Has Ford’s management lost its mind?
While GM and Chrysler are considering a shotgun marriage and Toyota is exporting trucks out of the US, Ford has put 1,000 laid-off truck-workers back to work at its Dearborn, Michigan F-150 plant. What’s going on?
Last quarter consumer spending fell dramatically, and there are many indications that the economy is in a recession. But Ford is tooling back up. Maybe they figure that lower gas prices will spur demand. Or maybe they know something we don’t. But their expansion comes at a time when most analysts predict a significant contraction in the light truck market.
If Ford is right and the economy recovers quickly they’ll have trucks to sell while everyone else is tooling back up. But if they’re wrong and the new trucks just sit on the lot, they don’t deserve any of the bailout money.
Douglas R. Tengdin, CFA
Chief Investment Officer
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