Ford: The Mother of All Subprime Mortgages

Ford's (NYSE: F  ) recovery has hit some impressive milestones recently. Consider:

  • Profits! A billion dollars worth of operating income in the third quarter, including $446 million from "automotive," meaning the business of selling cars and trucks.
  • North American profits! Ford's North American operations were profitable for the first time since 2005 -- $357 million worth of pre-tax profits, to be exact. In fact, of Ford's major operational and financial divisions, only Volvo -- which is in the process of being sold (probably to China's Geely Automotive) -- lost money.
  • Credit upgrade! After pondering Ford's latest quarter, Standard & Poor's upgraded the company's debt rating a notch to B-. That's still junk bond territory, but it's a big psychological step up from the "highly speculative" CCC+ rating they had before. Moody's (NYSE: MCO  ) announced a similar upgrade the day before.
  • Consumer Reports! The venerable consumer watchdog might not be ready to declare Ford's products quite equal to quality kings Toyota (NYSE: TM  ) and Honda (NYSE: HMC  ) , but they have made a point of acknowledging that Ford has made tremendous strides and is, finally, in the neighborhood -- and eclipsing its U.S. rivals in the process.

CEO Alan Mulally and his management team are moving the company through its turnaround plan in impressive style. If they keep it up, Ford's turnaround will be a legend for the ages -- or at least, a key MBA case study for decades.

But how are they really doing?

A deeper look at the numbers
Let's start with some basics. Ford's market cap is roughly $26 billion. They have $23.8 billion of gross cash on hand (up from $21 billion last quarter). On the other side of the balance sheet, what they call "total automotive debt" is $26.9 billion, up from $24.2 billion at the end of 2008.

Ford Credit's financials are more complicated, but long story short: They're making money and have reduced their leverage, meaning the ratio of assets on hand to equity. Leverage is a key metric when evaluating banks, and it can be calculated a couple of different ways depending on how one accounts for certain derivatives, but in this case, the more conservative calculation puts it just under 10, which is good.

Good thing, too, because they're going to need a steady cash flow to service all of that operational debt.

About that debt ...
On Tuesday, Ford announced the sale of $2.5 billion in "senior convertible notes" -- bonds that mature in 2016 with a 4.25% coupon or are convertible to common stock at $9.30 a share. Ford is also planning on issuing more common stock, up to $1 billion worth.

These issues will dilute the value of the common stock -- by about 7%, according to a Goldman Sachs (NYSE: GS  ) estimate, of course that was before Ford increased the sale by $500 million and allowed and underwriters option of an addition $375 million. But I don't expect them to be a significant drag on the stock's performance going forward.

Ford's also doing some more restructuring of its existing debt, specifically a $10.1 billion revolving credit line due to be repaid in December of 2011. They've asked lenders to extend the due date to 2012 "in exchange for reducing lenders' commitments and increasing interest margins and fees." This and a couple of related deals are the "mother of all subprime mortgages" -- the credit line that was set up by Goldman Sachs, Citgroup (NYSE: C  ) , and JPMorgan Chase (NYSE: JPM  ) for Ford back in 2006, shortly after Alan Mulally's arrival. Why the nickname? Because the debt is secured by pretty much everything of value that Ford owns.

But I think this round of restructuring will go forward without too much trouble. I expect that the lenders, having watched General Motors' and Chrysler's debt holders get taken for a ride during those companies' bankruptcy proceedings, will be very happy to work something out with Ford.

The upshot
You really only need to look at one number -- $26.9 billion in debt -- to know that Ford is still a very sick company. I'd say it's still in intensive care, though the priest who came by to give the last rites has probably been sent home. They are executing very well on their extremely ambitious turnaround plan, but some key questions remain. Here they are as I see them:

  • Will Ford survive without bankruptcy in the near term? If they keep executing on their plan, and if the economy doesn't take a sharp turn for the worse, yes.
  • Will they be able to pay down that gruesome debt load? Yes, eventually, assuming they reach a sustainable level of profitability by 2011, as they are currently predicting, though we may see more restructuring (or re-restructuring) of their debt in the next year or two.
  • Should I buy or sell the stock right now? I wouldn't sell -- I'm a Ford shareholder and I'm not planning to sell anytime soon. But whether it's a buy at current prices is a more complicated question, one I'll take a closer look at once Ford releases its complete third-quarter numbers.

