How Long?

[FordBuyer]

I see that Bob King of the UAW said that Ford only has about two more years of staying out of bankruptcy if sales don't pick up. I was wondering how many on here agree with that assessment. I tend to agree with it.

 

As a Ford stockholder and investor in another Ford investment, my financial adviser has been telling me last two years to get out. I've been stubborn as up to last year of so I just couldn't imagine Ford going bankrupt with Visteon avoiding bankruptcy and Ford having over $20 billion in cash.

 

But after many, many months of reduced sales and this year so far worse than last, I do see a possible bankruptcy ahead. I hate like hell to even bring it up, but it seems to be distinct possiblity. I will always be a Ford customer to the end, but not investor if Ford cannot turn itself around by end of next year. The end of 2008 is as far as I can go without any improvement in sales.

 

I'm sorry, but if no more new products are announced by Jan. of 2008, I don't see any heavy lift new vehicle or vehicles that will significantly increase auto sales for Ford. Ford cannot go on losing 8% to 12% of its sales every month as compared to last year. This just can't go on much longer. And if Ford needs to throw money at cars in order to sell them, then all that does is skew their sales numbers and is meaningless.

 

Every month on here we all look for silver linings in these dismal sales figures, but if you look at big picture it is dismal. A couple lines get increased sales which is always offset by dismal numbers in other lines like Explorer or somewhere else. The overall picture is never good. Both retail and fleet numbers suck.

 

I don't know how many stockholders there are on here ( I suspect a lot), but I'm interested in how many on here are cosidering how much they can take before it's time to pull plug. In other words, what is your time limit on investing in Ford. I'm sure not going to wait for bankruptcy if the worse happens and be stuck like KMart stockholders and investors.

 

I pray to God that Ford will make it, but as of yet I have seen no tangible evidence that they are. I have hope and I do try to hold onto the silver linings in these sales figures, and I will keep on buying Ford products and help others do so as well, but everyone has their limits. And mine is end of 2008 as far as investing in company goes. I know that Ford will really be on the ropes if they lose someone as loyal as me. Let's all hope that doesn't happen, but hope will only take you so far in life. Ford seems to be on right track, but evidence is not complets and those damn sales numbers have to improve significantly SOON.

[FLLMTR]

Don't fret. Ford will sooner go private than go bankrupt. In such a scenario, it means that the stock holders will not lose any more than has been lost over the past several years.

 

While sales are flat (or falling) relative to Toyota, Ford is holding the line on prices. One trick is maintaining the residual value of the Edge, Taurus, and Fusion by maintaining quality and safety. This will make lease prices more competitive on the East and West coasts and keep sales on pace.

 

I also think the Flex will be a great product that stands out while adding a level of refinement, fuel efficiency and functionality that the families are looking for.

[FordBuyer]

Don't fret. Ford will sooner go private than go bankrupt. In such a scenario, it means that the stock holders will not lose any more than has been lost over the past several years.

 

While sales are flat (or falling) relative to Toyota, Ford is holding the line on prices. One trick is maintaining the residual value of the Edge, Taurus, and Fusion by maintaining quality and safety. This will make lease prices more competitive on the East and West coasts and keep sales on pace.

 

I also think the Flex will be a great product that stands out while adding a level of refinement, fuel efficiency and functionality that the families are looking for.

 

 

I sincerely hope you are correct, but in the meantime we have to face those dismal sales figures every month of 10% more sales loss.

[4d4evr-1]

Bought my first shares in '93 @ about $24. Continued to add thru '03. My adviser finally convinced me to sell all May '06 @ 7.90. Have done well with other investments since then, but feel it might have been a mistake. I believe, unless there is other info unknown that Ford has turned the corner. The quality improvements, better designs, different types of vehicles, Ford should see a steady increase. Remember the numbers -8% can all be explained by the old Taurus being dropped.

[ZanatWork]

The new ideas are working.

 

Fusion-every analyst says it's doing great, so ignore Pioneer.

Edge-selling ahead of projections

Taurus-we'll see, but a partial month looked pretty good indeed.

F-Super Duty- holding F-series sales until the F-150 debuts

Focus-laugh, but the existing car's sales are up. The reworked one might just improve on that.

Mustang-gets first real upgrade next year (I think), has been pretty good for the company.

 

Y'know what? The Five Hundred and the Freestyle should get some props, as they had to soldier on without the new motor and with the older, conservative styling theme.

