Can Ford make Hay?
Ford Motors
Ford might be in a position to make hay in this market. However, they are suddenly competing against deep pockets, yours and mine. GM now has $50 billion in debtor in possession (DIP) financing to get them back on track. Is it fair for Ford to compete against what has become a government owned entity. Will the politicians be able to keep their hands off of things? That part is highly unlikely.
Ford is in a unique position to find the best and brightest people (if the union allows it), produce products without the intervention/oversight of the government. Ford will be increasing production this quarter. However, they might not have the products to capture the imagination of the buying public. I am in search of a truck. I like the F150, but I am not sold on it (not sure why). Will they have to incent me to the point that they put their own survival at risk?
How well will the new GM be run? I don’t know about you, but whenever I am dealing with someone who isn’t spending their own money, or who is spending money of someone who is indifferent toward that company, they spend differently (foolishly). I can’t imagine that GM is going to be operating well. There is a TON of fat to trim. Let’s hope that the new management of the company is willing to take the steps needed.
By the way, if you were still holding GM stock… what gives? Were you looking for a loss? This bankruptcy was one of the most obvious in quite some time. The day that they stated that BK was imminent, you should have run for the hills. Even if BK wasn’t going to happen, it was pretty clear that the common stock would be wiped out with a restructuring. It was mentioned on “The Bob and Scott Show” podcast many times. “COMMON WILL BE WIPED OUT”.
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