Meanwhile, what do you think? Is Ford a buy? Leave a comment and let me know.

Fool contributor John Rosevear owns Ford preferred shares. Moody's is a Motley Fool Stock Advisor pick and a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has the great-uncle of all disclosure policies.


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  • Report this Comment On November 10, 2009, at 10:27 AM, modran wrote:

    Ford is definitely a buy. We started buying Ford at 2.70, bought more when it dipped at 1.80 and still continue to buy more even though the price has trippled. We wish we could afford more at this time as we are sure that the company will prosper. With consumer demand and great products available, strong business and leadership in quality, fuel efficiency, safety, smart technologies and value, too - their market share will contine to grow.

  • Report this Comment On November 10, 2009, at 10:33 AM, rmgsandlin wrote:

    Regrettably, this is much ado about nothing...

  • Report this Comment On November 10, 2009, at 10:49 AM, rbstrader wrote:

    Ford has done a good job of managing its turnaround plan - and that's keeping them operationally afloat and buying them time to get new products to market. They have very good products in the market right now (better than Toyota/Honda) and even better product coming next year. And, they are making money on each unit sold. As long as the economy does not significantly worsen, look for them to continue to grow market share and profitability. I think their stock will continue to rise.

  • Report this Comment On November 10, 2009, at 11:40 AM, sondo1313 wrote:

    Umm, did you want to say anything about the business that Ford is in? How about a comment on the historical earnings potential of a healthy automaker? $2B, $4B? Any thoughts on those numbers, or are you primarily a banking analyst? How about '10 Fiesta, Focus & '11 Explorer? Pent-up demand? Recovery to 12-13M SAAR by 2012 at least? Ford mgmt has already stated it will provide guidance in Jan '10, so you can quit guessing about how they plan to pay down that debt. Shouldn't be a problem.

  • Report this Comment On November 10, 2009, at 11:53 AM, spawn44 wrote:

    All the negatives you continually write about Ford would be the death of some company''s. But I think you underestimate the earning potential of a company like Ford. If a company is capable of earning 10 to 20 billion in a year carrying a large debt load should not be the determining factor whether to buy the stock.

  • Report this Comment On November 10, 2009, at 12:01 PM, TMFMarlowe wrote:

    sondo1313, they only give me 800 words or so at a time. Today's ride was a basic look at the numbers. If you're a shareholder you should care about those quite a bit. We'll talk about SAAR predictions and "pent-up demand" and other exciting indicators of F's prospects soon, probably next week. Let's just say I'm leery of the pent-up demand thesis, but the good news is that I don't think anyone serious in Dearborn is counting on it. (I'm not so sure about the folks at the Ren Cen and Auburn Hills, alas.)

    And "shouldn't be a problem" is... not something I'd bet on yet. It's going to remain a guess until we see how the next year or two play out, plain and simple. They can keep punting the debt down the road, and in the near term it makes sense to do so, but the overall pile gets bigger every time. A lot of things have to go right for them to start reducing that pile and get back to true health by 2013-2014.

    I've talked a little about next year's small cars in the past. I'll do a deeper dive there as we get into show season... we'll learn a lot more between now and the 11th of January.

    Thanks for reading.

    John Rosevear

  • Report this Comment On November 10, 2009, at 12:06 PM, TMFMarlowe wrote:

    spawn44, please provide a link to anywhere I've said anything "negative" about Ford that wasn't rooted in hard reality. I'm a Ford shareholder and a fan of current management, and I've been making that clear in my articles about the company for months. But the company is still in rough shape, and your suggestion that the debt overhang shouldn't be an issue in an industry that requires 2-4 years and billions of dollars to bring new products to a brutally competitive marketplace is just unrealistic. It's a cost. It's an expense they have to pay that most of their competitors don't. It matters, a lot.

    Thanks for reading.

