I know, I know: forecasting the imminent demise of America's car companies is nothing new, but recent events have highlighted the kind of shortsighted planning that has plagued Ford Motor Company (NYSE: F) and General Motors Corporation (NYSE: GM) for years. While the gas crisis has exacerbated the shortcomings of the automakers, the companies' failures to understand their core audience, invest in R&D, and ensure the quality of their finished product are long-term, endemic problems that make them a very questionable bet.

Recently, for example, General Motors' decided to offer incentives, extended protection plans, and employee pricing to draw buyers to the line; these innovations, however, have had the added impact of massively undercutting revenues. As Williams-Sonoma could now point out, slashing your profit margin is not really the best way to make a profit. While their decision to get rid of Hummer should help GM shed a pricey and currently unpopular line, by the time the sale is finished, gas prices will be back down and everybody will be driving hydrogen-powered cars.

Ford, meanwhile, has decided to focus its attention on cars, a long-term plan that doesn't seem very well thought out. While the Mustang is, perhaps, Ford's most famous model, their trucks have long been an iconic symbol of the company. Rather than invest in making their strongest sellers more fuel-efficient and thus more attractive to consumers, Ford seems to be placing its eggs in a somewhat unreliable basket.

Ford (NYSE: F) will stick to its plan to become less of a truck company and more of a car company, even if oil prices stay relatively low. According to Reuters, "A decline in gas prices would support consumer confidence, but customers still face job risks, potential financing difficulties with tight credit markets and other factors and it would not change Ford's planning assumptions."

Ford hurt itself with its last "all or nothing" gamble, and it could hurt itself with this one. Going to extremes has done little for Ford over the last decade.

The demand for small cars is not likely to change. It is hard to imagine gas prices going below $3 in the next year. Crude seems to have set a floor above $110 a barrel, which is still very high compared to 18 months ago.

But Ford has the brand image of being first in bringing the consumer high-quality pickups and SUVs. Its F-150 truck has been the top selling vehicle in the U.S. for a number of years.

Ford has to be careful it does not let the pendulum swing too far away from its current core business. In a couple of years, the market may change again. Use of alternative energy could help inch gas prices down by 2010. Ford can't afford to be caught flat-footed again.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Billionaire investor Kirk Kerkorian said he has added $100 million to his pool of capital for buying shares of Ford, and may borrow as much as $600 million to buy shares, according to a U.S. Securities and Exchange Commission filing, Bloomberg News reported Friday.

Kerkorian now says he may borrow up to $600 million, up from $500 million, from the Bank of America (NYSE: BAC), according to the filing, Bloomberg News reported.

Ford's (NYSE: F) shares fell 40 cents to $6.75 in mid-day Friday trading, amid a broader market sell-off.

Kerkorian's announcement occurred one day after Ford advised analysts and investors that it had abandoned its profitability target for 2009, due to rising steel and gasoline costs, among other factors, The Washington Post reported Friday.

Ford's shares: not overpriced

Independent stock analyst C. Leonard Bauer said Kerkorian's tactic, should he follow-through and increase his 5.5% Ford stake, is daring, but risky. "Let's just put it this way: Kerkorian would not be radically overpaying for Ford at these price levels," Bauer said.

If you own a Ford F-150, or a Lincoln Mark LT pickup truck, then you want to pay special attention to this, as Ford (NYSE: F) has announced that more than 655,000 of these vehicles are being recalled at this time.

The reason behind the current recalls is a possible problem with a hose that can affect the trucks' ability to brake properly. So far, Ford claims that there have been 11 accidents resulting from the faulty hoses, but that there have been no injuries to date.

The vehicles in question involve the 2005 and 2006 models of the trucks that come with the 5.4 liter 3-valve engines. If you have one of these trucks you should contact your local Ford dealer as soon as possible and get your replacement hose, at no cost to you.

