- Highlighted companies: Ford Motor Co. (F), General Motors Corp. (GM), Toyota Motor Corp. (TM)
- Summary: Alan Mulally recently took over the helm at Ford Motor Co. (F). The article brings into focus the challenges he faces in order to turn the company around, and some of the author's suggestions: 1) Restore confidence, both internal and external. 2) Bring flair to poorly selling and unattractive product line. 3) Sell successful European-line domestically. 4) Seven product lines (Ford, Lincoln, Mercury, Jaguar, Land Rover, Volvo and Aston Martin) is too many; Toyota Motor Corp. (TM) only has 3. 5) Make better use of its Mazda stake. 6) Implement global strategy that includes part-replication among cars and reuse in multiple year/models. 7) Reduce fleet sales and purchase incentives that increase production but kill profits. 8) Reduce plants and employees. 9) Do not ditch financing unit; it is its only profitable business.
- Quick comment: According to Cramer, you know a company has hit bottom when all of the elements of a decline are there but the stock doesn't budge. Ford had a huge shortfall, but did not drop in price: "That says bottom." He is also impressed by the new CEO. One thing Ford can't change is their legacy commitment to pensioners health costs, which puts them at a distinct disadvantage to their relatively young foreign competitors. Ben Stevens has questioned whether Ford can survive its current upheaval, but Stephen P. Brown has been a contrarian bull on the company. Seeking Alpha's coverage on Ford includes a full spectrum of bulls, bears, and everything in between.
F 3-year Daily Chart