    John Rosevear

  • Report this Comment On November 10, 2009, at 12:19 PM, loanbest wrote:

    You amatures at Fools keep bashing this stock while its value continues to go higher and higher. Ford is now really on par with Toyota in all espects of the company. If Ford reaches half of Toyota's equivalent stock value, and it will, it will triple the current price. Just because of your discriminate comment about this stock, I'll never read your articles on any other stocks any more. I admit, because of your negative comment about Ford, I sold mine at 4.3 (still with a big profit). If I hadn't listened to you fools, I could affort to retire by now.

  • Report this Comment On November 10, 2009, at 12:32 PM, TMFMarlowe wrote:

    "Ford is now really on par with Toyota in all espects of the company. "

    Except for the debt load, the cost structure, the consistency of quality across the product line, and the perceived positive brand attributes, I agree with you.

    Alas, those aren't trivialities.

    Thanks for reading.

    John Rosevear

    ps: As it says in the above article, I'm a Ford shareholder. Can't call me out for "discriminate comments", whatever those are.

  • Report this Comment On November 10, 2009, at 12:49 PM, Tanjoceh wrote:

    I didn't really find the article particularly negative and your points above are valid but Ford is closing RAPIDLY in all areas. Also dont think for a second that Toyota and Honda are all healthy in these areas.

    As to you question about Ford's ability to repay the debt....go back and look at their earnings in the 98' - 00' period. Sure its a different market today but Ford is increasing its market share every quarter so as the SAAR continues to improve over the next 2 years all that will shift to bottom line profits!!

  • Report this Comment On November 10, 2009, at 1:12 PM, wwinchester85 wrote:

    The Key to Ford success and stock price is: Truck Sales......Watch truck sales... trucks sales are starting to trend up.....At the economy gets better...watch for all the pent up demand ( especially buesiness)....they must have trucks and with gas being stable.....Truck sales will soon be clicking into high gear.....Truck sales = Ford profits = higher stock prices.....Dont miss out on the next run of the stock....keep your eye on the truck sales trend. ...( ex ford employee.....

  • Report this Comment On November 10, 2009, at 1:19 PM, bruins7 wrote:

    The auto union workers will strike once Ford makes any kind of profit, demanding higher pay and benefits for it's members, it will be all over for Ford soon, just like GM and Chrysler.

  • Report this Comment On November 10, 2009, at 1:35 PM, Tanjoceh wrote:

    Sorry but that thesis doesn't hold....Union / Mgmt relations have never been higher irrespective of the no vote last week on the additional concessions. There will be no strike now or in the future, they need each other to survive.

  • Report this Comment On November 10, 2009, at 3:53 PM, rbstrader wrote:

    TMFMarlowe:

    You stated:

    "Except for the debt load, the cost structure, the consistency of quality across the product line, and the perceived positive brand attributes, I agree with you."

    I agree that Ford has a greater debt load and still a ways to go to convince buyers that they can compete - just as Toyota did 30 years ago. But, I do not see a dramatic difference in cost structure and I do see Ford emerging with better quality than Toyota across all of its new products. (BIC Initial Quality from JD Powers, 90% recommended buys from Consumer Reports, better long-term reliabilty than Toyota Corolla, etc.) Eventually, people will recognize this trend - as long as it continues. And, as markets mature (as the US has), there is much less brand loyalty - which could actually work to Ford's benefit.

    Debt load is a bigger issue and you can see that in their actions: re-structure existing debt with more favorable terms, issue new debt with more favorable terms, issue more equity and sell Volvo. Not one big thing but many small things that are chipping away at that debt. Add in a couple of years of a decent market and the debt is gone.

    Granted none of this is easy or by any means done but the way is clear and they have been methodically moving along it. As long as that continues, their future looks better than today - so a good place to invest. (I think that's why you've still got their stock ;)

  • Report this Comment On November 10, 2009, at 4:18 PM, TMFMarlowe wrote:

    rbstrader -- I don't deny that they appear to be on track... as you note, I do still have their stock. :-) But this is a stock where -- more than most -- emotions can get in the way of sound thinking, and I want to be clear with readers on two points: Things may look good, but they ain't home yet -- and there's a lot that can go wrong between here and there.

    Put another way, I agree that they are making progress, but I'm not so sure we can declare that "the way is clear".

    Ultimately the uncertainty around the next couple of years has to be factored in when we calculate a reasonable price to pay for the stock today. I'll take a stab at that in an upcoming article, probably next week.

