So not only does Ford not need bailout money, but they have enough extra laying around to provide D-I-P financing? Maybe they will buy some pieces of GM and Chrysler...
When Ford issued more shares last month, I wondered what they had in mind for the money they raised. I figured it was for general operations, but it looks like they had Visteon in mind.
Well, it looks like a real smart move (especially since their stock is still pretty high comparatively these days). Now they've got enough to defend some of their suppliers from going Ch7...yet ANOTHER thing GM and Chrysler never thought of.
I should go back to the GM forum and make fun of them even more than that Top 9 Domestic Manufacturers list I posted, haha.
I think Lemko and the GM crowd are in mourning. I will be surprised if GM lasts a year as Government motors. I got a feeling our grandkids will get the tax bill for the UAW, bondholders and executive bonuses bailout.
I'm glad I bought Ford when it was at $1.76. I should have bought more. I am just too conservative. Best to not get greedy.
You've done well, but I wonder how much more upside there will be? I expect more stock issuances further diluting stock value and if GM turns around in the next few years they will probably have a cost base advantage over Ford which has to actually pay its debt in full. I can see Ford getting hurt for doing the responsible things while GM skates on the public dole.
You have to keep in mind that Ford mortgaged much of its assets in 2006 to get that cash, so I'm not so sure they are as healthy as they seem. Unless I'm not understanding the meaning of a mortgage, Ford is living on a credit card of sorts. Of course, Howard Hughes' TWA did that and got away with it for a long time.
This kind of thing is what credit is for...if you have a good enough credit rating to get it. And not all of it is from that...several billion are from the recent stock offering. That's individual people sinking their money into Ford (and not diluting the stock value, which is something). Apparently they have a pretty good credit rating with stock purchasers too.
This recession has brought on a new definition of healthy. The fact that Ford has not needed a loan; stock has risen; increased production; and has shrunk their quarterly losses gives me hope that they will mak it through this recession.
Again, GM still needs a lot of luck to survive even with this bankruptcy.
In another story, Warranty Week has a graph this week called "Warranty Accruals per Car." (Figure 7).
Ford's accruals have gone down in 2008. "That 2008 drop is partly thanks to the divestiture of Jaguar Land Rover, and partly due to some quality-raising initiatives begun years ago that are finally bearing fruit."
I believe Ford will make it through this recession and become one of the top 2 sellers here in the U.S. market. Ford had a smaller ship to turn around than GM. Ford quality/ reliability/safety are starting to get noticed. The new Taurus SHO has handily beat and Audi A4 in a comparison test and even compared to the A5. I knew America could be world class.
Of course it can. But as we can see, only one approach out of three worked:
GM: Huge anonymous conglomerate of conglomerates busily conglomerating cars. Result: CEOs count bonuses, accountants count beans, UAW counts strikes, dealers count how many dealers next door, customers count rebate dollars, reviewers count cheap bits and flaws resulting from counting beans. Ultimate result: bankruptcy.
Chrysler: Smaller private company owned by a large anonymous group of highly diversified investors. Result: No one knows where the money is going, no one knows where the research went, no one knows when the cars will be updated. Ultimate result: bankruptcy.
Ford: Publicly traded company theoretically but controlled by the Ford family. Result: Ford family takes pride in Granddad Henry's business (and wants to get rich off of it), cuts bonuses, cuts beancounters, finds people (in Europe) who know how to design cars, doesn't dumb them down. Ultimate result: profitability.
A stock offering in this case is dilution. The money they received from the offering cannot add to Fords value as they are in debt many times more than the revenue generated from the stock offering. Ford has over 150 billion in long term debt. Shareholder equity is a negative 17 billion. (Shareholder equity is always a wishful thinking number as the value of property and equipment owned is never even close to being realized). At a $5,000 profit per car, (again wishful thinking) Ford will need to sell 3.4 million cars just to have zero equity. Ford also borrowed 23 billion from the govt. in 2006 and another 5.9 billion this year. Recent spike in stock price due to sentiment, not value. Always a loser in the long term. New models don't matter so much until they have been around a couple of years and built a reputation. Bottom line, Ford could be in more trouble than management lets on. Step carefully.
