One Discouraging Thought on Ford's Business Plan

I am not trading the automakers right now - there aren't any compelling misvaluations relative to the other industries where I am doing research. Plus, it is just too sad.

At least Ford (F) is presenting a business plan now. This tidbit is discouraging:

Based on current business planning assumptions – including U.S. industry sales for 2009, 2010 and 2011 of 12.5 million units, 14.5 million units and 15.5 million units, respectively – Ford expects both its overall and its North American automotive business pre-tax results to be breakeven or profitable in 2011, excluding any special items.

There is no way that vehicle sales are higher in 2010 and 2011. I believe that anyone calling a bounceback/rebound in most sectors is wrong. Of course, F has to say it; I'm sure otherwise their models would look even more hopeless.

Comments

[stocks2051:]

Your piece makes no sense.

2008 Dec 03 01:54 AM

[Robert Nabloid:]

Keyword that makes everything useless in their plan: "assumptions".

I can see sales going higher later on... but 2009 and possibly 2010 I think sales could be WAAAAY down. What happens if consumers stop buying vehicles for two years until they know if they are going to have a job for sure (nobody knows how secure their job really is yet)... Then in the third or fourth year people start buying cars again? In a case like that, the sales would be very unstable and unpredictable - with almost no sales for a few years and then jumping back to "somewhat normal" sales after that... But two years of almost no sales would cripple most of the companies with respect to cashflow.

2008 Dec 03 02:39 AM