    Thanks for reading.

    John Rosevear

  • Report this Comment On November 10, 2009, at 4:21 PM, TMFMarlowe wrote:

    ps - the cost structure compares a heck of a lot more favorably to TM, HMC, etc., now than it did a few years ago. But servicing that debt -- especially if they keep kicking it down the road via these restructurings, and to be clear I don't argue that they need to be doing that now -- is going to be expensive for a while yet. It can't be avoided, but it has to be acknowledged.

    John Rosevear

  • Report this Comment On November 10, 2009, at 5:47 PM, rbstrader wrote:

    TMFMarlowe:

    I agree they are not out of it yet and there are PLENTY of potential pitfalls. I'm positive on them based on what they should be able to do with their product investment. Just need to watch for the pitfalls. Any that materialize at least partially mitigate the upside.

  • Report this Comment On November 10, 2009, at 6:25 PM, Jazzenjohn1 wrote:

    While they are kicking the debt down the road as you say, in the terms of doing so they are reducing the debt by 25% I believe. You are also giving small mention to the fact that they have retired 10 billion dollars of debt so far this year and the kicking the can thing could retire another 2 billion or so. While they won't be able to pull off another debt reduction like the one earlier this year, they seem to have a laser focus on getting the job done.

  • Report this Comment On November 10, 2009, at 10:00 PM, Varchild2008 wrote:

    "Will Ford survive without bankruptcy in the near term? If they keep executing on their plan, and if the economy doesn't take a sharp turn for the worse, yes."

    The economy is a mess and FEDs are declaring unemployment as going to be relatively high for several years.

    However... The Ford FIESTA is coming at an extremely opportunistic time for FORD. This will sell like Hot Cakes. Because, after all, one of the best...in fact THE BEST selling FORD vehicle is FORD's smallest current American Car.... the FORD FOCUS.

    The FORD FIESTA is essentially smaller and much cheaper in price than the FORD Focus... Those who are strapped for cash will buy up the FIESTAs.... A lot of lower middle class people that can't afford to buy a car will now be able to.

  • Report this Comment On November 11, 2009, at 7:12 AM, TMFMarlowe wrote:

    Varchild2008, that argument doesn't work... "lower middle class people that can't afford to buy a car" don't buy new cars, they buy used cars. Where the Fiesta will shine is as an excellent alternative to cars like the Fit -- small commuter cars bought by (mostly young) professionals and the like. I'm really looking forward to test-driving one, preferably with the 1.6L EcoBoost and a proper 5- or 6-speed manual trans.

    Thanks for reading.

    John Rosevear

  • Report this Comment On November 11, 2009, at 11:08 AM, loanbest wrote:

    John - Are you still here trying in vain for your clients to beat down this winner stock? You are so laughable and becoming pathetic.

    Here is what you really are:

    you used the payment from your clients who shorted this stock and bought 100 shares of F.

    You crooks from Fools bashed this stock naked when it was down. When it's winning like today, you disguised yourself and bashed it shamlessly as a "long". Your real agenda is to bash this stock regardless for your clients who shorted the stock.

    Your readers need to know this: a few clowns like you wouldn't affect a stock price of a company this size, no matter how you try.

    You wouldn't stop trying, though, because you will get paid as long as you keep up with your dirty work. Your clients should wise up and join the winners. I have rejoined the crowd since sold at 4.3. Otherwise, I wouldn't give a damn about your writings at all.

  • Report this Comment On November 11, 2009, at 11:19 AM, TMFMarlowe wrote:

    loanbest, thanks for the laugh. Three points in response:

    1. I have no "clients". I manage my own family's accounts only.

    2. My articles on Ford -- including this one -- have consistently praised current management's execution on this turnaround plan. Go read them.

    3. As I've said in every article since I took the position, I have been LONG Ford preferreds since early March, for a 422% gain as of this writing, and while I sold part of my position a few months back I have no plans to sell the remaining shares. That is my only position in Ford.

    So, um, what was your point?

    I'd say "thanks for reading", but I'm pretty sure you didn't read past the headline... or anything else I've written on Ford.