 

Lincoln's up. The Expedition has been up for what, 9 months? The Escape-which was CRUCIFIED here-is up sharply. Retail sales are up.

 

I know the negatards will find things to be doom-and-gloomish about...that comes with their brand o' brain damage. The truth is, however, that some things are showing true signs of progress and there's more coming.

[LincolnV]

I'm confident that the company will be here in two years.

 

I think Ford has a good management team and some exciting products coming up. I also think that they are making decisions that are necessary - no matter how difficult they are to make (selling certain divisions).

[jpd80]

FordBuyer,

What is more important to you than sales is the quarterly financial results, Ford's ability to increase its share price that's the test. Imagine if you listened to your broker and sold at the low point of $6.80?

I'm no expert but I see Ford Motor edging higher every quarter, at about $9.10-9.60, they're a long way from the $6.80 low of last year, so you've recovered a little so far.

 

I understand your skeptisim but it's your money and if the stock rises after you sell, maybe you take a worse bath than if you stay put. They had an extremely promising Q1 result, better than most analysts expected. Unless you expect Ford Motor shares to nose dive before 2008, it may be worth seeing the reaction to Q2 first, that's only a few weeks away.

 

As with many here, I hate seeing Ford bleed money to save itself but take heart in Mullaly, he is leagally bound to make every effort to improve the value and stock price of Ford Motor.

 

Don't forget, Ford has just spent $11 Billion in the last 2 quarters to cut staff and make itself more efficient to improve their bottom line. The stock market knows this and has reacted favourably.

 

Hypothetical, if the stock is at $12.00 or there abouts by 2007 Q4, will you still sell?

 

(concern yourself with stock price, not sales - stock price is your money)

Edited July 8, 2007 by jpd80

[mackinaw]

For what it is worth, the Wall Street analysts, who spend their lives analyzing spreadsheets, figure Ford's turnaround will take between five and seven years. The key word here is "patience."

[ANTAUS]

If Bob King of the UAW is stating that fact, it's more or less because they are going to try and screw Ford more than they already have, so thats my first assessment.

 

And as I've stated previously, the auto-market in the U.S., will be quite similar to that of Europe. Not so much about mini-cars, but more about competitiveness in market share. In Europe, 8-9% of the total market is quite amazing on it's own considering all the companies there. And I predict the same will occur in the U.S. as more manufacturer's (particularly Chinese ones) start making an impact. The question isn't really who, rather than when.

 

I do see Fords market share stablelizing around the 13-15% mark. And thats after they lower their fleet sales. I hear so much about "lowering our dependence on fleet sales", yet the numbers are otherwise.

 

I do see Fords globalizing platforms and engineering as possibly a key factor in keeping themselves afloat. And a continuing effort on providing value, improving quality, reliability and residual value as being key to regain customers. IN essence Ford IS reinventing themselves. It's more a matter of how quickly it can be accomplished.

 

I would applaud if Ford went private. As I understand it, they don't need to deal with Wall Street and report much of anything, and they CAN get rid of the UAW if need be.

 

But the low number of new products being launched in the next year or 2, don't help moral or perceptions much. The MKS and Flex won't bring in the masses. The B-class vehicles can't come soon enough and even then, maybe a totally new model here and there wouldn't hurt either. And this is just to make up for the lost sales of the other vehicles that people are migrating away from such as CV, Explorer, etc.

 

But in comparison to GM and DCX, I do see Ford as being ahead. Not so much in terms of TODAY, but they are seeing the big picture of the next few years.

[wescoent]

Ford just needs to stablize market share (which it has), and be able to turn a yearly profit when all is said and done. If they can cut costs and create that UAW retirement fund, they're set, and good to start growing again.

[focus05]

Really, the biggest concern for a stockholder should probably be how much Ford can cut costs. The pressure on the NA market is bad. We know this. If NA fails, so does Ford. But, you cannot forget that FoE is selling several percent over last year to this point. And they are selling expensive vehicles, not just the Fiesta. Further, the exchange rate (Euro to dollar) is making every vehicle sold there even more revenue for Ford when it records it in dollars. Sure costs are going up there, but from a strict revenue versus cost perspective, Ford is enjoying slightly higher revenues on worldwide operations thanks to the terrible dollar. With $2-3 billion in cost savings logged by COB Dec. 31, Ford financial perspective looks much better.

