For those here who are opposed to financial "talk" please forgive me but as an F-150 owner and shareholder what's your "take" on the following:

Shares of F are trading lower this morning after a report in the Wall Street Journal highlighted fears among some investors that the company could face significant challenges even though two of its biggest competitors, General Motors and Chrysler, have filed for bankruptcy. F could see weak profits due to its high borrowing costs, bloated dealership base, and obligations to unionized labor, according to the report.

 

My take is that there will be an organized effort to marginalize Ford to some degree on the part of those who have invested heavily in the success of GM and Chrysler. Ford is still in a much better position financially no matter how anyone tries to spin it. Investors are still jittery about the auto business, and this type of reporting (true or not) will have an impact. Has Ford solved their problems entirely? No, but nonetheless, I think there will be an ongoing effort to prop up the two government backed automakers...

 

F stock is up at the moment.

 

It will be interesting to see if people appreciate the fact that Ford did not take government money or if they will all forget about the GM/Chrysler bankruptcy in 5 years. Hopefully Ford will win people over because they didn't take money and this increased customer base (compared to the other two) will help offset their higher costs.

 

Considering the UAW will be the major stakeholder in GM and a significant stakeholder in Chrysler-Fiat combo (whatever it will be called), labor contracts will be difficult for Ford at best. Given the fact the labor representation is also your competitor (with significant government funding to boot), this issue will be a huge hurdle for Ford to surpass. If there is ever a case for anti-trust action against the UAW, Ford has it. Now that would be a court case I would love to follow.

From what I see with the new Ford F150, creativity and quality are in Ford's realm. The engines are a different issue - they should be more potent. If the F150 are an indication of the direction of Ford overall, I believe the company is on a good track to succeed over it's Detroit (or government supported) competitors.

The biggest thing stopping me from investing in Ford common stock is the UAW. They along with their government support represents real danger to Ford, especially if Ford continues to be more successful with new/refreshed products consumers are willing to buy and the Detroit/government competition stumbles badly.

Toyota is in a mis-managed situation currently but working their way out of their own mess. Look for Toyota to become the dominant automaker in the US causing some concern for Ford. Right now, Ford has a great chance to attract consumers that are turned off from GM's bankruptcy and even Toyota's slide in quality.

Ford stock looks promising and maybe on a pullback, it's a good speculative play in my humble opinon. As for investing in it for a long time, I doubt it. GM gets to throw their liabilities away and so does Chrysler but not Ford. True, Ford's liabilities are reduced for now, but that remains open for change at the next round of labor talks.

 

Another thing to remember is that Ford was proactive and GM was retroactive. An example of that was their sale of their BBJ (Boeing Business Jets, 737's) to smaller aircraft. They used their aircraft correctly, but they could not justify the cost.

I also thought that Ford went to the UAW two years ago and asked to work as partners and not adversaries for the common good of the whole company.

My fear is not their liabilities as both Chrysler and GM will have to reestablish credit, but that GM will be give unfair treatment in government bidding process. Meaning that municipalities will have to buy from GM no matter what the cost as it needs the money for restructuring.

 

I do and have told people that way including my die hard Chevy Brother-in-law. No matter the discount I will not buy either a GM or Chrysler product.

 

These are exactaly the reasons I bought a 09 F150 over GM. The last Ford I owned was a 94 F150. I have had numerous cars and trucks since then and they have all been GM. With the UAW and all the government bailouts I will never buy another GM...EVER. You know the only good thing to come out of all of this is that Ford is truly building a superior product and had all this not happened, I probably would have never crossed the road to find out.

Jeff

 

Some more points to consider: Ford doesn't have any more finacial room to wiggle - they mortgaged everything they could before the downturn, fuel price continues to go up, the sales of trucks will be affected, they are actively revamping their passenger car lineup for consumer desires (styling plus fuel economy), and there's too much overlamp of product between Mercury and Ford. Slapping a different grill and crinkling the sheet metal slightly different doesn't make too much of a distinction between the two lines. Ford needs to revisit the idea of Mercury and adjust the product offering.

Anyways, I think there's upside potention in F stock but only in a pullback for a short term investment and definitely not an investment for a longterm position, in my humble opinion. The Koreans have massively increased their quality and shortly, the Chinese automakers will be exporting cars to these shores. Honda will be a force in the small to mid size car market and so will Toyota. Competition will be fierce in the coming years from abroad and domestically from the government backed car companies formerly known as GM and Chrysler.

 

I bought some F back in November '08 when the price was $1.46. I couldn't resist at that price! Right now, stock is at $5.69 so, that's about a 290% increase in value in 7 or 8 months.

 

That's a great return in so short of a time.