Ford Motor Company
 

It is currently trading at $8.55 per share. The last 5 years have been pretty tough for Ford but it appears that they are taking strong measures to try and return to profitability. Anyone else think this stock seems like a definite but right now? I think over the next 5 years they will return to profitability and their stock will soar.

Edit: stock symbol is F

Re: Ford Motor Company
 

I believe in the next decade Ford will no longer exist as we know it today. They must downsize and eliminate union labor to survive and I'm not at all confident they will be able to bite the bullet.

Re: Ford Motor Company
 

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I believe in the next decade Ford will no longer exist as we know it today. They must downsize and eliminate union labor to survive and I'm not at all confident they will be able to bite the bullet.

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Essentially their blue collar workers cost around $100 per hour, over $100k per year, when you factor in medical/pension costs. They even have workers they are forced to pay $100k per year not to work (in the Jobs Bank). Asian car makers can build substantially better, cheaper cars inside the U.S. than American car makers can, due to these legacy costs. There was a recent article on Toyota's new big truck (built in San Antonio) and how Toyota was loading up the base version with extras so they could hide how cheap it was in relation to the domestic trucks.

I think the union leadership is enlightened enough to realize that this steady stream of downsizing the work force (Chrysler announced cuts of over 10k workers today) will never end until they give the big 3 reasonable contracts. It's unclear if it will happen outside of a bankruptcy filing though. The problem with downsizing is you produce fewer cars to amortize the legacy pension and medical costs over, so your cost situation gets worse, as you shrink it's like a rock rolling down hill gathering speed.

Re: Ford Motor Company
 

There is no incentive for the union to change, because the car companies won't be competitive until the workers are paid fair market wages that they could get anywhere. Its better for the workers to milk the company into bankruptcy, and then go find a crappy job rather than take the crappy job now, just so the company can survive.

Re: Ford Motor Company
 

I am watching Ford too, I swung it and a nice little a profit before earnings were announced.

The company has a lot of problems, and I think the optimism you have has by and large already been priced into the stock.

I would not buy Ford right now, but look for good buying points in the future when this new CEO optimism begins wear thin on people who are impatient for gains. I think $8/ share is the absolute max you should consider paying, and I think you can get it even lower with a little bit of luck.

Re: Ford Motor Company
 

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There is no incentive for the union to change, because the car companies won't be competitive until the workers are paid fair market wages that they could get anywhere. Its better for the workers to milk the company into bankruptcy, and then go find a crappy job rather than take the crappy job now, just so the company can survive.

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I think the Toyota workers still earn a top rate of $35 per hour, which seems similar to the Ford workers. The difference is that Ford's locked into much higher benefits, the jobs bank program, and the legacy pension/medical costs. Also, I think the domestics get stuck paying lots of over time due to the inflexible contract.

My guess is Toyota workers are making $40 per hour including benefits. That's a much better than what crappy jobs pay. But I can see why, if a worker can take home 50% more by sticking with the status quo, and his dad (a retired Ford worker) still gets his lucrative pension and medical plan, why compromise?

The problem is once the bankruptcy filing happens, the judge cuts dad's pension by at least half, and forces him to pay his own medical costs for the rest of his life. The UAW's only hope to save some of that pension/medical benefits is to compromise now, before it's too late.

Re: Ford Motor Company
 

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I am watching Ford too, I swung it and a nice little a profit before earnings were announced.

The company has a lot of problems, and I think the optimism you have has by and large already been priced into the stock.

I would not buy Ford right now, but look for good buying points in the future when this new CEO optimism begins wear thin on people who are impatient for gains. I think $8/ share is the absolute max you should consider paying, and I think you can get it even lower with a little bit of luck.

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Maybe Im just crazy but when I see Ford at $8 a share something clicks in my head saying "Wait isn't 8$ super low for a huge company like Ford?" Maybe I am overly optimistic like you say tho.

Re: Ford Motor Company
 

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[ QUOTE ]
I am watching Ford too, I swung it and a nice little a profit before earnings were announced.

The company has a lot of problems, and I think the optimism you have has by and large already been priced into the stock.

I would not buy Ford right now, but look for good buying points in the future when this new CEO optimism begins wear thin on people who are impatient for gains. I think $8/ share is the absolute max you should consider paying, and I think you can get it even lower with a little bit of luck.

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Maybe Im just crazy but when I see Ford at $8 a share something clicks in my head saying "Wait isn't 8$ super low for a huge company like Ford?" Maybe I am overly optimistic like you say tho.

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I was waiting for this to come up. Ford is so low for a reason. The exact reason you think that it is low should be the exact reason you keep your money away from them.

Re: Ford Motor Company
 

Just because a stock is low doesn't mean there isn't a way for it to drop any further.

A company needs three important things to survive: a compeititve advantage, good management, and a good capital structure. I'm not sure if Ford has any of those things.

Re: Ford Motor Company
 

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I am watching Ford too, I swung it and a nice little a profit before earnings were announced.

The company has a lot of problems, and I think the optimism you have has by and large already been priced into the stock.

I would not buy Ford right now, but look for good buying points in the future when this new CEO optimism begins wear thin on people who are impatient for gains. I think $8/ share is the absolute max you should consider paying, and I think you can get it even lower with a little bit of luck.

[/ QUOTE ]

Maybe Im just crazy but when I see Ford at $8 a share something clicks in my head saying "Wait isn't 8$ super low for a huge company like Ford?" Maybe I am overly optimistic like you say tho.

[/ QUOTE ]

I was waiting for this to come up. Ford is so low for a reason. The exact reason you think that it is low should be the exact reason you keep your money away from them.

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I was thinking the reason its so low is that people are generally irrational and tend to over react to news about companies profits or losses. Since they posted huge losses people over reacted and sold sold sold. Perfect time to buy buy buy or am I way off base?