In today's Wall Street Journal, John Stoll and Jeffery McCracken comment on news that Ford Motor Co. could go beyond its original Way Forward plan to further cut costs in: Ford Studies More Plant Closures, Salaried-Job Cuts.
People familiar with Ford's plans say it is looking to close more factories and cut salaried jobs and benefits by 10% to 30%, which would be on top of its original Way Forward restructuring plan that called for white-collar salary cuts of 10% by Q1-06 and 14 plant closures by 2012. Ford has a revenue team and a separate cost-cutting team that are studying ways to improve revenues and control costs not limited only to spending on employees but also in advertising, marketing, and product plans.
On September 14th Ford's board is set to review the new cost cutting plans and according to the people behind this story, Ford will make a public announcement a week later. Ford could announce new products at the same time in order to assuage investor concerns of a weak new-model pipeline. Ford's spokeswoman declined to comment on these plans.
Comment: Ford's (NYSE:F) shares have had a nice run over the past month in which they're up almost $2 or 32% at yesterday's close of $8.17 from a July 20th close of $6.19. The above news of further cost cutting could sustain its shares run. Rival General Motors' (NYSE:GM) shares have mostly moved in the opposite direction over the past month. CNBC TV in recent days has explained the divergence as being a result of GM's huge gains already made on the year and that all things positive may be factored in GM's share price.
Resources: Previous WSJ summaries on Seeking Alpha related to Ford: Ford's Loss Doubles, Ford Mulling Sale of Its Jaguar Unit and Credit Union, Toyota and Honda Stick it to the U.S. Big-3
Investopedia Advisor in "A Contrarian Bull On Ford Motor"
In yesterday's lightning round session on Jim Cramer's Mad Money TV program he said, "You are a genius to buy it at 6.80. ... Ford is done going down. But be careful. I said that about Marvell Technology (NASDAQ:MRVL) and boy was I ever wrong.'
Bloomberg.com in, "Hyundai Says It Doesn't Plan to Buy Ford's Jaguar" cites an emailed statement from Hyundai saying, "We really have enough on our hands. We must rule out any acquisition at this point."