Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable for Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

Continue reading If Ford wants to sell Volvo, who would buy it?

If Ford wants to sell Volvo, who would buy it? originally appeared on BloggingStocks on Tue, 20 May 2008 14:19:00 EST. Please see our terms for use of feeds.

Reading the newspaper, there are times when I wonder if certain companies are actually trying to fail. Recently, the Ford Motor Company (NYSE: F) announced plans to sell its Jaguar and Land Rover brands to Tata, an Indian car company. While Ford paid $5.2 billion for the two companies ($2.5 billion for Jaguar in 1989 and $2.7 billion for Land Rover in 2000), it has sold them for a combined $1.7 billion, less than a third of the purchase price.

I don't really have anything against Ford. I once owned a Mustang convertible, which was a lot of fun to drive. Better yet, it was not that hard to work on, which proved helpful given its tendency toward constant technical problems. However, Ford's corporate governance has never been all that hot. I'm sure that there's a perfectly reasonable explanation for the fact that Ford hasn't been able to make money off of either of these impressive brands, but I wonder why the company spent money picking up luxury marques when it was on somewhat shaky footing. Now that they've gotten rid of these two great companies, I hope that Ford will focus on the problems with its main car lines and the fact that they are gas-guzzling, poorly-designed, and prone to technical problems.

Of course, if that fails, they can always try buying Fiat and then reselling it to an Ethiopian manufacturer.

Ford sells off premium brands originally appeared on BloggingStocks on Thu, 27 Mar 2008 17:47:00 EST. Please see our terms for use of feeds.

It was reported long ago that Ford Motor (NYSE: F) was shopping its Jaguar and Land Rover brands. Today it finally announced it has closed the deal to sell these premier British brands to Tata Motors (NYSE: TTM) of India for $2.3 billion. Ford, which has been losing money, found its share price way down, closing yesterday at $5.96 (now up a few cents in premarket trading) and was in need of a cash infusion.

Tata Motors, having just introduced a low-end $2,500 car to the Indian market, is now filling out the upper end of the spectrum by bringing these two well known British brands to a country with a tradition and heritage long ago saturated with British "imperialist" remnants like cricket and tea time. If Jaguar and Land Rover are to be revitalized, then Tata Motors probably has a better chance of success than most.

Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. Nine months ago I posted Chasing Value: Tata Motors LTD - patience, patience, GOT IT! and now Tata has got it! What it hopes to do with these brands is gain some international credibility, based on a solid Indian foundation.

Tata's stock closed yesterday at $17.36, up slightly on the rumors. It is about midway between its 52-week low of $14.71 and its high or $21.30. This deal could send both companies forward humming a new tune. I would even speculate more wildly just for fun that in this world of expanding markets, integrated economies and corporate consolidation, Ford and Tata Motors could one day find reason to unite.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: We own shares in TTM.

Tata Motors pays Ford $2.3 billion for Jaguar and Land Rover originally appeared on BloggingStocks on Wed, 26 Mar 2008 09:57:00 EST. Please see our terms for use of feeds.

After sale of Jaguar and Land Rover, is Ford worth a look? originally appeared on BloggingStocks on Tue, 25 Mar 2008 16:25:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that private loans under the Federal Family Education Loan, or FEEL, program have begun to give way to the federal direct loan program, as private lenders run into subsidy cuts and problems raising capital. To date about 60 colleges and universities have made the switch.
• Carl Icahn, a 6.3% Motorola Inc (NYSE: MOT) shareholder, has sued the company to get board of director documents, turning away offers of two board seats, the Wall Street Journal reported. Icahn wants information about the company's unprofitable handset business.
• Ford Motor Company (NYSE: F) is expected Wednesday to announce an agreement to sell its Jaguar and Land Rover units to India's Tata Motors Limited (NYSE: TTM) for about $2B, the Financial Times reported.

• According to the Business Review, New York State Senator Charles Schumer is planning to 'reveal details' of a conversation he had with the CEO of Advanced Micro Devices Inc (NYSE: AMD) on March 21 about the company's plans to build a $3.2B computer chip plant in Saratoga County.