I will make fun of you. GM still has a larger market share than Ford. Even after bankruptcy. What does that say about a company that can't kick it's bankrupt competitions rear end?
Market share isn't everything. GM still can't make a profit with all of that market share. Ford just did. So in point of fact they DID kick the bankrupt competition's read end.
Doesn't matter how many products you sell: if you can't actually make money on them you're losing. Period. You could be the #1 company in market share in every category and still lose because you're not taking more money in than you pay out.
I agree. Although Ford stock went higher than I thought it would, their financial leverage is going to require more dilutive stock offerings, GM govt money and BK may give it a cost advantage over Ford, and Ford will IMO screw over the stockholders to preserve the Ford family preferences. I'd be a seller here and take my profits. That doesn't mean I don't like some of their new products though.
"The 2010 Ford Taurus is rolling onto dealer lots across the country, and, judging by a flurry of recent posts in Edmunds' CarSpace Forums, its all-new design appears to have captured the attention of the car-buying public.
But with no lack of tough competitors out there, will it also capture their business? And is it priced right?"
Wow, I didn't know that our posts were so powerful. Just by posting, I can help Ford make profit and save them?!
The worst thing that can happen to Ford is for the U.S. government to continue to support GM and Chrysler. Ford is playing against subsidized competitors who can afford to lose money, because the U.S. government is trying to protect the remaining jobs at those companies.
I also agree that the Taurus anywhere near sticker is too much $. How many middle-class people are out there who want to buy a $30K car (with some options) that will depreciate 50% in 3 years? Not me.
I mean real world residuals not the made up ones from leasings recent past. There are only a handful of cars that do much better then that over the course of three years and none of them are in the size class of the Taurus.
MINI Cooper used to be one but with the incentives they are piling on it isn't doing as well as it once was. It still does much better then 50% but it has fallen off.
Tacomas also used to hold their value you much better then 50% but that is not true anymore.
Lets take a 2007 Accord EX 2.4 for example. That is a car that is three years old if you bought it when the 2007s first came out in the fall of 2006. Average miles per year for a mass market sedan like that is 15,000 miles a year and typically the mid level trim of a car like that has the best residual. You go adding leather, V6 and Nav to a car like that and you don't get as many of your dollars back.
Both Galves and Cars.com confirm that original MSRP for the accord is around 22,450
That trade in figure is about 52% and that is taking into account the huge rise in used car prices over the past couple of months. We have never paid more for three year old cars as a percent of original MSRP then we have been over the past few months because there aren't any used cars out there.
We can try the same trick with a 2006 Acoord that would be three years old if you bought it as a left over.
Just under 50% residual of new MSRP for that one with the same 45,000 miles. Granted you probably paid a good bit less for that left over 2006 Accord so in gross dollars you probably lost the same amount.
Do the same drill with a loaded up V6 Accord with nav and the residual on the 2006 goes to 43% while using the same Base MSRP which is actually low as Galves doesn't add in the up charge for Nav to the MSRP. I don't know what the original add for Nav was on an Accord in 2006 but lets say it was 1,200 bucks as that is probably the low side of average.
Galves says the MSRP was $29,300 plus $1,200 for nav so $30,500. Cars.com says $27,300 but they list the same MSRP for manual and auto EX V6 accords so that can't be right. Automatic trans as at least a $1,000 dollar option.
Galves puts trade in at $12,500 which puts you at a 41% residual.
I can do the same thing with a camry and get the same result.
I didn't mean for you to think that I was saying the Ford Taurus had an exceptionally bad depreciation, relative to other cars.
What I'm saying is that as the price of cars rises, wages are pretty stagnant and unemployment rising, and the cost of food and health-care rising, the pool of new car-buyers for this type of car, and with the disposable income, is shrinking.
