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Ford pulls its weight without bailout funds - Washington Times

Ford pulls its weight without bailout funds


By The Washington Times

Monday, June 8, 2009

Amid bankruptcies and forecasts of Detroit doom, one of the Big Three is hanging tough. Ford tough. Once dened by the revolutionary Model T, Ford is motoring on without federal bailouts, Treasury-led restructurings or bankruptcy judges. Ford Motor Co.s U.S. market share grew last month, and sales surpassed even mighty Toyotas. Fords shares have outperformed those of Honda and Toyota over the past year. Shares of archrival General Motors Corp., now in bankruptcy, are nearly worthless. Shareholders and analysts see pluses and minuses in Fords decision to steer clear of government interference. Ford [may] be able to prevail taking the high ground and not taking government money, said John Chevedden of Redondo Beach, Calif., who owns 600 shares of Ford stock. Mr. Chevedden said he purchased the stock at a dip, so he hasnt lost any money on his investment (#) . He called himself cautiously hopeful based on production increases and Fords upbeat annual report released last month. He thinks Ford will benet (#) from the downsizing of GM and Chrysler LLC - as its production increases are designed to do. Mr. Chevedden said he was more concerned with the overall economy than with Ford. The concern is just about the market in general, whether its going to rebound or if people will just buy less cars, he said. Tom Whited, a nancial adviser for Edward Jones Investments in Plymouth, Mich., said such uncertainties keep him from recommending Ford stock even though the shares have performed better than expected.

There are so many question marks around the Detroit auto industry in general that I think there are better options, he said. Mr. Whited also worries that Ford will have difculty competing with Chrysler and GM after they come out of their bankruptcies debt free. The companys decision to go it alone prompted shareholder Jason Kozlowski of Toledo, Ohio, to buy Ford stock three months ago. Im thinking because they didnt take the bailout money (#) , because they decided to do their own thing, that they will eventually pull out of it, he said. It looks like theyre going to hold their own. Auto analyst Colin Langan of UBS, which does investment banking for Ford, agreed. Mr. Langan said Ford will benet in the long run by avoiding the involvement of the government and the United Auto Workers union in its restructuring, giving it more exibility and the ability to focus on prots. I think [GMs bankruptcy] is an opportunity for Ford to stand out (#) from U.S. competitors, Mr. Langan said. Fords increasing global presence, as well as the scheduled U.S. arrival of new models like the Fiesta next year, bode well for the companys future. I really looked at [Fords] prior turnarounds and elements in past successful (#) turnarounds, and every turnaround has had a new product, Mr. Langan said. I think there are denite, clear opportunities for Ford to gain market share.

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Ford pulls its weight without bailout funds - Washington Times

Indeed, Fords U.S. market share in May reached its highest level since 2006, rising to 17.4 percent from 15.2 percent a year ago. But Ford spokesman Bill Collins said GMs bankruptcy has not affected Fords plans. Things have not changed in the way were running the business, Mr. Collins said. Fords domestic sales totaled 155,994 vehicles last month as its Fusion hybrid and Flex crossover models (#) set sales records. Ford even outsold Japanese rival Toyota, which notched 135,661 U.S. sales. Fords May results were the best since July, when it sold 161,530 vehicles. With investors still wary of stocks and especially shares of automakers, Fords common stock has surged from a low of $1.26 last year to close at a 52-week high of $6.41 on Tuesday. Ford shares, while virtually unchanged over the past year, have handily outperformed those of Japanese rivals Toyota and Honda, whose shares have fallen 24 percent and 18 percent, respectively.
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