit Free Press.

MAJOR PAPERS:

• The Wall Street Journal reported that Ford Motor Company (NYSE: F) CEO Alan Mulally isn't done cost-cutting. According to people close to the situation, Mulally is considering more job cuts, selling its Volvo brand and closing the troubled Mercury brand.
• BHP Billiton Limited (NYSE: BHP) CEO Marius Kloppers strongly criticized Rio Tinto Plc (NYSE: RTP) and its CEO yesterday, the Financial Times reported. BHP Billiton has outperformed Rio Tinto in several areas, including share price appreciation and EPS growth, said Kloppers, adding, "On every metric I can envisage they [Rio] have been beaten."

OTHER PAPERS:

• According to the Economic Times, AT&T Inc (NYSE: T) is reportedly in preliminary talks with Malaysia's Maxis Communications about buying its 74% stake in Indian cellular phone company Aircel, sources said.
• The United Auto Workers union has rejected several "generous" benefit and wage proposals, according to American Axle & Manufacturing Holdings Inc (NYSE: AXL). In a statement yesterday, the Detroit News reported that American Axle said while tentative agreements had been reached on several issues, the UAW "repeatedly rejected" other proposals that were "considerably higher than the market rate."

MAJOR PAPERS:

• General Motors Corporation (NYSE: GM) and Ford Motor Company (NYSE: F) want to export more of their vehicles around the globe, and are getting a lift from new labor contracts and the weak dollar, which they believe will translate to bigger profits, the Wall Street Journal reported.
• The Wall Street Journal also reported that former Fed chairman Alan Greenspan has been criticized for how he handled the economy before retiring two years ago, and is under attack for policies that many say started the current financial crisis.

OTHER PAPERS:

• According to a person with knowledge of the matter, the Seattle Post-Intelligencer reported that The Boeing Company (NYSE: BA) is likely to announce a new delay of at least six more month for the 787 Dreamliner this week.

WEB SITES:

• According to 'numerous sources,' Housing Wire reported that Washington Mutual Incorporated (NYSE: WM) may have decided to exit wholesale mortgage origination.

Monday, December 31

• PDUFA date for Pharmacyclics (NASDAQ: PCYC)' Xcytrin for treatment of non-small cell lung cancer patients with brain metastases.

Tuesday, January 1

• Markets closed for New Year's holiday.

Wednesday, January 2

• PDUFA date for SkyePharmaceuticals (OTC: SKYEY) and Sciele Pharmaceuticals (NASDAQ: SCRX) Sular Formulation for Hypertension. The FDA extended the PDUFA Date from November 2, 2007.

Thursday, January 3

• Ford Motor Company (NYSE: F) to report monthly sales at 1pm
• General Motors (NYSE: GM) to report monthly sales at 2pm.
• AngioDynamics (NASDAQ: ANGO) to report Q2 earnings; conference call at 4:30pm.

Friday, January 4

• Millennium Pharmaceuticals (NASDAQ: MLNM) to provide guidance at 8am.
• Checkpoint Systems (NYSE: CKP) to provide guidance at 10am.
• Federal Reserve Govenor Kohn to provide keynote speech at the AEA Annual Meeting in New Orleans at 11:45am.

The Ford Motor Company (NYSE: F) recently announced that it has decided to keep Volvo, despite Ford's current plan to focus on its core American brands. Ford's other two foreign brands, Land Rover and Jaguar, will be sold and should be out of Ford's hands by early 2008.

An analyst quoted in The New York Times stated that Ford's plan to keep Volvo was not a positive development. Brian Johnson, of Lehman Brothers, speculated that Ford was unable to find a buyer for Volvo, or at least one who would pay a good price. Ford has owned Volvo for eight years, paying $6.45 billion for it in 1999. Although Ford does not provide detailed financial reports for Volvo, it did state that Volvo lost money in the last quarter.