I'm middle-income, can buy a regular Taurus or Taurus SHO for cash tomorrow, but I would not do so to lose 50% of my purchase price. I'd be much more likely to get by with a smaller and less expensive vehicle - a Subaru Legacy? or a 4-cyl Hyundai Sonata? for basic sedan transport. Heck if I really wanted to make a smart move, I'd buy a new base Prius and drive it for 1-3 years until the next gas price-spike and sell it then when people will pay a premium for such a used-car.
But no $30K for an unexciting vehicle is too much. Ford will not sell many Tauruses after the newness wears off in a couple of months, without heavy incentives which then will make the Taurus break-even?
I'd be more interested in something fun from Ford. The Ford Fiesta looks like a good thing, and the 5.0L Mustang GT for 2011 will make Ford some money. I could see either of those in my garage.
I guess I just completely disagree with the premise of your theory. I don't think Ford will sell a ton of Taruses but I think they will sell enough to make money off them. Have you driven a new Taurus yet how do you know it is unexciting?
Have you ever driven a Prius for an extended period of time? I challenge anyone who enjoys driving to drive a Prius for a year and be happy. I drive someone to drive one for a month and be happy. I couldn't take one for a weekend.
The Legacy with similar equipment to the Taurus(AWD similar hp engine etc.) is only a couple thousand dollars cheaper, gets the same gas mileage and has less technology.
Yeah its a bigger car and that will turn some people off but there are people who will buy it because it is bigger.
Yeah it is just one month but Ford sold almost twice as many Tauruses as Subaru sold new Legacies. Subaru is still pretty much a niche brand. I like them, hell I drive one as a demo, but outside of the Northeast and the northwest they don't make a ton of sales.
I don't think Ford will sell a ton of Taruses but I think they will sell enough to make money off them.
The cost to manufacture something depends on how busy you can keep the factory. All the cost of the development, workers, and the plant are divided by the number of vehicles made and sold. So in order to make profit, income exceeding costs, you need to sell quite a few, or sell at or near MSRP. Ford is still losing a lot of money each month. I bet if Ford figured their loss/profit on each model, they may not have a single model that is selling enough to make a profit on that model.
is unexciting?
Exciting is certainly a subjective word. Some people might consider Janet Reno exciting, I don't know. But a mid-size, or large Ford sedan with moderate power is not exciting to me. If Ford sells this Taurus to the same type people that have been buying Impalas, Camrys, and Chrysler 300's then it is an appliance type vehicle.
If I want an appliance car to get from Pt. A to Pt. B I'm going to get a 4 cyl Legacy with $22K MSRP, or buy something even less expensive, or used. I wouldn't waste more $ on a car like a Taurus or anything in the $30K range.
Re. Subaru national sales distribution... perhaps statistically their major sales areas are the Northeast and Northwest, but there's a multitude of Subarus in the Midwest as well. Here in the snow belt, Subaru is a very popular vehicle, obviously due to its AWD and durability/reliability/safety.
Yep, live in NH, and have had a couple of Subarus - an '82 wagon and a '96 Impreza wagon. I buy the smaller, lower cost versions. I would not be interested in a $30K Subaru unless it had an STi badge on it. I'd buy a BMW 328X (AWD) on the European Delivery program, at that point - before buying a $30K Ford or Subaru.
I don't like the middle of the market; these $30K appliances. If I had to pick 2 Ford's to put in my garage I'd pick a - Ford Fiesta that doesn't cost much to run and gets great mpg, and a Shelby GT500 for fun. A Fusion, Taurus, their crossovers don't do anything for me style-wise, will cost lots in depreciation, and do many things fairly well but don't do anything very well (unless you really need to haul people and things).
"Ford achieved a 10.1-percent market share in September in its primary 19 European markets - the best share for any month since September 2001 - and a 0.8 percentage point increase on September 2008."
I didn't see anywhere in that article where profit or loss was mentioned, and that is far more important than market-share. Otherwise it's touting "we're serving lobster and free drinks on-deck, tonight!" while ignoring to mention the ship is continuing to sink.
