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TTAC commentator Jeevesw reminds us that The Blue Oval Boys also got the Blogging Stocks reality check, and it looks like another case of chew and screw. GM is number 7 on their list of Portfolio Killers. Ford comes in at number eight.
Despite its recent successes at negotiating new contracts and its refusal, so far, to accept government funds, when General Motors (NYSE: GM) goes into Chapter 11, Ford (NYSE:F) will have to do the same to remain competitive.
Given the ferocity of this downturn, if it didn’t accept government handouts, it would probably end up in some form of forced re-organization anyway.
Real shareholder value: zero
In Consumer Reports, Ford represents the best America can do. With a mediocre overall score of 63, they are far better than Chrysler and yet…
I’d be willing to gamble a little money on Ford stock right now. Not the whole farm, mind you, but at least the egg money.
Ford had faced up to reality before things got really bad, and brought in fresh management. They’ve got new, desirable, product (IMHO) and not nearly the deadwood that GM does.
It’s also worth noting that they saved themselves from death back in the 80’s with the Taurus introduction, so there are still a few old timers around who know the life-boat drill.
I think that they have a chance, and more power to ’em.
GM on the other hand…. needs to have a very-near-death-experience in order to survive, and I wouldn’t buy their stock on a bet.
It’s also worth noting that they saved themselves from death back in the 80’s with the Taurus introduction, so there are still a few old timers around who know the life-boat drill.
Yes, but so does Chrysler (K-Cars, the LH, the minivans, the LX). Turnarounds are all well and good, but you shouldn’t make a habit of them.
They’ve got new, desirable, product (IMHO) and not nearly the deadwood that GM does.
The more I think about it, the more it seems like the healthy option would be to can GM and let Chrysler and Ford continue. There’s a chance in hell that the two smaller American companies have the will and agility to improve (assuming Chrysler could be pried under both Cerberus’ talons and Daimler’s legacy).
GM, by comparison, doesn’t seem to want to be saved, nor has it tried to help itself (well, perhaps outside of Saturn) any time in the last half-century.
Wow, Blogging Stocks said so!?!
I don’t want to commit a logical fallacy by attacking the messenger, so let’s just call it a Grain-of-salt note in questioning expert credentials:
After doing five minutes of research, Blogging Stocks picks for 2008 were down %51.97 while the indices average as a whole was down %38.09.
And considering this site’s low esteem of Autoblog, your giving a lot of uncritical coverage to Autoblog’s sister financial site.
psarhjinian:
“The more I think about it, the more it seems like the healthy option would be to can GM and let Chrysler and Ford continue.”
Welcome aboard. I have been saying this for a while. GM is that big fat slob on the lifeboat of government bailout money that will require an exorbitant amount of resource$ to keep alive.
Now I want all three to survive. But *IF* the government has to play lifeboat then it makes more sense to throw GM overboard. If you toss Chrysler, there is very little upside to GM and Ford. If it’s GM, it’s a big boost to Ford and Chrysler.
Blogging Stocks hasn’t exactly added anything new to the discussion of Ford, have they?
The ‘foundation’ upon which all the majors rest is of course the suppliers, and they’re nearly terminal. Without a very significant increase in overall sales, I don’t see how this thing can go on much longer. I assume the Feds have worked up a big chart showing the relationships of all the players along with degree of sickness. I can’t see putting a nickel in anything related to the car business.
Ah, the Ford Nucleon. Now, that’s a concept car! Screw the Volt. Not only the power plant but the car is cool too! Maybe we could take it one step farther and use a Mr. Fusion reactor like the “Back to the Future” films.
Ford’s push for global integration of platforms will yield profit results when the car markets turn around in the US and Europe. Ford’s issue is whether it can hang on long enough in the interim…
And let’s not forget that if the gov’t makes the right decision to put Chrysler down, Ford and GM will benefit. They’ll likely split the truck business (Ram goes away) which is at least good for 100,000 units to Ford.
If both GM and Chrysler got Chapter 7, I think there is some real honest value to Ford stock. If the Gov’t keeps the welfare payment to zombie auto manufacturers (GM/Chryco) they’ll kill Ford off by association. Since Congress seems all too happy to play Big Daddy to GM and Chrysler these days I would not be spending any $$$ on Ford penny stock. Ditto that for GM stock too.
I would have to take exception to this post for two reasons:
1. Blogging Stock is at best a somewhat incompetent equities website with a poor history of success or at worst a conduit for rumors and innuendo pushed by stock manipulators.
2. The definition of “news” should not include unsubstantiated claims & opinions made by bloggers.
Ford stock at $2 is a fairly good long term prospect. No one knows how long or deep the recession will go but if there is one US automaker that will rebound well after its over, then that is most likely to be Ford.
Ken Elias,
An xtra 100,000 F150’s for Ford is helpful, but it doesn’t even put them back to where they were in 2006 sales. That’s why it make more sense to put GM down. 500,000 Silverado/Sierra sales split between Ford and Dodge is HUGE. Not to mention the other model gains. Sorry, GM’s carcass is just the right size for Ford and Chrysler to feast off of and get out of government aid. And the government will save billions not having to (maybe eternally) bailout GM.
Ford and Gm aren’t worth nothing they are worth very negative nothing.
The government will need to pump hundreds of billions in to keep them afloat.
Ah, the Ford Nucleon. Now, that’s a concept car!
Indeed, was it some weird MHD deal or did it use high pressure steam like gawd and Rickover (yes, yes and yes) want for their travelering kids?
Edit:
Also that sucker is wanting treads not Firestoneds. I foresee serious, I mean serious handle problems. If you catch mai drift.
.5MT: “Indeed, was it some weird MHD deal or did it use high pressure steam like gawd and Rickover (yes, yes and yes) want for their travelering kids?”
I think mostly Ford was presuming the reactor technology they needed would be ready at the necessary price at some nebulous point in the future when they were bringing the car to market.
Kinda like the Volt’s battery pack.