This is Doug Tengdin from Charter Trust with the Global Market Update for Monday, June 8th, 2009. Everybody’s worried about GM and Chrysler. But what about the other guy?
Yes, we’re talking about Ford. For years, Ford was the also-ran in the auto market. Their rental agency, Avis, was perpetually second to GM’s brand, Hertz. The number-two moniker seemed permanently tattooed on the company’s chest.
Well ever since Alan Mulally mortgaged the company to the banks, Ford has been dodging what’s been thrown at it. Sub-prime mortgages? Missed that one. GMAC didn’t-and they needed TARP money. Foreign culture clashes that nailed Chrysler? Ford dodged that one, too. And they managed to sell Jaguar and Land Rover to India’s Tata Motors while there was still some value there.
Now the latest attack in this game of corporate dodgeball is being thrown by the government. By bailing out GM and Chrysler, the US is effectively penalizing the intelligent corporate moves that Ford has taken. In a just world, Ford could have bid on the new Malibu’s plants. Now, they have to convince people to buy the Fusion instead.
Playing dodgeball is exhilarating. But as fewer and fewer players are in the circle, it gets harder and harder to dodge the next shot. Let’s hope that Ford can stay in the game.
Douglas R. Tengdin, CFA
Chief Investment Officer
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