If Ford continues to post $ losses then they will end up in the same situation as GM and Chrysler - needing long-term government support to saty anywhere near their current operational size.
When do you think we'll see Ford post some quarterly profits?
Ford keeps saying they will be profitable in (or was it "by") 2011.
Don't have the link handy but one of the autoblogs is running a story about how people are unhappy with subcompacts and want to go back to bigger sedans and SUVs ("cheap" gas helps). That could hurt the Fiesta if people decide it's too small.
Ford keeps saying they will be profitable in (or was it "by") 2011
I've been around the corporate world long enough to know that if the upper level executives want to be around, they have to have a plan that says they are going to be successful. Get it? If they say they think the reality is that the company has a 25% chance of surviving based on trends, then they are gone tomorrow. They would be replaced by a group who would put together their "highly likely turnaround" plan based on optimistic projections, and would predict profits.
If you go back and look at GM's execs late last year, note how optimistic they were that they would turnaround the GM. Wasn't it "Bankruptcy is not an Option"? just a few months before it happened?
You can go to any corporate website and watch any interview of any corporate executive and you will see a positive future being promoted; sometimes while they are dumping their stock and looking for their next job.
It's not much different then a politician who sees the polls 2:1 against them, who campaigns hard and predicts the day of the election that they see victory at hand. These "leaders" know they can't admit how dark their goal appears.
Gas prices may have fallen from their peaks, but incomes aren't rising, and the days of people using their home equity as a piggy bank to pay for a $40,000 SUV on a $60,000 annual salary appear to be over.
So people will still be downsizing their automotive aspirations, whether they like it or not.
There will be a market for a GOOD subcompact. Whether the Fiesta is a success or failure depends on how good it is - the European version appears to be great - and Ford's expectations. If Ford expects to sell 300,000 a year, it will be disappointed.
For the record, I drove a white five-door hatchback Fiesta at this summer's Carlisle All-Ford Nationals, and was impressed. It definitely would be a good pick for a commuter car or a car for a college student.
It looked and drove like the people who designed and built it really cared (think the Honda Fit, or even the Civic), as opposed to an effort that was phoned in by engineers and managers who would rather be designing Cadillacs or big trucks (think GM small cars).
You're not forgetting that C4C ran in the 3rd quarter are you? Because C4C did cause Ford and almost every other automaker to have an artificially "better" quarter than they otherwise would have.
So if Ford or other automakers don't make profit in the 3rd quarter, then they had better have some significant improvements in 4th quarter and 2010 to expect a profit.
I don't see that happening, as wage increases are negligible and unemployment continues to increase, and rising foreclosures contuinue to dampen the most valuable asset people have - the value of their home.
Every automaker had better come up with a plan that accounts for an automarket in the U.S. of 10M vehicles, and get their costs and size of operations set for that, such that they make a profit there.
"2010 is setting up as a big year for the Dearborn automaker. The company is ending '09 on a roll it should carry over to next year. The latest sign: Ford of Europe boasted sales of 19 percent last month and will finish the year as the second best selling brand. Its 9.1 percent market share in Europe is its best since 1999."
Seems that the more expensive models are outselling the more base models by a good margin. They are outselling them by so much that Ford needs to change their product mix. We will have to see if this holds up over the longer term but so far at least you are wrong.
I bought Ford at $1.76 and was getting ready to sell. I don't want to be greedy. Yet Ford could go a lot higher. I finally sold MCD that I bought at $14. My broker convinced me that Long Term Capital gains would go up next year. So I don't want to get screwed by the higher taxes.
It's a DOW stock so all you have to do is open a brokerage account, fund it with a bit of cash, and then buy some shares. There are plenty of traditional and discount brokerages out there (Merrill for traditional, Schwab for discount, and plenty of other even cheaper ones - figure $8 to $20 to do a trade). The brokerage will keep track of the shares you own and all you'll get is a statement every month.