    John Rosevear

  • Report this Comment On November 11, 2009, at 12:35 PM, kinnedie wrote:

    I have been testing vehicles since the late 60's and have never seen such disparity between brands. From Fiesta thru Taurus, Ford is selling superior vehicles at half the price. I notice that their incentives have been shrinking, so perhaps significant profits are around the corner. They seem to have luck on their side too; Toyota's image tarnishing floor mat/throttle linkage/electronic train wreck may be just the intro for their truck frame rust problems. All this might encourage many more buyers to look at Ford, which I am sure will result in profits.

  • Report this Comment On November 11, 2009, at 1:38 PM, jmt587 wrote:

    I love that you're taking all comers John. I'm no Ford fan, but it's nice to see you respond to the criticism. That's the biggest fault I find in some of your colleagues, they write an article, invite comments, and then never respond to any criticism. Keep it up!

  • Report this Comment On November 12, 2009, at 12:37 PM, MikeCoop wrote:

    As investors go, I'm about as unsophisticated as they come. Thus, in deciding whether I want to buy Ford stock, I don't look at all these obtuse statistics and accounting figures as much as one key thing: can they build cars that sell? Well, I HAVE driven a Ford lately (a couple of them, in fact), and I was very impressed. I was also favorably impressed when Ford said "no thanks" to the gov't's bailout money. NOW I need to delve into the finance issues a bit to figure out what I'm willing to pay for a share, but my own "cowboy analysis" of Ford is that it's a BUY.

  • Report this Comment On November 12, 2009, at 6:42 PM, deal2make wrote:

    I am a Ford believer. Rather I am a believer in the US of A and its innovative spirit to accept problems and deal with them. So, when Ford was pathetically low and expected to go to bankruptcy I bought it at $1.50-$1.75. I had read articles about their vision and their management. Among the major three automotive companies I believed that Ford had better vision and better management. That has paid off now. I only wish I had more money to bet on it then. Somehow, the same trick did not work with Sun Microsystems!

  • Report this Comment On November 13, 2009, at 3:14 PM, opedbyme wrote:

    "Ford announced the sale of $2.5 billion in "senior convertible notes" -- bonds that mature in 2016 with a 4.25% coupon or are convertible to common stock at $9.30 a share"

    I'd buy into the convertible notes: take the 4.25% interest and just maybe if Mulally turns things around convert to shares at $9.30. Doesn't that sound like a sweet deal?

  • Report this Comment On November 13, 2009, at 4:33 PM, RCREZ754 wrote:

    I think Ford will be a stock worth 15 first brought in @ 1.62 and have added @ 7.80, 7.68,7.27 and now have a limit order in for 8.25 , sold some to get my original money from the 1,61 shares out and now will hold the rest as on Fords dime

  • Report this Comment On November 13, 2009, at 5:19 PM, montalvoe wrote:

    John Rosevear,

    From time to time, I'll read posts by readers to gauge reaction to an article, and I must admit I'm not a regular here, but I must say I was very impressed with your desire and ability to reply to various comments. I sincerely hope you keep up the great job and look forward to reading more of your articles. Thanks.

    Ed

  • Report this Comment On November 13, 2009, at 7:11 PM, Alwayzwrong wrote:

    I don't know about the stock, but I'd never buy one of their vehicles. As reliable as a Toyota, Honda, or Nissan? Not in my experience.

  • Report this Comment On November 13, 2009, at 9:10 PM, madinga wrote:

    At this level a sell...

  • Report this Comment On November 14, 2009, at 4:26 PM, TMFMarlowe wrote:

    Alwayzwrong, that attitude -- which is shared by many Americans -- is indeed an obstacle that Ford has yet to fully overcome. Truth is, they're making some excellent vehicles right now, but it'll take several more years (at least) of being at or near the top of the quality charts before they transcend the "American car = unreliable" stigma.

    madinga: Why so?

    Thanks for reading.

    John Rosevear

  • Report this Comment On November 14, 2009, at 9:30 PM, Cqqldude wrote:

    Being from Texas, I'd have to declare that the F150 has been the jewel of the Ford line. But, if oil hits 150-200 as Boone Pickens predicts(he did predict 100 or more when all others claimed 50), then the light car division had better be as good as you folks claim. I hope so, I have owned several Fords and am long on the stock!!!

