Fool Fight: Ford vs. GM

Welcome to another Fool Fight. Grab your ringside seat, please.

Wednesday's bout, which featured Advanced Micro Devices (NYSE: AMD  ) and Intel (Nasdaq: INTC  ) , came down to the final minutes, thanks to a flurry of terrific blows from several passionate Motley Fool CAPS players.

Today, live from Detroit, we've got another thriller, but this time we're in the lightweight division. (Or, in more common parlance, the American auto industry.)

Tale of the tape
Let's meet our combatants. In the (really) red corner, it's Ford (NYSE: F  ) , which looked like just another airline till last month, when the Dearborn Dancer received admirable scores for many of its brands in the annual J.D. Power quality survey. Nevertheless, Ford's credit remains in tatters (appropriate considering the customers the firm is targeting), and press reports say the founding family has strongly considered taking the firm private. For now, its "Way Forward" appears to be stuck in reverse.

Meanwhile, in the blue corner, it's General Motors (NYSE: GM  ) , which stalled in the same J.D. Power survey that let Ford shine. Good news has simply been hard to come by. For example, GM said in May that U.S. car sales fell 16%. A turnaround opportunity could be in the works, though: GM is in talks for a groundbreaking deal with Nissan (Nasdaq: NSANY  ) .

Get ready to ruuuuummmmmmble!
Who will take the title? Ding! There's the bell! First out of the corner is Ford, with this jab from telcomac99:

Ford has much to gain from this point on and I think now is about bottom of the trough. Nothing inspires quality workmanship like a fight for dignity and honor. American cars are facing an uphill battle to get back into favor here [on] their home turf. I think they will step up to the plate.

GM counters with a flurry of jabs from all-star CAPS player GeezerRob:

My expectation is a pop in the price as [Ford's] accelerated Way Forward restructuring plan is revealed, yielding draconian cutbacks in the fourth quarter and beyond. In the long run, costs will be reduced and sales will stabilize with new product ... But 2007 will be grim for both sales and losses.

Ford handles the assault and then presses the attack with this vicious uppercut, courtesy of Foolish online editor Nathan Alderman, known as TMFNato here in Fooldom:

Slow to adapt to changing consumer tastes, hemorrhaging money, beset by union troubles and high benefit costs, and considering selling its sole profitable division, GM is stumbling toward the junk heap. Barring an amazing, Iacocca-like turnaround and a sweeping new set of designs, this company's fortunes look dire. I drive a Saturn -- and love it -- but I still wouldn't go long on this dinosaur.

Down goes GM! Down goes GM! Can it rally? CAPS player ogness helps GM get to a knee:

Simply undervalued. Watch for a good time to get in on this one. I hopped in under $20. I'd say if it gets under $30, it's a steal.

Let's go the scorecard
Interesting, but it seems the judges were looking for more details. The count begins ... 1 ... 2 ... 3 ... 4 ... 5 ... 6 ... 7 ... 8 ... 9 ... 10 ... you're out! Ford scores an impressive victory with an overwhelming edge in bullish sentiment. Meanwhile, GM CEO Rick Waggoner reaches for the smelling salts:

Metric

Ford

GM

Total ratings

575

347

Bullish ratings

350

120

Bull ratio

60.9%

34.6%

Bearish ratings

225

227

Bear ratio

39.1%

65.4%

Bullish pitches

98

26

Bearish pitches

64

63

Note: Data current as of Sept. 27, 2006.

Get in the ring!
Will GM forge its comeback through a brokered alliance, or will Ford's "Way Forward" get in gear first? Get in the game now and tell us what you think. Or, if you'd rather, choose one of the more than 1,200 stocks that have yet to earn a star rating in CAPS, including Caribbean clean water maven Cons Water (Nasdaq: CWCO  ) and Latin American brewmaster Quilmes Industrial SA (NYSE: LQU  ) . Click here to rate either of them now. It's entirely free. Your Fool cap is waiting.

Intel is a Motley Fool Inside Value selection. Ask us for an all-access pass to the service and you'll be privy to chief advisor Philip Durell's best picks, which collectively are beating the market by more than 5% as of this writing. You'll also receive instructive lessons on valuation and company analysis. Give Inside Value a try; it's free for 30 days.

Fool contributor Tim Beyers has 34 picks in his CAPS portfolio, including Crocs (Nasdaq: CROX  ) , which he believes is an excellent short candidate. Think he's wrong? Get in the game and add your own rating.

Tim didn't own shares of any of the companies mentioned in this story at the time of publication. Get the skinny on all of Tim's stock holdings by checking his Fool profile. The Motley Fool's disclosure policy is always in fighting shape.


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