Ford is doing good, relatively speaking, but just about every asset they hold is in hock, and they aren't out of the woods yet. There are probably safer investments out there. But if you have some "play" money hanging around, it's fun to invest and watch the market.
Check the Stocks discussion over in the Off Topic Chatter board.
As Steve has pointed out you need a brokerage account. I did the buy in my 401K so will not see any capital gains until I have to start taking out at 70.5 years. Personally I think Ford is high now with all things considered. I don't give advice on stocks. Too much of a gamble.
We will have to see if this holds up over the longer term but so far at least you are wrong.
Go back and read what I wrote, I said "after a few months", when the newness of the Taurus wears off. Given that there are 300M+ people in this country, thereis a miniscule amount of people who are going out and buying a Taurus at this time, and for the uniquness factor, it is not surprising they want a "nice" Taurus to show off. The Taurus SHO appeals to the same type of people that a Pontiac G8 GT might have. As we saw with that vehicle there was a demand at the beginning, but the model didn't really do much to help Pontiac after those first few months now did it?
Consumers are tapped out; their home-equity is lousy, their governments at all levels are broke and raising taxes and fees. It's not a good environment to try and sell $30K+ vehicles when it is not a NEED. A much less expensive vehicle can get people around, and that's where the market-growth will be. Those that recognize that the country has declined economically will be the ones to benefit (just look at the value of the $, the trade-deficit, and the governement deficits).
That's the average of the number five analysts told Bloomberg to expect tomorrow when earnings results are announced. Ford Could Post Record Third-Quarter Profit (AutoObserver)
Ford's financial issues are cash flows and debt leverage. Continued profitability should resolve them in the next few years. The other concern is the potential significant cost structure advantage GM gained in its government sponsored BK. This could impair their profit margins compared to GM causing Ford to incur higher interest rates and possibly inhibiting stock price growth down the road. I think the key here is for Ford to keep its quality advantage over GM products.
"Ford Motor Co. reported Tuesday that it had earned $1.69 billion in the third quarter, a new record for the quarter that surpassed analysts' forecasts. Ford also announced plans to further reduce its hefty debt load further".
It has not hurt their stock price either. From under $2 to over $15 in less than 24 months. From the brink of bankruptcy to record profitability in less than two years. That was good management and a bit of luck with Toyota falling apart.
"Ford is one step closer to getting an investment-grade credit rating. A move that will further help the company get better interest rates when it issues debt in the future. And as it builds up its cash position, Ford could once again pay a dividend to common share holders. Ford hasn't paid a dividend on its common stock since 2006."
It sounds like the stock just got watered down from converting the debt to shares, but the quote today is back up to almost $16.
Over the years I've come to think of auto companies like airlines, they are sometimes a shorter term investment opportunity, but not a good long term holding - too many fixed costs, union problems and tight correlation to economy changes.
"Lincoln knocked Porsche off its perch as the most dependable of 34 brands in the 2011 J. D. Power and Associates Vehicle Dependability Study. It was the first time Lincoln has topped the list, which has been published annually since 1990."
Comments
I should go back to the GM forum and make fun of them even more than that Top 9 Domestic Manufacturers list I posted, haha.
I'm glad I bought Ford when it was at $1.76. I should have bought more. I am just too conservative. Best to not get greedy.
Again, GM still needs a lot of luck to survive even with this bankruptcy.
In another story, Warranty Week has a graph this week called "Warranty Accruals per Car." (Figure 7).
Ford's accruals have gone down in 2008. "That 2008 drop is partly thanks to the divestiture of Jaguar Land Rover, and partly due to some quality-raising initiatives begun years ago that are finally bearing fruit."
GM: Huge anonymous conglomerate of conglomerates busily conglomerating cars.
Result: CEOs count bonuses, accountants count beans, UAW counts strikes, dealers count how many dealers next door, customers count rebate dollars, reviewers count cheap bits and flaws resulting from counting beans.