  • Report this Comment On November 16, 2009, at 2:59 PM, masterN17 wrote:

    Hi John,

    This is a well written article on Ford and I applaud your smooth handling of your criticizers.

    It's easy to say now that in March they were extremely undervalued at $2/share. I didn't buy then (regretfully) but now I feel that the only reason I would buy now is a gut hope that they will turn things around, rather than based on strong evidence of undervaluation. That being said, I do look forward to their return.

    - N

  • Report this Comment On November 16, 2009, at 2:59 PM, masterN17 wrote:

    Hi John,

    This is a well written article on Ford and I applaud your smooth handling of your criticizers.

    It's easy to say now that in March they were extremely undervalued at $2/share. I didn't buy then (regretfully) but now I feel that the only reason I would buy now is a gut hope that they will turn things around, rather than based on strong evidence of undervaluation. That being said, I do look forward to their return.

    - N

  • Report this Comment On November 16, 2009, at 3:40 PM, pondee619 wrote:

    John:

    Their is another way to play Ford, the Preferreds. (F-S) Do you, or anyone at the Fool, have any comment on these?

  • Report this Comment On November 16, 2009, at 3:43 PM, pondee619 wrote:

    John:

    Any comments or opinions of the Ford Preferreds (F-S)? Are they a viable way to ride Ford? Any help is helpful

    Frank

  • Report this Comment On November 16, 2009, at 5:23 PM, stan8331 wrote:

    I think the article is a fair description of Ford's situation. No real quarrel from me on the content.

    The problem is the bold, attention-grabbing headline that suggests anyone who refuses to sell Ford immediately must be insane. I know provocative headlines are a necessary part of the business, but sometimes you're not going to get credit for reasonable content when the headline is screaming a different message.

  • Report this Comment On November 16, 2009, at 6:16 PM, Varchild2008 wrote:

    John:

    John:

    Why did (F) stock price trade up today?

    I thought there was NOTHING to buy/hold (F) for in your opinion????

    You trash the stock......trash the stock....and say.

    "Well.. I am not being discriminate because I said in my article that I am a shareholder."

    Big deal.. You are a shareholder.... unless you want to provide total access to HOW you are a shareholder like Jim Cramer does with his Charitable Trust Fund..... That really doesn't instill confidence in your article's analysis of (F).

    Right now...

    1) FORD has the BEST quality vehicles on the market.

    2) FORD has the SAFEST vehicles with many carrying the TOP safety ratings.... Including Ford Taurus, Ford Fusion, Ford Escape...

    3) FORD has done and continues to do an awful lot to shore up cash to pay off their debt load.... They have been able to extend their debt maturity...or are trying to right now.

    ?????? Where are the negatives on this one?

    I've been holding onto (F) since it was trading in the 5s. I am just glad that I don't listen to JOHN ROSEVEAR telling people (F) is a bad investment because I'd be making NOTHING off this rally.

  • Report this Comment On November 16, 2009, at 6:58 PM, TMFMarlowe wrote:

    pondee619, I actually own Ford preferreds -- Cap Trust II, the Yahoo ticker is F-PS. At the moment I bought them in early March they were very attractively priced vs the common, which made the decision easy. Now, it's a little more complicated. I think there are some good reasons to consider them, but it would take me a whole article to explain the ins and outs.

    But now that you've got me thinking about it, I'll try to write that article sometime in the next week or so.

    Thanks for reading.

    John Rosevear

  • Report this Comment On November 16, 2009, at 9:59 PM, TMFMarlowe wrote:

    Varchild2008, try actually reading the article before you comment. It makes this whole dialogue thing work better.

    John Rosevear

  • Report this Comment On November 16, 2009, at 10:30 PM, sidehiller wrote:

    If I were going to invest a lot of money, or other people's money, and if I were considering whether to invest in Ford stock, I would take a long, hard look at what the "cap and trade" legislation would do to the company itself and its customer base.

    I'm pretty sure that the company will stay on top of technology and produce very fuel-efficient cars and trucks. But, will the products be efficient enough for people to buy them--to be able to afford purchase price/debt service and the fuel and fees to keep them on the road?