 

Now, the key is that, yes, Ford's marketshare must stablize in the U.S. There are small bright spots, but it will probably take until 2010 until Ford has a lineup that will keep its sales in the 13-15% long term without heavy discounting. In the meantime, small bright spots help keep things level overall.

 

I think we'll see sales tick up or at least stay flat for the rest of the year on a retail basis. Ford only has 50,000 more rental fleet sales to cut, so overall sales will probably fall 4-7% every month after August except November which hopefully will be flat to up on weak year ago numbers.

 

The first quarter of 2008 is going to be painful, I think. Analysts will be looking for flat sales overall and I will be surprised if Ford can manage that. However, with the debut of the Flex and (hopefully Fusion and new drivetrain Escape and F-series) in Q2, Q2 will probably be flat with much stronger Q3 and Q4 (sales possibly up as much as 5-7% imo). 2008 should end slightly better than 2007 as long as products don't take the entire year to debut. If the Fusion doesn't debut until September or Escape's new engines don't arrive until fall or F-series is delayed, expect sales to suffer significantly because of a mix of old product and expected new product.

 

If the new 2009s are well-received, I would expect 2009 will be up slightly over 2008, and the same for 2010 over 2009 if Ford's mini-cars and other updated products do well - and Ford will be officially stablized. This assumes no shocks to the market (further gas price hikes, recession, terrorism, etc) that will shrink the industry's car sales overall.

 

A lot of pain left, but I don't think Ford can see lower sales on the order of 8-12% forever if its new products are even half-way decent. I know this downward slump has everyone in a funk, but they've cut 89,000 rental sales in six months and their F-series is taking a beating. Those two combined represent probably 125,000 of Ford's 175,000 lost sales. That's significant. By the middle of next year, if Ford is on the ball (I know, sometimes it's a lot to ask) things will look much better.

[TomServo92]

Lol. You can't ignore me. I'll just get more obnoxious.

 

Trust me. I can do it. :shades:

 

I have absolutely no doubt in mind about it....

 

Edited July 8, 2007 by TomServo92

[silvrsvt]

How many cars/trucks does Ford have to sell in a year to keep its 13% market share? I think thats the goal with trying to expand it to 15% after making a profit in 09.

[FordBuyer]

How many cars/trucks does Ford have to sell in a year to keep its 13% market share? I think thats the goal with trying to expand it to 15% after making a profit in 09.

 

Thanks for all the responses guys. I am hopeful that Ford will turn it around as they always have, but there are a lot of worrisome trends also. In my view, Ford not only has to increase its auto sales and end these double digit declines, but stay away from heavy rebates and money losing fleet sales. I know that they are implementing plans to do this, and have done better that has been reported many times before.

 

My biggest worries for Ford are:

 

Lack of new product and seemingly no sense of urgency to commit to new product

Rumors that Ranger, Crown Vic, and Lincoln Town Car will be gone in couple years if not sooner with no replacements and 200,000 sales gone

Fact that Ford is running out of time if it is to prosper in environment that will only be tougher

Too many Ford Dealerships that will cost Ford billions to close

New, much more stringent CAFE rules coming and its affects on trucks and bigger cars

Will Ford have the capital to produce innovative, revolutionary products to meet CAFE rules

Will dominant Toyota start rebate war like GM did a few years ago and cause everyone to follow suit with disasterous results for much weaker Domestics

Will the housing recession continue to get worse and bring down rest of economy

 

My biggest hopes:

 

That Ford will get very competitive UAW agreement that will mean new prouct for plants Ford has and possibly new or refurbished plants that have already been mothballed

That the Fusion will continue to become biggest domestic player in mid sized field with 200,000 annual sales and Taurus will be consistent 120,000/year seller

That the new Escape can be the second heavy lifter for Ford after F-Series

That the new 2009 F-150 will leap frog the competition and be the pickup everyone wants

That Ford announces a high profile new vehicle next year like RWD Interceptor that will grow their sales

That Ford replaces the Ranger with new small pickup that is very cool and gets segment leading fuel mileage.

That Ford brings its new F-150 diesel to market by late next year and announces new hybrids for Edge and Taurus

That Ford puts new diesel in its Expedition and Explorer

That 2008 is a much better year economically and lifts auto sales so that Ford can get healthier

Other new product announcements that are complete surprises and very hopeful

[TStag]

Surely with all the closure's Ford NA have announced they must be getting closer to break even? I think Ford will begin to Stabalise fairly soon. 2008 may be a bit bumpy, but in 2009 I think they will turn a profit.