Ultimate result: bankruptcy.
Chrysler: Smaller private company owned by a large anonymous group of highly diversified investors.
Result: No one knows where the money is going, no one knows where the research went, no one knows when the cars will be updated.
Ultimate result: bankruptcy.
Ford: Publicly traded company theoretically but controlled by the Ford family.
Result: Ford family takes pride in Granddad Henry's business (and wants to get rich off of it), cuts bonuses, cuts beancounters, finds people (in Europe) who know how to design cars, doesn't dumb them down.
Ultimate result: profitability.
Sometimes, greed just works.
Doesn't matter how many products you sell: if you can't actually make money on them you're losing. Period. You could be the #1 company in market share in every category and still lose because you're not taking more money in than you pay out.
But with no lack of tough competitors out there, will it also capture their business? And is it priced right?"
2010 Ford Taurus Design Captures Attention, Price Questioned (AutoObserver)
The worst thing that can happen to Ford is for the U.S. government to continue to support GM and Chrysler. Ford is playing against subsidized competitors who can afford to lose money, because the U.S. government is trying to protect the remaining jobs at those companies.
I also agree that the Taurus anywhere near sticker is too much $. How many middle-class people are out there who want to buy a $30K car (with some options) that will depreciate 50% in 3 years? Not me.
I mean real world residuals not the made up ones from leasings recent past. There are only a handful of cars that do much better then that over the course of three years and none of them are in the size class of the Taurus.
MINI Cooper used to be one but with the incentives they are piling on it isn't doing as well as it once was. It still does much better then 50% but it has fallen off.
Tacomas also used to hold their value you much better then 50% but that is not true anymore.
Lets take a 2007 Accord EX 2.4 for example. That is a car that is three years old if you bought it when the 2007s first came out in the fall of 2006. Average miles per year for a mass market sedan like that is 15,000 miles a year and typically the mid level trim of a car like that has the best residual. You go adding leather, V6 and Nav to a car like that and you don't get as many of your dollars back.
Both Galves and Cars.com confirm that original MSRP for the accord is around 22,450
That trade in figure is about 52% and that is taking into account the huge rise in used car prices over the past couple of months. We have never paid more for three year old cars as a percent of original MSRP then we have been over the past few months because there aren't any used cars out there.
We can try the same trick with a 2006 Acoord that would be three years old if you bought it as a left over.
Just under 50% residual of new MSRP for that one with the same 45,000 miles. Granted you probably paid a good bit less for that left over 2006 Accord so in gross dollars you probably lost the same amount.
Do the same drill with a loaded up V6 Accord with nav and the residual on the 2006 goes to 43% while using the same Base MSRP which is actually low as Galves doesn't add in the up charge for Nav to the MSRP. I don't know what the original add for Nav was on an Accord in 2006 but lets say it was 1,200 bucks as that is probably the low side of average.
Galves says the MSRP was $29,300 plus $1,200 for nav so $30,500. Cars.com says $27,300 but they list the same MSRP for manual and auto EX V6 accords so that can't be right. Automatic trans as at least a $1,000 dollar option.
Galves puts trade in at $12,500 which puts you at a 41% residual.
I can do the same thing with a camry and get the same result.
What I'm saying is that as the price of cars rises, wages are pretty stagnant and unemployment rising, and the cost of food and health-care rising, the pool of new car-buyers for this type of car, and with the disposable income, is shrinking.
I'm middle-income, can buy a regular Taurus or Taurus SHO for cash tomorrow, but I would not do so to lose 50% of my purchase price. I'd be much more likely to get by with a smaller and less expensive vehicle - a Subaru Legacy? or a 4-cyl Hyundai Sonata? for basic sedan transport. Heck if I really wanted to make a smart move, I'd buy a new base Prius and drive it for 1-3 years until the next gas price-spike and sell it then when people will pay a premium for such a used-car.
But no $30K for an unexciting vehicle is too much. Ford will not sell many Tauruses after the newness wears off in a couple of months, without heavy incentives which then will make the Taurus break-even?