Newspaper wrap-up: Schumer to speak about conversation with AMD CEO originally appeared on BloggingStocks on Tue, 25 Mar 2008 08:05:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that the FBI has opened criminal inquiries as part of an investigation over subprime mortgage issues. The probe into 14 companies will focus on accounting fraud, insider trading and securitization of loans.
• The Wall Street Journal also reported that Merck and Co Inc's (NYSE: MRK) osteoporosis treatment Fosamax is facing increasing scrutiny and lawsuits, as a growing number of patients allege the drug causes a condition called ONJ.
• According to a Federal judge, antitrust supervision of Microsoft Corporation (NASDAQ: MSFT) should be extended for two years longer than originally planned, until November 2009, the Financial Times said. The supervision was imposed as part of its landmark settlement in 2002, when Microsoft was accused of failing to produce an adequate licensing arrangement for certain protocols essential for rivals to work their own products through the Windows operating system.

• The Economic Times reported that Ford Motor Company (NYSE: F) has decided not to retain any stakes in its Jaguar and Land Rover divisions after selling them to India's Tata Motors Limited (NYSE: TTM), according to sources.

Newspaper wrap-up: com: Ford may not hold onto any portions of Jaguar, Land Rover originally appeared on BloggingStocks on Wed, 30 Jan 2008 08:00:00 EST. Please see our terms for use of feeds.

Ford spent a combined $5.2 billion for Jaguar and and Land Rover when it first took over the units.

Continue reading Ford (F) names Tata as top bidder for Jaguar

Ford (F) names Tata as top bidder for Jaguar originally appeared on BloggingStocks on Thu, 03 Jan 2008 12:30:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal's "Heard on the Street" reported that analysts believe investors should take a look at some Indian pharmaceutical stocks, including two of the subcontinent's biggest generics makers, Dr. Reddy's Laboratories Limited (NYSE: RDY) and Cipla Ltd.
• According to the Wall Street Journal's "Heard in Asia," shares of India's three largest tech and outsourcing companies by sales, Infosys Technologies Limited (NASDAQ: INFY), Tata Consultancy Services and Wipro Limited (NYSE: WIT), may be worth a look by investors despite some near-term volatility.

• David Letterman is seeking his own deal with the Writers Guild of America which would allow his show to return to air on CBS Corporation's (NYSE: CBS) CBS station in early January even if the strike is continuing, the New York Times reported.
• According to the UK Times, Ford Motor Company (NYSE: F) is expected to name Tata as the preferred bidder for its Jaguar and Land Rover units.

Newspaper wrap-up: Time to take a look at Indian pharmaceuticals? originally appeared on BloggingStocks on Mon, 17 Dec 2007 08:00:00 EST. Please see our terms for use of feeds.

Finding a buyer for Jaguar and Land Rover has taken a long time. But, it appears that Indian car company Tata now has the poll position to buy them from Ford Motor Co. (NYSE: F). The price will be about $2 billion. According to The Sunday Times, "sources close to the negotiations say an announcement could come in the next fortnight, bringing to an end a six-month auction."

Even with its need to fund a new health care pool for the UAW, it is not clear that the move is a good idea.

Ford is being hurt by a falling market share in the U.S., and the total car market here is also falling. Higher fuel prices and a damaged housing market are likely to take a further toll on the auto industry in 2008.

In Jaguar and Rover, Ford has two premium, global brands. As a strong middle class emerges in China and Russia, these are the kind of cars that are likely to sell well. Ford only has modest operations in these countries.

Selling the two brands may end up being very short-sighted.

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

Tata becomes frontrunner to buy Jag and Rover from Ford (F) originally appeared on BloggingStocks on Sun, 16 Dec 2007 16:10:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• As dozens of patents on drugs expire over the next five years, generics will replace about $70B of drug company sales, reported the Wall Street Journal. Those hard hit will include Pfizer Inc (NYSE: PFE), whose $13B sales cholesterol lowering Lipitor will face stiff generic competition, and Merck & Co Inc (NYSE: MRK), which will see generics battle against its three best sellers.
• Hopes for a $100B "super fund" to help ease a worldwide credit crisis, and the brainchild of Citigroup Incorporated (NYSE: C), Bank of America Corporation (NYSE: BAC), and JP Morgan Chase & Co (NYSE: JPM), has failed to attract significant interest parties to make it a reality, according to the Wall Street Journal.
• According to sources and reported by the FT's dealReporter, despite ongoing litigation, a consortium led by JC Flowers remains interested in taking SLM Corporation (NYSE: SLM).

