icandoitdon

The Ford Debt Disaster Continues

it's not just about unions...it's about management, who agreed to every union contract ever signed. management who, year after year, paid out fat dividends to shareholders instead of retaining earnings for reinvestment. management who produced too many look-alike brands and models for too many years. management who, ignoring the lessons of the first oil shock of the 1970s, put all it's eggs in the SUV/minivan market because it was more a more profitable niche. even in that markets, japanese models are far more fuel efficient than their american counterparts. look at any quality survey of the past 30 years and you will find american cars in their usual slot as also-rans, far below japanese models. it's a gap that american manufacturers have never been able to close. domestic market share of the u.s. manufacturers has steadily eroded and it's picking up speed...47% share in early 08; about an 11 point drop in the last 4 years alone.

as for kirk kirkorian, even investors with good track records make stupid movies.

it is highly likely that the u.s. automobile industry will need federal help to survive. if they're willing to save the morons on wall street, fannie, freddie, et al., i suspect they'll be willing to throw a few sheckels to once-proud american icons ford and GM. but as for long term investment, there is no evidence of performance to suggest that these companies have what it takes to turn it around. the GM board's pronouncement that it has "faith" in rick wagoner suggests to me that they don't have a clue.