I'd be more interested in something fun from Ford. The Ford Fiesta looks like a good thing, and the 5.0L Mustang GT for 2011 will make Ford some money. I could see either of those in my garage.
Have you ever driven a Prius for an extended period of time? I challenge anyone who enjoys driving to drive a Prius for a year and be happy. I drive someone to drive one for a month and be happy. I couldn't take one for a weekend.
The Legacy with similar equipment to the Taurus(AWD similar hp engine etc.) is only a couple thousand dollars cheaper, gets the same gas mileage and has less technology.
Yeah its a bigger car and that will turn some people off but there are people who will buy it because it is bigger.
Yeah it is just one month but Ford sold almost twice as many Tauruses as Subaru sold new Legacies. Subaru is still pretty much a niche brand. I like them, hell I drive one as a demo, but outside of the Northeast and the northwest they don't make a ton of sales.
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The cost to manufacture something depends on how busy you can keep the factory. All the cost of the development, workers, and the plant are divided by the number of vehicles made and sold. So in order to make profit, income exceeding costs, you need to sell quite a few, or sell at or near MSRP. Ford is still losing a lot of money each month. I bet if Ford figured their loss/profit on each model, they may not have a single model that is selling enough to make a profit on that model.
is unexciting?
Exciting is certainly a subjective word. Some people might consider Janet Reno exciting, I don't know. But a mid-size, or large Ford sedan with moderate power is not exciting to me. If Ford sells this Taurus to the same type people that have been buying Impalas, Camrys, and Chrysler 300's then it is an appliance type vehicle.
If I want an appliance car to get from Pt. A to Pt. B I'm going to get a 4 cyl Legacy with $22K MSRP, or buy something even less expensive, or used. I wouldn't waste more $ on a car like a Taurus or anything in the $30K range.
I don't like the middle of the market; these $30K appliances. If I had to pick 2 Ford's to put in my garage I'd pick a - Ford Fiesta that doesn't cost much to run and gets great mpg, and a Shelby GT500 for fun. A Fusion, Taurus, their crossovers don't do anything for me style-wise, will cost lots in depreciation, and do many things fairly well but don't do anything very well (unless you really need to haul people and things).
Ford's Europe Share Hits 10 Percent (AutoObserver)
If Ford continues to post $ losses then they will end up in the same situation as GM and Chrysler - needing long-term government support to saty anywhere near their current operational size.
When do you think we'll see Ford post some quarterly profits?
Don't have the link handy but one of the autoblogs is running a story about how people are unhappy with subcompacts and want to go back to bigger sedans and SUVs ("cheap" gas helps). That could hurt the Fiesta if people decide it's too small.
I've been around the corporate world long enough to know that if the upper level executives want to be around, they have to have a plan that says they are going to be successful. Get it? If they say they think the reality is that the company has a 25% chance of surviving based on trends, then they are gone tomorrow. They would be replaced by a group who would put together their "highly likely turnaround" plan based on optimistic projections, and would predict profits.
If you go back and look at GM's execs late last year, note how optimistic they were that they would turnaround the GM. Wasn't it "Bankruptcy is not an Option"? just a few months before it happened?
You can go to any corporate website and watch any interview of any corporate executive and you will see a positive future being promoted; sometimes while they are dumping their stock and looking for their next job.
It's not much different then a politician who sees the polls 2:1 against them, who campaigns hard and predicts the day of the election that they see victory at hand. These "leaders" know they can't admit how dark their goal appears.
Ford 3Q Profit Possible, JP Morgan Says (AutoObserver)
(No one else agrees with JP Morgan though).
So people will still be downsizing their automotive aspirations, whether they like it or not.
There will be a market for a GOOD subcompact. Whether the Fiesta is a success or failure depends on how good it is - the European version appears to be great - and Ford's expectations. If Ford expects to sell 300,000 a year, it will be disappointed.
