I'm looking for the bottom too. I'm just not sure they're really going to pull it out. <snip>
It depends on if Mulally runs the Ford family out of the board room or not. If the Fords keep meddling, FoMoCo is finished forever.
Your method of spotting the turnaround, such as sales figures of the eye, or seeing black folks driving 300's, etc., might not be the smartest, but the behavior of the stock sure says that other people think it's turning around too. <snip>
Well, those are "rubber meets the road" features, and they are relevant and real...the market, at least in October, was right for Ford, bad for GM and DC, not so hot for Toyota and Honda. One thing the market is figuring out for itself is that a Fusion offers equivalent car vis à vis a Camry for about $3K less, and doesn't have the still-vanilla visage and cachet of the Camry name. One GOOD month doth not a turnaround make, but it may make for a good, small, short play.
As it is, Ford has enough cash to get through, IF Mulally wins his battles with the Ford family. If not, down the crapper they go...taking common stock holders with them. Also, do not forget these two factors. First, Ford's pension obligations aren't nearly as onerous as those of the horrendously bloated GM. Second, there will be regime change in Washington, despite what shills like Larry Kudlow and kOOks like Flush Limpdick say. Should that be reality, the Big 3 may eventually get Federal Pension Guarantee Board partial pension fund relief in return for, say, government mandated fuel cell or other alternative fuel development and marketing projects. Bill Clinton has already advanced that exact idea, and it has support of the minorities in both the House and Senate now. Due to mismanagement by the Bushies, FPGB is now severely under funded, and that can be rectified as soon as the US pulls out of the Iraq quagmire/money pit. When the Dems become the majorities, the idea will get a lot more ink but no action, due to veto pen power by Bush. Once Bush is gone, it could quickly become a reality, thus freeing participating manufacturers from billions in unfunded pension obligations.
This benefits GM more than either Ford or DC, surely, but GM has other endemic problems that are larger than their pension under funding crisis...their own corporate "culture." GM, so far, as proven resistant to change, only giving shareholders lip service so far that they really can do so. A record of botched new model roll-outs, poor quality, refusal to accept the end of the petroleum era in terms of product development and unintelligent plant closures show they're continuing to reward stupidity over at the "RenCen" HQ of GM. I do believe, however, especially with the pullout of Billy Ford, that major Ford powers-that-be are genuinely concerned about the direction and management of the company. Remember, King Henry II almost tanked Ford in the late '70s and early '80s before he got tossed out, pushed into a drunken retirement not-so-gently by William Clay Ford and other family members. Ford came back to really light a fire in '84 with the Taurus and Tempo roll-outs which set GM on its corporate ear. However, complacency and family meddling again started to sink the SS Ford to where they are now, but the pickup in Fusion sales, as well as major shutdowns of useless F-150 and Expedition/Navigator assembly lines, shows that Ford is taking the major market shift seriously now. You'll note that Ford's backlog inventory of trucks and gas guzzler SUVs is less than half of DC's. Those are Chrysler products packing the fairgrounds and storage lots all over Michigan...not Fords.
I've heard estimates of a floor being anywhere from $2 (unlikely) to $8 (somewhat likely.) Reality is probably that it'll form a bottom around $7, and then trade sideways until a real economic recovery is obvious, not the fake one happening in the present. From there, it either climbs up, or the company goes under from mismanagement. The one I REALLY worry about going under is GM. Their unfunded pension obligation exposure is roughly thrice that of Ford's, and they do not seem, at least from the outside, to be making any progress toward fixing their long-festering management problems at all.
Recent GM bright spot which hasn't hit the press yet: The Chevy Malibu "hatchback sedan." Dealers can't keep them in stock, and I've seen them all over the place just in the last few weeks. The regular sedan version is a slug, but is outselling last year's version according to GM's sales figs. Also picking up for GM: The HHR has finally started to sell somewhat well. This is bad for DC, as sales of this are direct defections from the PT Cruiser market.
Further signs of American stupidity: SUV sales were up in October from all three makers. Evidently, idiots think the decrease in oil prices is somehow going to last past November 8.