• The Economic Times reported that three bidders for Ford Motor Company's (NYSE: F) Jaguar and Land Rover units, Tata Motors, M&M and One Equity, submitted their final "competitive" bids Wednesday. The bids are rumored to be in the range of $1.5B-$2B, but may undergo revisions at some point.

Newspaper wrap-up: Ford receives final bids for Land Rover, Jaguar originally appeared on BloggingStocks on Thu, 06 Dec 2007 08:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Achilles heel of discount broker E*Trade Financial Corporation (NASDAQ: ETFC) may be its lesser known mortgage business, whose value is now at the center of debate regarded its sale price, reported the Wall Street Journal.
• According to a report prepared for European medicines authority, the Financial Times reported that Roche Holding Ltd (OTC: RHHBY) is responsible for impurities that caused an international recall of its HIV drug.
• The FT also reported that the United Kingdom's Virgin Group was confirmed as the preferred bidder for British bank Northern Rock, as the bank said it wanted to hold discussions with Virgin "on an accelerated basis."

• Sources close to the matter said that Ford Motor Company (NYSE: F) may put the brakes on overseas plans in many markets including India, South Africa and China on hold until it completes the sale of its Jaguar and Land Rover units, according to the Economic Times.
• China is expected to unveil more than 20 regulations on foreign mergers and acquisitions, or M&A, according to a senior Chinese legislator, Xinhua reported.

Newspaper wrap-up: Value of E*Trade's mortgage business up for debate originally appeared on BloggingStocks on Mon, 26 Nov 2007 08:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• It was revealed yesterday that Terra Firma is among the potential bidders for Ford Motor Company's (NYSE: F) Jaguar and Land Rover brands, reported the Financial Times.
• There is a 40% to 45% risk that a recession will be triggered by the housing market downturn in the U.S., the CEO of Freddie Mac (NYSE: FRE) warned, the Financial Times reported.

• From BusinessWeek's "Inside Wall Street" column:
  
• Investors looking for fast growth in the $110 billion business-enterprise telecom market are betting on Time Warner Telecom (NASDAQ: TWTC), which offers broadband connections for data, high-speed Web access, local voice, and long-distance service.
• Plum Creek Timber (NYSE: PCL) is flying high despite the housing slump and market decline driven by the subprime mortgage crisis.
• Universal Electronics Inc (NASDAQ: UEIC), which makes the remote controls for TVs and other appliances, has caught the Street's eye.

• Unstrung.com reported that Cisco Systems Inc (NASDAQ: CSCO) is close to buying a WiMax base station company, according to sources, and one possible target is Alvarion (NASDAQ: ALVR).
• Yahoo! (NASDAQ: YHOO) is reportedly going to reduce the amount of money and effort it spends on premium services related to music, games, TV, and movies, reported TechCrunch.com.

Newspaper wrap-up: Terra Firma interested in Jaguar and Land Rover originally appeared on BloggingStocks on Fri, 28 Sep 2007 09:20:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Chinese finance minister Jin Renqing unexpectedly quit, just ahead of an important Communist Party meeting this October, reported the Wall Street Journal.
• Coors Brewing, part of Molson Coors Brewing Company (NYSE: TAP), will introduce "above-premium beers," its beer wholesalers were recently informed, according to the Wall Street Journal.
• Sony Corporation's (NYSE: SNE) Sony Ericsson is expanding into fast growing emerging markets such as India and Latin America, and is developing low cost models for those areas, reported the Wall Street Journal.
• Indian carmaker Mahindra & Mahindra is conducting due diligence on Ford Motor Company (NYSE: F) divisions Jaguar and Land Rover, which are both up for sale, but the Indian company is more interested in Land Rover, reported the Financial Times, citing sources.

