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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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  • 1

    Well, what this means for Ford is that it is a living breathing car company. Chrysler, and to a lesser extent GM, aren't until they can be profitable again. As far as for Michigan, it slows the bleeding but Detroit won't be Detroit again until it can find a new industry. Some cities get a second act, i.e. New York, most don't (Gary, Newark, Buffalo, etc.). New York had the political will and the size to make a return. Most cities, once they get on the wrong side of progress, don't have the will and the means to turn it around. Have there been any mid sized American cities to have a second life?

  • 2

    Ford cut it's workforce in half since 2006.

    When will it halve that again? Another 4 years?

    "Or, given the prodigious amount of work still to be done,.."

    What kind of work are you talking about here Darrell?

    Layoff work? More Robotic installations? Demolition Work? Entertainment work? War work? Drug work?

    The simple fact is that lots of people left the South because farming work was getting easier after he gin arrived. Farm workers weren't needed so much anymore.

    Some larger thought ought to be given here.
    An ongoing WPA will have to exist.

    Maybe we should visit Pittsburg for a look see.


  • 3

    I believe it means that we must all use caution when looking at the success or failure of any automotive company. Manufacturing as a whole has taken an enormous hit and the storm is not over yet. Ford has a long way to go too....just not as far as Chrysler and GM.

    As a side note, on November 10 of last year, you did a provocative piece about the local Imam that was shot down by agents from the Federal Buerau of Investigation. Just wanted to chime in on your blogspot to share my kudos for your contribution to the many voices of protest that has resulted in a possible investigation into the matter by the justice department. Keep us informed and keep it real Mr. Dawsey.....

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