 

I'm watching any Land Rover sale with interest. If Ford take a low price (less than 3 billion dollars) then I think that indicates how much trouble they are in and it may indicate more financial woes than earlier thought. If they get a high price (about 8 billion dollars) then frankly that's good business.

 

On a positive note the EU is currently booming so expect car sales to rise there. Europe and the UK have been in an economic boom for a while. The Pound and Euro are a record highs against the dollar. This also make EU exports more expensive so that may also help Ford NA to compete.

[Joe771476]

I said this before: There are just too many players now for Ford and GM to ever recover their 50 and 25 percent shares respectively like in the good old days. When McDonald's is the first on the corner, they get it all. When, BK, Wendy's and Arby's set up on the other three corners, they basically share the traffic it equally. Ford and GM will level off, but can they survive at those levels? One more thing: Are all the employee vehicles in the parking lots at Ford Motor Co. plants, brands that are Ford owned? If not, then yes, Ford will fail. The mindset has to start there first! Ford employees must show their friends, neighbors and relatives that they believe in their own fruits!

Edited July 8, 2007 by Joe771476

[ZanatWork]

Lol. You can't ignore me. I'll just get more obnoxious.

 

Trust me. I can do it. :shades:

 

 

Didn't want you to think I'd forgotten you.

 

Besides...as Ford will likely have to build other models outside the US, our best exchanges may be ahead of us! :happy feet:

[LSFan00]

Ford will be fine when they launch the Mondeo and C2 Focus in NA in 2011-2013, selling alongside the Fiesta, Flex, Taurus, and brand new Ranger. The original Taurus drivetrain will still of course be selling well with drum breaks in the Escape.

[Edstock]

On a positive note the EU is currently booming so expect car sales to rise there. Europe and the UK have been in an economic boom for a while.

 

Plus Ford has a Focus-based CUV coming inspired by the Iosis-X and Land-Rover is rumored to have a 2-door LR-2 coming.

 

[Automotive Paint]

As a relatively loyal Ford consumer who also invests himself and watches or listens to CNBC daily my gut tells me unless Ford simply screws you the workers on your next UAW contract Ford has less than 2 years. I'm not wishing bad luck on anyone but just as Delta's bankruptcy was a given several years in advance Ford's looks inevitable as well.

 

I hate to hear about your situation Fordbuyer. When my former neighbor retired out of the ATL plant in the late 90's he had a ton of money in Ford stock and now he simply has a ton of shares. Every time I see him and the subject comes up he says, "When it gets back to $20 I'm going to sell it all." I tell him it will never happen in his lifetime though it might in his grandkids (who he is willing it to).

 

The sad part about this is since the early 90's when I was in HS when we would discuss Ford and his bragging about its share price I would tell him the biggest mistake he and his generation continue to make is investing in the company they work for. The company already owns your ass 40+ hrs per week so WITF would you let them control your personal financial future as well?

Edited July 9, 2007 by Automotive Paint

[jpd80]

That would be true if Ford was only Ford North America.

But it's not, Ford will draw funds from every other division to support North America.

Currency and sales are going gangbusters in Europe at the moment so there will be no bankruptcy or forced sales.

[Savetheplanet]

You guys really think Ford will be stable in 2009 when gas reaches $4 a gallon? Ford has way to many gas guzzlers, your time is over, you had your chance, Ford is a Dinosaur!

[Furious1Auto]

You guys really think Ford will be stable in 2009 when gas reaches $4 a gallon? Ford has way to many gas guzzlers, your time is over, you had your chance, Ford is a Dinosaur!

They also have quite a few gas sippers now too!

[jpd80]

They also have quite a few gas sippers now too!

Yeah, you don't know what can be accomplished until it's law.

Those people in 1975 thought raising CAFE from 13 mpg to 27.5 mpg would kill a lot of cars.

It's just that there has been no small incremental rises in the past 20 years, but

more has been done with emissions so they weren't just standing still either.

 

On another note,

If all new cars were mandatory E85 how would that affect the CAFE numbers?

With higher Compression Turbo engines on E85, the CO2 regs could be met easily.

Edited July 9, 2007 by jpd80

[Noah Harbinger]

I've heard it said that if automakers had focused on increasing gas milage instead of other concerns over the last 20 years, the US could be independent of foreign oil. I don't know how that was calculated, but it's an interesting point of view to consider.