• According to the Telegraph, Goldman Sachs Group (NYSE: GS) dealmaker Alain Carrier is set to leave the company to take a job with the Canadian government.
• The Globe and Mail reported that General Motors Corporation (NYSE: GM) will eliminate 1,000 jobs at a Canadian truck plant in Ontario.

Newspaper wrap-up: Chinese finance minister quits originally appeared on BloggingStocks on Thu, 30 Aug 2007 09:15:00 EST. Please see our terms for use of feeds.

Ford's (F) Jaguar, Land Rover brands attract bidders originally appeared on BloggingStocks on Mon, 27 Aug 2007 09:31:00 EST. Please see our terms for use of feeds.

Boards of Ford's (F) Land Rover and Jaguar brands lining up bidders originally appeared on BloggingStocks on Fri, 17 Aug 2007 15:09:00 EST. Please see our terms for use of feeds.

Here is some background for Brian White's liveblogging of Ford's (NYSE: F) second quarter earning results:

Ford surprised the market by announcing black ink for the second quarter of 2007, with net income of $750 million, or $0.31 EPS on $44 billion revenue, which was a 6% increase over 2006 2nd quarter.

Unfortunately the increase in revenue was primarily due to currency exchange, mix and net pricing improvements -- sales volume actually was lower than 2006. The profit was due in part to cost reductions of $600 million, including the elimination of 6,400 jobs.

Backing out special items, mostly the sale of Aston Martin and deferred gains on certain hedges at Jaguar and Land Rover, and profits finished at $258 million, or $0.13 EPS. The paltry earnings won't do much to excite a market convinced that the company has taken only the first few initial steps in their climb back to economic viability.

Continue reading A closer look at Ford's 2nd quarter earnings

A closer look at Ford's 2nd quarter earnings originally appeared on BloggingStocks on Thu, 26 Jul 2007 11:41:00 EST. Please see our terms for use of feeds.

Continue reading Why Ford should keep Volvo

Why Ford should keep Volvo originally appeared on BloggingStocks on Thu, 26 Jul 2007 10:45:00 EST. Please see our terms for use of feeds.

Ford Motor Co. (NYSE:F) actually made money in the second quarter, shocking Wall Street which had expected a loss. The automaker also confirmed media reports that may sell its Jaguar and Land Rover businesses.

The company made $750 million, or 31 cents per share, compared with a loss of $317 million, or 17 cents, a year earlier, its first profitable quarter in more than two years. Revenue rose 6% to $44.2 million. Wall Street had expected Ford to lose 35 cents on revenue of $37.5 billion. Click here for the earnings release, here for the Wall Street Journal story, and here for the Bloomberg News story.

Flash: Ford earnings surprise Wall Street in a good way originally appeared on BloggingStocks on Thu, 26 Jul 2007 08:45:00 EST. Please see our terms for use of feeds.

Continue reading Ford, a symbol of America's failing auto industry

Ford, a symbol of America's failing auto industry originally appeared on BloggingStocks on Wed, 18 Jul 2007 15:55:00 EST. Please see our terms for use of feeds.

It is an odd company that says its turnaround is "on track" when market share in its home company and largest market is falling like a rock. But, so say Ford Motor Co. (NYSE: F) management.

"The closures and the employment reductions to size the capacity to the real demand -- we're a little bit ahead," Ford's CEO told reporters. "But generally (we're) on plan."

Ford has a couple of other cards in the hole. It will probably improve its balance sheet by several billion if it can sell its Jaguar and Land Rover units. And, upcoming UAW contract negotiations may give Ford the chance to beg off pension and benefits cost cuts. But, the point will come when Ford's recovery is measured by a need to spend more money to help improve production for rising sales.

But, a turnaround is not a turnaround without some stability in revenue, and Ford has been unable to show that. Its most profitable vehicles are its SUVs and pick-ups, and the sales of those are running down by double digits most months.

Measuring progress by cost cutting is generally a Faustian bargain. The Devil eventually comes for the whole company.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Ford's view of "on target" originally appeared on BloggingStocks on Sun, 24 Jun 2007 10:10:00 EST. Please see our terms for use of feeds.