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http://seekingalpha.com/article/103438-ford-celebrates-gm-scratches-its-head?source=yahoo
After wave upon wave of layoff notices and factory closures, Ford (NYSE:F) employees are celebrating a re-hiring event. Thanks to Ford re-starting its 2009 F-150 truck line, nearly 1,000 workers will be stamping their time card.
Ford is making a risky move. After all, its truck sales were down 27% last month and many experts say we have yet to reach a bottom in the industry. But company executives see a profit opportunity.
With one of the best-selling product lines in the history of automaking, Ford believes it must concentrate on the profitable line if it wants to ensure future success.
Officials insist that pent-up buying demand created from the credit-industry freeze is growing and truck-buyers will flock back to showroom floors over the next several months. After all, many businesses depend on reliable pick-up trucks for their daily operations.
As investors, we need to look at today’s news as less of a human-interest story and more as an in-depth look at the company’s financial situation. Ford’s willingness to put another thousand names on its payroll roster proves its short-term liquidity and its long-term odds of success.
When General Motors (NYSE:GM) and Chrysler are begging for merger assistance in a last-ditch shot at success, Ford continues its transition into a leaner, smarter manufacturer.
As of their last earnings reports, Ford had nearly twice as much cash on hand as General Motors and its operating cash flows were nearly $10 billion higher. Ford’s liquidity issues are miniscule compared to GM’s problems (see Ford's conference call transcript here, GM's here).
Even with Ford’s outlook significantly brighter than its Detroit counterparts, its share price has been drug into the mud. Over the last twelve months, shares have dropped by nearly 75%. General Motors, with a much smaller shot at survival, has seen its shares fall by 85%.
After wave upon wave of layoff notices and factory closures, Ford (NYSE:F) employees are celebrating a re-hiring event. Thanks to Ford re-starting its 2009 F-150 truck line, nearly 1,000 workers will be stamping their time card.
Ford is making a risky move. After all, its truck sales were down 27% last month and many experts say we have yet to reach a bottom in the industry. But company executives see a profit opportunity.
With one of the best-selling product lines in the history of automaking, Ford believes it must concentrate on the profitable line if it wants to ensure future success.
Officials insist that pent-up buying demand created from the credit-industry freeze is growing and truck-buyers will flock back to showroom floors over the next several months. After all, many businesses depend on reliable pick-up trucks for their daily operations.
As investors, we need to look at today’s news as less of a human-interest story and more as an in-depth look at the company’s financial situation. Ford’s willingness to put another thousand names on its payroll roster proves its short-term liquidity and its long-term odds of success.
When General Motors (NYSE:GM) and Chrysler are begging for merger assistance in a last-ditch shot at success, Ford continues its transition into a leaner, smarter manufacturer.
As of their last earnings reports, Ford had nearly twice as much cash on hand as General Motors and its operating cash flows were nearly $10 billion higher. Ford’s liquidity issues are miniscule compared to GM’s problems (see Ford's conference call transcript here, GM's here).
Even with Ford’s outlook significantly brighter than its Detroit counterparts, its share price has been drug into the mud. Over the last twelve months, shares have dropped by nearly 75%. General Motors, with a much smaller shot at survival, has seen its shares fall by 85%.
