Ford Motors is a publicly traded company and one of the largest automobile manufacturers in the world. However, the company has experienced some recent turmoil due to the overall state of the economy and automobile industry. The board of directors and management have had some recent changes and need some time for some adjustment.
The stock price closed on the first day of class, May 27th: $5.40
The stock price closed on the last day of class, June 26th: $5.53
This price is up from a low in March of 1.70.
I would be hesitant to work for Ford Motors right now just because the overall state of the automobile industry. I predict that Ford will either eventually crumble over the next two years or become the leading market share leader in North America if they survive.
I would not recommend investing in Ford Motors. Even though the stock is still at one of their all time lowest prices, their are too many other markets (New Asia) that offer safer and faster growth investment opportunites.
Three lessons learned from Ford Motors that could be used for future strategic management decisions are:
1- Not seeking goverment bailouts (when everyone else is) can increase investor confidence
2-Liquidity = survival in volatile economic times. Ford has been able to survive by cutting costs and increasing liquidity.
3-Innovation is your company's "life blood". Innovation can quickly seperate you from the competition in touch economic times.
Sunday, June 28, 2009
Friday, June 26, 2009
DEARBORN, Mich. (Associated Press)
Ford Motor Co.'s (F, News) top executive for auto parts purchasing said Wednesday the number of the automaker's suppliers that are under distress, bankruptcy protection or under observation has more than doubled in the last year.
Tony Brown, Ford's vice president for global purchasing, declined to give an exact number of distressed suppliers, but said in a briefing that more suppliers are in the category of being monitored as slumping auto sales force automakers to slow production and order fewer parts.
Brown said he had several teams of people looking at ways to aid distressed suppliers operationally, as Ford has limited funds to financially support the ailing companies.
"You could expect Ford to take the appropriate action given the situation and it could include providing financing," he said. "And it could include simply having an engineer go in and clean up their process."
Ford Motor Co.'s (F, News) top executive for auto parts purchasing said Wednesday the number of the automaker's suppliers that are under distress, bankruptcy protection or under observation has more than doubled in the last year.
Tony Brown, Ford's vice president for global purchasing, declined to give an exact number of distressed suppliers, but said in a briefing that more suppliers are in the category of being monitored as slumping auto sales force automakers to slow production and order fewer parts.
Brown said he had several teams of people looking at ways to aid distressed suppliers operationally, as Ford has limited funds to financially support the ailing companies.
"You could expect Ford to take the appropriate action given the situation and it could include providing financing," he said. "And it could include simply having an engineer go in and clean up their process."
Sunday, June 21, 2009
Ford's Cost Reduction
Here is a cool summary of the overall cost cutting Ford has undergone in 2008 (from www.seekingalpha.com):
Cost Reductions:
* Reduced automotive structural costs by $1.9 billion vs $1.3 billion in 2008
* Reduced automotive debt obligations by $10.1 billion
* Lowered annual cash interest payments by over $500 million (note that this is negligible since management indicated credit facility negates net benefit of this expense)
* Lowered annual U.S. labor costs by $500 million
* Manufacturing and engineering costs were over $800 million lower
* Spending related costs improved by about $200 million (lower depreciation)
* Pension and retiree health care expenses were $300 million lower
* Overhead costs were over $300 million lower (achieved via layoffs)
* Advertising and sales promotions were about $300 million lower
Total cost reduction as reported by management: $1.9B. The company forecasts a full-year structural cost reduction of over $4 billion.
Cost Reductions:
* Reduced automotive structural costs by $1.9 billion vs $1.3 billion in 2008
* Reduced automotive debt obligations by $10.1 billion
* Lowered annual cash interest payments by over $500 million (note that this is negligible since management indicated credit facility negates net benefit of this expense)
* Lowered annual U.S. labor costs by $500 million
* Manufacturing and engineering costs were over $800 million lower
* Spending related costs improved by about $200 million (lower depreciation)
* Pension and retiree health care expenses were $300 million lower
* Overhead costs were over $300 million lower (achieved via layoffs)
* Advertising and sales promotions were about $300 million lower
Total cost reduction as reported by management: $1.9B. The company forecasts a full-year structural cost reduction of over $4 billion.
Friday, June 19, 2009
The Balance Sheet
Balance Sheet Analysis:
From a financial balance sheet analysis, Ford would fail as a healthy investment. Graham/Dodd would probably not have taken a second look at this company. Its debt/equity is poor; it reported negative income since 2006 (it was last profitable in the year ending December 31, 2005); the automobile industry is assumed by all to be virtually non-existent.
To coin a phrase that supported the March-June 2009 40% global stock market rally, Ford is doing "less worse" than what the market thought. In fact, it is doing better than its competitors.
GM and Chrysler, as it emerges from bankruptcy, will be distracted from making bold and key decisions. Investors who have written off Ford also believe that these bankrupt companies will undercut product pricing. People thought this too, before the bankruptcy. The thing is, it never really happened. At that point, the fate of the other "big two" was sealed. Now, GM and Chrysler have too many owners and it is under government intervention and supervision.
From a financial balance sheet analysis, Ford would fail as a healthy investment. Graham/Dodd would probably not have taken a second look at this company. Its debt/equity is poor; it reported negative income since 2006 (it was last profitable in the year ending December 31, 2005); the automobile industry is assumed by all to be virtually non-existent.
To coin a phrase that supported the March-June 2009 40% global stock market rally, Ford is doing "less worse" than what the market thought. In fact, it is doing better than its competitors.
GM and Chrysler, as it emerges from bankruptcy, will be distracted from making bold and key decisions. Investors who have written off Ford also believe that these bankrupt companies will undercut product pricing. People thought this too, before the bankruptcy. The thing is, it never really happened. At that point, the fate of the other "big two" was sealed. Now, GM and Chrysler have too many owners and it is under government intervention and supervision.
Tuesday, June 16, 2009
John McCain "tweets" that he's buying a Ford hybrid
WASHINGTON (AP) -- Former Republican presidential nominee John McCain is getting a new set of wheels.
The Arizona senator said on his Twitter feed Monday that he was buying a new Ford Fusion Hybrid. His office says he's getting the 2010 hybrid in silver and was impressed by its fuel-efficiency.
The hybrid gets 41 miles per gallon in the city and 36 mpg on the highway. McCain's spokeswoman says the senator was "sold when he left the parking lot."
McCain is replacing his Cadillac CTS, which he has used to drive around Washington, D.C.
The Arizona senator said on his Twitter feed Monday that he was buying a new Ford Fusion Hybrid. His office says he's getting the 2010 hybrid in silver and was impressed by its fuel-efficiency.
The hybrid gets 41 miles per gallon in the city and 36 mpg on the highway. McCain's spokeswoman says the senator was "sold when he left the parking lot."
McCain is replacing his Cadillac CTS, which he has used to drive around Washington, D.C.
Sunday, June 14, 2009
Don't Buy Ford Stock????
Here is an interesting article from USA today that is cautioning investors from buying stock in Ford Motors.
http://www.thetruthaboutcars.com/usa-today-dont-buy-ford-stock/
http://www.thetruthaboutcars.com/usa-today-dont-buy-ford-stock/
Saturday, June 13, 2009
Friday, June 5, 2009
The Car That Could Save Ford
A nice article from NewsWeek that discusses a new model of car that Ford has high hopes for:
The Car That Could Save Ford
The Car That Could Save Ford
Wednesday, June 3, 2009
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