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Ford's Road To Recovery

I didn't want to pass on the recent news that Ford Motor Co. announced that it made a $2.7 billion profit in 2009, its first profit in four years. This, coupled with recent troubles at Toyota, has some talking about a long-term resurgence by the nation's second-largest carmaker and about Ford making serious inroads against Japanese automakers. More critically, some believe that Ford's resurgence signals that the entire car industry may be pulling out of its slump.

But even the most glowing reports suggest that the manufacturer still has plenty of cause for concern.

"Ford certainly has got great momentum and will continue to have great earnings momentum into 2010," Morningstar analyst David Whiston said. "But they do have too much debt and they are going to take actions to reduce that in 2010, some of which will likely require shareholder dilution."

To a metro area that still relies heavily on the car industry, certainly the news about Ford's recent turnaround rates as cause for optimism. But just how much should we read into the good news? Does this really indicate a new dawn for the carmaker -- and perhaps for North American car companies as a whole? Or, given the prodigious amount of work still to be done, should we be much more tempered and cautious in embracing these reports? In your estimation, what, really, does this mean for Ford and the car industry? For metro Detroit and Michigan?

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