Just when it looked like things might be going right at Ford (NYSE: F), it may be going wrong again. The company, which reported a better third quarter than Wall Street expected, said that a bad U.S. economy might drive sales down and force the company to cut production on some vehicles. The No. 2 car maker has faced double digit sales declines in most of its monthly reports this year.

In statements picked up by Reuters, Ford CEO Alan Mulally said, "The business environment has clearly gotten tougher. It's gotten tougher and we want to be ready to move if we need to."

The comments cannot hearten the UAW, which just gave Ford a nifty new contract. Lower production and idling of plants generally means layoffs. The UAW may have won a big battle, but part of the war now still appears to be ahead.

Ford has reached an interesting tipping point. If it is going to compete with other large car companies in the U.S., it needs to have a full line of cars and light trucks. It also needs to have the capacity to increase production when the markets begin to improve. Ford may cut more workers, layoff more managers, and stop production at more facilities. But at some point, it is only half a car company by size. And that means an end to Ford as it has been known for almost 100 years.

Douglas A. McIntyre is an editor at 247wallst.com.

As the saying goes, if you can't beat 'em, join 'em -- or at least hire 'em to join you. Ford Motor Co. (NYSE: F) announced late yesterday that it has hired James D. Farley as its new marketing chief. Until recently, Farley was a VP at Toyota Motor Corp. (NYSE: TM) and general manager of Toyota's luxury Lexus division. Before heading Lexus, he helped launch Scion, Toyota's successful new brand aimed at youthful buyers.

The Detroit News, which covers the car industry like a hungry dog on a juicy ham bone, has this to say: "It's hard to overstate the symbolism of Farley's appointment by Ford. That a rising Toyota star, the head of Lexus and a founder of its Scion youth brand would bolt the Japanese juggernaut for the struggling Blue Oval is a testament to Mulally's leadership, the strength of Ford's current lineup, the promise of its future products and the upside in it all."

Ford is not the first American car company to raid the world's leading auto producer. A month ago, Chrysler snagged James Press, the top-ranking Toyota executive in North America who joined the Chrysler Group as Vice Chairman and President. And it hired Deborah Wahl Meyer, the former head of marketing for Lexus, to be its chief marketing officer.

It's hard to see this as anything but good for Ford and the American car makers. Decades ago, foreign producers visited Detroit to learn how the world leaders made cars. Now the playing field is much more even, with Toyota in particular giving Ford and General Motors (NYSE: GM) a run for the money. In the recent hiring of Toyota executives, we can see that the American companies have finally admitted that they are no longer the best at what they do, and that they are willing to learn from their competitors. With any luck, the end result will be stronger American cars that can better compete with already excellent products coming from overseas.

The newly created Do-Over and Do-Again (or Do-Do) Award was recently bestowed on the Ford Motor Company's (NYSE: F) Taurus sedan and Taurus X wagon. Christopher Jensen, who reviews cars for The New York Times, invented the not-quite-complimentary award just for the Taurus, in recognition of Ford's effort to recover from the missteps the company made introducing the Ford 500 in 2005. According to Jensen, "The Do-Do recognizes the automaker who tries the hardest to compensate for not having taken full advantage of the opportunity when originally introducing a vehicle."

Jensen has some nice things to say about the new Taurus, which is really a revised 500. It's roomy, comfortable, handles nicely and has lots of storage space. The problem is that Ford did not offer the current version of the car right off the bat. Jensen argues that if the 2008 Taurus had been the 2005 500, it might have been a great and popular car. But Ford blew it, rushing an inferior version to market, then paying the price with lackluster sales and now this confusing new/old name. In the meantime, competitors including Toyota Motor Corporation (NYSE: TM), Honda Motor Ltd. (NYSE: HMC) and General Motors Corporation (NYSE: GM) have produced new generation sedans that are at least as good if not better.