    I'm also a Ford shareholder, and proud to be one--

    "I love my truck," as the song goes. I started buying shares when they were a little over $10 and quit buying at the end of last year (I didn't have spare cash to invest when it was down around $1.50 a share, and frankly I was too chicken to borrow any to invest). So, my basis is about half the current share price, and I still figure it's a keeper.

    I'm looking forward to the day when dividends will be paid on it again...that may take awhile, though. (Maybe I'd be better off buyng some of those convertible notes).

  • Report this Comment On November 17, 2009, at 8:19 AM, pondee619 wrote:

    "I'll try to write that article sometime in the next week or so."

    John, this time I'm going to hold you to that. Previously you said:

    "On February 26, 2009, at 6:41 AM,

    TMFMarlowe wrote:

    pondee619, I'm planning to do an article talking about the F preferreds sometime early next week. I've got several thoughts on 'em; I'll collect them there. Short answer: Very, very tempting.

    John Rosevear"

    You thereafter begged off stating a lack of time, or something. I can't find that comment where you begged off.

    Then: "Yahoo ticker is F-PS. At the moment I bought them in early March".

    Instead of the planned/teased article, you bought. (So did I , later sold less than half for more than my cost basis so my current holding is free. So glad I didn't wait for your input). Are we going to see the teased article this time?

    I would really like someone else's evaluation of these issues.

    Thanks:

    Frank

  • Report this Comment On November 17, 2009, at 8:23 AM, TMFMarlowe wrote:

    It's not always up to me, Frank. I'll see what I can do.

    John Rosevear

  • Report this Comment On November 17, 2009, at 8:29 AM, TMFMarlowe wrote:

    It's not always up to me, Frank. But I might be able to fit it into an article we've been discussing. Bear with me for a few days and I'll see what I can do.

    John Rosevear

  • Report this Comment On November 17, 2009, at 1:25 PM, matt43452 wrote:

    I'm a former Ford employee and recognize that the quality could have (SHOULD have) been better in recent decades.

    However, I can see the significant strides they have made and bought a few hundred shares once they fell below $2.

    I recently sold ($9.10) because I suspect they will dip a bit due to the debt load, economy, and the issuance of more common stock. Plus, the union continues to be a pain - I can't believe they are voting down the agreement. I often wonder what they are thinking.

  • Report this Comment On November 17, 2009, at 3:59 PM, Matt015 wrote:

    Wow John, you seem to catch a little crap about being anti-Ford. Even when you own shares.

    Anyway, I think your articles are rather balanced. You point out many obstacles that you believe to be surmountable.

    I think Ford will be the #1 automaker in America by the end of the next decade. Allan has done a great job with an absolutely crippling level of debt. The debt load hasn't yet hindered product development and I hope that that continues. I also own shares in Ford, I don't want to sell because I'm not yet sure if the downward pressure (share dilution, convertible notes) will have lasting effects on the stock. Will I add to my position soon?

    No, not unless the share dilution causes a share price dip.

  • Report this Comment On November 17, 2009, at 4:13 PM, TMFMarlowe wrote:

    Matt015, you think this is bad, you should see what happens when I write about GM -- apparently, being skeptical of the management of a company that was mismanaged into bankruptcy just a few months ago makes me anti-American, or something. Fun times.

    I agree with your points about Ford, though I think the dilution might have already been priced in. Thanks for stopping by.

    John Rosevear

  • Report this Comment On November 17, 2009, at 5:05 PM, matt43452 wrote:

    I agree Ford will continue to eat into market share and I plan to buy into this company again after the New Year's.....and after I pay my Christmas bills.

    ....I said I sold at $9.10 - I was thinking of MIC. I sold my Ford at 8 and change.

  • Report this Comment On November 17, 2009, at 10:44 PM, KayZeeDee wrote:

    TMFMarlowe - its OK to be skeptical of the management of any so-called "American giant" corporation. It's good for the shareholders and the management to have these stimulating discussions. The point about Ford that is a big deal is how much debt they're still carrying... but they are slowly eating their way out of it. What about GM? Better yet, what about Toyota? Are they poised to rule the roost for the next 20 years in the US?

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