Most of the trucks in question are located in the United States, which accounts for more than 600,000 of the trucks. Canadian residents account for another 50,000 vehicles, with the small remainder being located in other countries around the world.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

When it comes to comparing the pick-up trucks of Ford Motor Co. (NYSE: F) and Chevrolet by General Motors Corp. (NYSE: GM), I can honestly say that I've owned both brands. I bought one F-150 off the showroom floor. I also bought one that was very well used. Both my Chevy Silverados were low-mileage, used models. I leased one of them from my dad and the other one I bought from my brother. I have also had opportunities to drive multiple specimens of each brand that were owned by friends or associates. I like both brands as far as their trucks go. Their cars are a story for another day.

To me, Chevy trucks always seem a bit more solid, with interior appointments a little more lush and inviting. Ford trucks seem to focus more on utility and usability within a bit roomier interior. The Chevy trucks always exhibit deep power, easily delivered upon demand. Fords trucks always seem a bit more spunky with their aggressiveness always close under foot. Chevy trucks appeal to the gentleman in me but they've always done any job I asked of them. Ford trucks appeal to the workman in me and they sometimes seem immortal.

The Ford (NYSE: F) F-150 has been one of the best selling vehicles in U.S. history. It is one of the most profitable products that the company produces.

A new version of the F-150 is one the way. According to Reuters, "the automaker, which has said its turnaround efforts hinge on exciting new products, is counting on the new trucks to help stem its protracted decline in U.S. sales."

Even if the truck has very little competition, it would not be likely to sell well. Pickups consume a great deal of gasoline. High fuel prices make the F-150 unattractive from that standpoint. And, Americans will probably defer new car buying due to tight credit and a bad economy.

In addition, Toyota (NYSE: TM) has entered the full-sized pickup market with the Tundra, and Chrysler has been in the business for year. GM (NYSE: GM) has a large line of light trucks. Each of these companies want the profits that come from selling a lot of pickup trucks.

If the F-150 is critical to Ford's fortunes, the company has a problem.

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

General Motors (NYSE: GM) said Thursday it will sell its mid-size truck unit, which built about 40,800 vehicles in 2006, to Navistar International. Financial terms were not disclosed.

GM's shares fell 20 cents to $26.46 in Thursday midday trading.

GM said the agreement constitutes another step in the company's plan to focus on designing, manufacturing and selling cars and light trucks around the world. GM added that the deal would leverage Navistar's strengths in commercial trucks and engines, enhance its economies of scale and lower costs.

Good decision

Analyst C. Leonard Bauer, formerly of Prudential, said he likes the sound of the Navistar deal.

"This will enable GM to allocate more resources on its core: cars and light trucks," Bauer said. "I like the sale to Navistar in that it gets GM out of a space that did not represent a big gainer. GM has seen the future, and for them it's not in manufacturing mid-size trucks."

Big Three automakers General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler plan to decrease production of full-size pickups - - including curtailing production for all or part of January 2008, due to a slowing economy that's expected to decrease sales, The Wall Street Journal reported Friday.

Earlier this week General Motors announced it will impose a two-week shutdown at its pickup truck plants in January 2008.

Ford said its truck plants would likely reduce overtime or impose temporary shutdowns in January 2008 as part of its Q1 production cutback.

Chrysler LLC said it will stop production at plants in Warren, Mich., and Fenton, Mo., right before Christmas through all of January 2008.

Speaking at the Los Angeles Auto Show, Ford (NYSE: F) CEO Alan Mulally said the automaker is committed to improving miles per gallon efficiency and reducing emissions via implementing technological advances.

And the technological advances Ford's looking to incorporate to help stabilize its market share? Direct fuel injection, smaller-cylinder engines with turbo charges, lighter weight materials, hybrids, and diesels, among others. Moreover, Mulally said Ford's goal will be to increase fuel economy without sacrificing engine performance or auto safety. Ford's shares drifted three cents lower to $7.95 in Thursday afternoon trading.

In general, analysts were encouraged by Ford's presentation, despite the company's lack of a time-table for efficiency improvements or announcement of changes to specific vehicle models, other than a promise to apply diesel fuel and technology to improve the mpg of its popular but fuel-guzzling F-150 pickups.