As Michael Fowlkes noted earlier this week, Ford saw a 21% decline in U.S. sales in September. The Taurus did even worse, selling 30% fewer cars than the 500 did a year ago. This is a shame, since by all reports the new Taurus is a solid car. The engineers did a good job designing it, and the auto workers do good work building it. The problem, I suspect, lies in poor planning at the corporate level. Years of neglecting cars in favor of SUVs is still hurting the American automakers, and perhaps Ford worst of all.

Ford Motor Company (NYSE: F) is currently taking bids on parts of its Premier Automotive Group, which includes Jaguar, Land Rover and Volvo. (Another Premier brand, Aston Martin, was sold to investors in March for roughly $900 million.) There has been speculation that the Indian automaker Tata Motors (NYSE: TTM) may be interested in the two British luxury brands, but so far Ford has denied that it is selling Volvo. Ford's denials have been fairly weak, however, and it stands to reason that given Ford's rather desperate need for cash, it would sell the Swedish car maker -- the only profitable part of the Premier Automotive Group -- if the price were right.

It's pretty clear that Ford is in trouble, having mortgaged its plants and property -- and even its hallowed name -- to raise cash to support current operations. As Kevin Shult wrote last week, Ford is a symbol of the hard times facing American automakers, which are stuck offering large, heavy, inefficient vehicles to consumers who now want something better. There's plenty of blame to go around for the problems in Detroit. While many analysts focus on labor costs, especially retiree health care, I would argue that poor management, weak investment, and mediocre design and engineering are at least as important. And that's where Volvo can play an important role in helping Ford recover.

Monday July 2

• CRH PLC (NYSE: CRH) to hold conference call to give a trading update statement.
• UAP Holding Corp (NASDAQ: UAPH) to report Q1 earnings; conference call at 5pm.

Tuesday July 3

• U.S. markets close at 1pm for July 4th holiday.
• Ford Motor Company (NYSE: F) to release June sales results at 1pm.
• General Motors Corporation (NYSE: GM) to release June sales results at 2pm.

Wednesday July 4

• U.S. markets closed for July 4th holiday.

Thursday July 5

• Healthways Inc (NASDAQ: HWAY) to report Q3 earnings; conference call at 5pm.

Friday July 6

• Laidlaw International (NYSE: LI) to report Q3 earnings; conference call at 10am.

From initial appearances, new Ford Motor Company (NYSE: F) CEO Alan Mulally is making great progress in turning around the fledgling automaker from a series of huge losses (quarters and years) into turning out vehicles customers actually want and are buying in decent numbers. The huge SUV and gas-guzzling full-size car that remained specialties of Ford for so long are being replaced by the Fusion mid-size/compact and smaller crossover SUVs like the Edge, according to recent monthly sales results. Mulally said recently that his "Way Forward" plan on revitalizing Ford is on track, if not slightly ahead of schedule. For Ford investors looking for good Ford news in the face of recent disastrous quarters and fiscal years, this is music to the ears.

Although Ford saw a 12% sales decline from January to May of this year, the automaker has made many right moves to correct the ship and get its product portfolio more competitive to Toyota Motor Corporation (ADR) (NYSE: TM), Honda Motor Co., LTD. (NYSE: HMC) and even Nissan Motor Co., LTD. (NASDAQ: NSANY). Mulally's "Way Forward" plan to get Ford back on track relies partly on product planning, getting unions to cooperate with business needs (always a nightmare), and competing with the newest #1 seller on the planet, Toyota. Neat job if you can get it, but as he said recently, he's making progress.

I'm not sure that changing the name of the Ford Five Hundred luxury sedan back to the venerable "Taurus" name will do anything but give the automaker good press, but who knows. At one point, the Taurus was the most popular sedan nameplate in the country, even selling more than the Toyota Camry (the Taurus did this for years). Mulally says that Ford is on plan with regards to the company's turnaround, and he's probably right about that. Sometime in 2009 Ford should be profitable again, according to Mulally. But, until then, there's quite a bit of hard work left to be done.