What’s that up in the sky? Is it a bird? Is it a plane? No, it’s the blue oval! Yes, everyone favorite car company is flying high. Fresh off the news that it made $1.7 billion between July and September and that they paid off some more of their big debts, people are talking big of Ford. “They’re in the best shape that they’ve been in for years,” said Shelly Lombard of Gimme Credit (I checked it out, they have their own website) via TMCnet.com. But Ford, through whatever reason, but I reckon it’s fiscal prudence, is staying cautious.
Bloomberg reports that Ford’s CFO Lewis Booth isn’t entertaining the idea of paying dividends anytime soon. “Paying a dividend is some way off yet,” said Mr Booth, “We still have a lot of work to do on our balance sheet.” While Lewis remained tight lipped on dividend paying, analysts tried to have a go and predict. John Murphy, an analyst for Bank of America, wrote that it will be dividends “by 2012 at the latest”. Bloomberg, also predicts 2012, but they go a stage further and predict that Ford would pay 5 cents a share. The future is looking good for Ford. Paying down their debts continually reduces their interest obligations and Ford cars are gaining market share. Personally, I’m staying cautious. If, as I think, another recession/crash is going to happen, will Ford’s recovery collapse? Toyota still has money in the bank, GM has a rich sugar daddy. Volkswagen is super strong. Has Ford done well? Absolutely. Do I think the worst is over? No-frigging-way.
another recession/crash is going to happen
What makes you think that?
What makes us think that???? How about the cyclical nature of the market? This cycle is compressing due to inflation. The treasury can no longer stave off inflation and taxes are sure to go up sooner than later. This is going to do nothing but stagnate and then contract a fragile market. This has all happened before and history has yet again proved that it repeats itself. This too shall pass, but I think Ford WILL continue being ready to approach the task of staying firmly rooted in good product and creating profit.
All things considered, Ford may be the best run automotive company in the world right now. Now may be the first time in history a person could say that with a straight face.
You could have gotten away saying the same thing back in 1988 when Donald Petersen and his guys were in charge. In fact, Business Month named Ford one of the world’s five best managed companies in 1987.
Ford is strong in Nafta and Europe. It isn’t strong in South America, China, India etc. So it is only strong in mature markets and didn’t invest enough in growth markets. If it wasn’t for carmagedon i would claim that GM was a better run company
you are spot on. The US is doing well for them but in Europe their sales are way off this year, lower than the overall industry decline In China they are not even in the top 10, India they are a small player so far. Lincoln is the next problem. They ditched JLR just when luxury sales are booming globally and they have their best lineup ever. Go Ford, but they have a long way to go yet.
I actually agree with the last half of this post here, as it applies to the US. Additonally, I think Ford gets a lot of positive regard due to the fact they didn’t take bailout money. I don’t know if that necessarily implies that the cars are better than the competition, but I feel it is a large reason why many domestic intenders consider Ford over GM and Chrysler. Of course Ford has a mountain of debt, and if the economy farts again, and people pull back, it’s going to bite them.
Here’s hoping for Gas-X (anti flatulence meds) for the US economy for 2011 and beyond!
A large portion of Ford’s current US success is due to the last decade of their work in Europe, so in a sense, it’s just a continuum of diversification.
They can’t fly, they sold the corporate jets, remember?
I like how a lot of Ford’s profits are going towards paying down debt early. Money in the bank is a good thing, but if the market tanks again, it’s probably going to be more beneficial to have lower fixed costs due to reduced interest payments. I think it was a missed interest payment that really pushed GM’s troubles into the public eye.
I do not buy the big Detroit comeback story. The latest CR reliability result shows every Toyota and Honda brand is more reliable than every Domestic brand.
The real story is the left wing Obama loving media is trying to show the voting public that the massive billions pumped into GM, Ford, and Chrysler, as well as the suppliers ( guised as a small business initiative ) was smart. The truth is this money was a big favor for the UAW.
The Ford brand ranked 10th out of 27th reliability in CR. Not a good result.
Now now, open your mind, turn off O’facist and give the product as unbiased look as you can. Many have and realize that the toaster testers at CR are out of their league.
Not a great result, but it’s still much better than average. I may never see a Scion on fire, but even if I do I still won’t piss on it.