In July, trucking and transportation logistics company Werner Enterprises Inc. (NASDAQ: WERN) announced 2Q 2007 earnings that essentially repeated all of the problems that bedeviled the company in 1Q 2007: soft demand for freight shipping due to slowdowns in the housing and automotive industries; rising costs for fuel, insurance and claims; too many trucks chasing too few truckloads; too much lower profit margin freight; inefficiencies matching trucks to freight resulting in too many empty miles. Well, at least the weather was better in the spring quarter than during the winter. Given the continuing problems, it should come as no surprise that 2Q results pretty much mirror 1Q's disappointing results. Revenues were just above flat at $531 million for the quarter. EPS declined 15% to $0.30.

On a more positive note, Werner Enterprises has a very proactive management team that is trying to position Werner to be one of the survivors in the trucking industry when the dust settles over the next 18 months or so. At that time, Werner management is betting that freight shipment prices will rise, possibly dramatically, as demand will finally exceed supply of available trucks. Werner is reducing its truck fleet size to match demand, and has developed a much more efficient system to match cyclical freight load demands to available trucks. With increased scheduling efficiencies, Werner is going after higher profit margin freight loads and aggressively cutting the number of empty miles its trucks run. Werner is also running a truck remarketing program to clear its inventory of used trucks and trailers. During 2Q 2007, sales of used equipment added $7.6 million to the bottom line.

Werner repaid $30 million in debt during 2Q 2007, leaving $50 million in debt still on the books. The company repurchased 1.5 million worth of its own stock for a total of $28.6 million. Given that most of the news from Werner has been negative for months, why is the stock up 10% since the beginning of the year, reaching a 52-week high of $22.00 last week before closing Friday at $20.22?

The market applauded Ford Motor Company's (NYSE:F) October sales numbers so loudly that investors must have thought that Pavoratti had taken the stage for one last performance. Ford's stock rose 3% to $8.52 on the news that its U.S. car sales rose 22% from October of last year. In the small print, it said that last October was abysmal because it fell after a period of huge incentives that drove summer 2005 unit sales up. Truck sales were flat, and that is where Ford's most profitable vehicles, like its F-Series pick-up are.

Even with its October numbers, Ford has offered no evidence (subscription required) that the company is not still in a long, dark tunnel. According to the Wall Street Journal: "At Ford, October vehicle sales jumped 8% from a year earlier but were off 9.6% from September."

Inventory problems (subscription required) will make production cuts necessary for the first half of 2007.

In addition, cash is starting to become an issue at Ford in the minds of some. The company went through $3.1 billion in Q3 and is forecast to eat another $3.6 billion in Q4. That takes into account unit sales at a rate the company showed in October. Ford has over $23 billion in the bank, but another year like 2006 would leave the company very close to the edge.

Ford has come up quite a bit from its 52-week low of $6.06 but it is hard to figure out why.

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

Nothing seems to be off-limits in the auto industry. There is a report from the Automotive News, which indicates that General Motors Corp. (NYSE: GM) and Ford Motor (NYSE: F) talked about some type of alliance. There is also the idea of a three-way alliance with GM, Renault SA and Nissan.

Well now there is some hostile activity in the auto sector. MAN AG, a Germany manufacturer of commercial vehicles, has made a $12.15 billion offer for Scania AB, a truck manufacturer in Sweden.

The combination would have a lot of heft, with 18.5 billion Euros in sales and operating profits of 1.4 billion. There is also likely to be lots of cost synergies. Something else: the two companies are fairly complementary. That is, MAN's strength is on trucks for short runs, whereas Scania is focused on long-journey trucks.

The new entity should also put more pressure on rivals, such as DaimlerChrysler and Volvo AB.

But the price was not enough to interest Scania, as its board rejected the offer. The two biggest shareholders include Volkswagen AG (34% stake) and Investor (29% stake), which is run by the Wallenberg family (one of the richest clans in Sweden).

Yes, this is old-fashioned negotiation at work. So expect the price to go north on this deal.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.