For the record, I drove a white five-door hatchback Fiesta at this summer's Carlisle All-Ford Nationals, and was impressed. It definitely would be a good pick for a commuter car or a car for a college student.
It looked and drove like the people who designed and built it really cared (think the Honda Fit, or even the Civic), as opposed to an effort that was phoned in by engineers and managers who would rather be designing Cadillacs or big trucks (think GM small cars).
So if Ford or other automakers don't make profit in the 3rd quarter, then they had better have some significant improvements in 4th quarter and 2010 to expect a profit.
I don't see that happening, as wage increases are negligible and unemployment continues to increase, and rising foreclosures contuinue to dampen the most valuable asset people have - the value of their home.
Every automaker had better come up with a plan that accounts for an automarket in the U.S. of 10M vehicles, and get their costs and size of operations set for that, such that they make a profit there.
http://www.nytimes.com/2009/11/03/business/03auto.html
http://media.ford.com/article_display.cfm?article_id=31244
Ford Eyes Big 2010 as Europe Sales Surge (CNBC)
Seems that the more expensive models are outselling the more base models by a good margin. They are outselling them by so much that Ford needs to change their product mix. We will have to see if this holds up over the longer term but so far at least you are wrong.
Why didn't I buy Ford stock at $1.50 :sick: I am thinking about buying a bunch of Ford stock at $9.50 what do you guys think?
thanks.
Ford is doing good, relatively speaking, but just about every asset they hold is in hock, and they aren't out of the woods yet. There are probably safer investments out there. But if you have some "play" money hanging around, it's fun to invest and watch the market.
Check the Stocks discussion over in the Off Topic Chatter board.
Go back and read what I wrote, I said "after a few months", when the newness of the Taurus wears off. Given that there are 300M+ people in this country, thereis a miniscule amount of people who are going out and buying a Taurus at this time, and for the uniquness factor, it is not surprising they want a "nice" Taurus to show off.
The Taurus SHO appeals to the same type of people that a Pontiac G8 GT might have. As we saw with that vehicle there was a demand at the beginning, but the model didn't really do much to help Pontiac after those first few months now did it?
Consumers are tapped out; their home-equity is lousy, their governments at all levels are broke and raising taxes and fees. It's not a good environment to try and sell $30K+ vehicles when it is not a NEED. A much less expensive vehicle can get people around, and that's where the market-growth will be. Those that recognize that the country has declined economically will be the ones to benefit (just look at the value of the $, the trade-deficit, and the governement deficits).
In other Ford news, Ford Invests $850 Million, Adds 1,200 Jobs in Michigan. The fine print says those jobs will be added by 2013.
"Ford Motor Co. reported Tuesday that it had earned $1.69 billion in the third quarter, a new record for the quarter that surpassed analysts' forecasts. Ford also announced plans to further reduce its hefty debt load further".
Ford Sets Third-Quarter Record with $1.7 Billion Profit (AutoObserver)
So maybe that will help address the debt leverage concerns you mentioned.
And the quality advantage - well, Ford and GM are both getting better on that front, leaving Chrysler in the dust.
"- General Motors, which shed its debt in bankruptcy along with problem-plagued brands, showed vast improvement, especially with its newest models.
- Ford, on a continuous improvement path for the past half-dozen years, showed more incremental improvement."
Consumer Reports: Honda, Toyota Still Tops in Reliability; GM Improves (AutoObserver)
"Ford is one step closer to getting an investment-grade credit rating. A move that will further help the company get better interest rates when it issues debt in the future. And as it builds up its cash position, Ford could once again pay a dividend to common share holders. Ford hasn't paid a dividend on its common stock since 2006."
It sounds like the stock just got watered down from converting the debt to shares, but the quote today is back up to almost $16.
Ford Debt Drops Again, Why You Should Care (CNBC)
Lincoln Tops J.D. Power Dependability Survey (NY Times)
(btw, since Ford became profitable in 2010, the discussion name has been changed to something more generic).
I guess so! It could hardly be more generic now....