What an ignorant person your are.! I will match my MBA and business experience with you any day.
Ford Outlook Hurt By Visteon Pact
03.11.05, 3:00 PM ET
Tear Sheet | Chart | News
Standard & Poor's Equity Research cut estimates reiterated a "hold" rating on Ford Motor (nyse: F - news - people ) after the company reached a financing agreement with its "financially struggling former unit, Visteon (nyse: VC - news - people ). The agreement will cost Ford about $250 million in 2005 and will relieve Visteon of certain employee reimbursement payments due to Ford. S&P Equity Research cut the 2005 earnings estimate for Ford to $1.80 per share from $1.88. Based on historical and peer price/earnings multiples, the research firm kept Ford's 12-month target price at $14.
Fitch Cuts Ford to Junk, Outlook Negative
Monday, December 19, 2005
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NEW YORK — Fitch Ratings Monday cut its ratings on Ford Motor Co. (F) to junk status, the third of the three major rating agencies to strip the second-largest U.S. automaker of its investment-grade ratings.
The downgrade reflects ongoing market share losses, slumping sales of sport utility vehicles and competition at Ford's core North American auto operations, Fitch said.
Ford's profit margins have been squeezed by fierce competition from foreign rivals and a slowdown in sales of large SUVs due to high gasoline prices. Pension and health care costs also remain a concern, Fitch said.
Fitch also cut to junk the ratings on Ford's Ford Motor Credit finance arm, where most of Ford's $142 billion of consolidated debt is issued. The downgrade will eject Ford Credit from the widely followed Lehman Brothers credit index, limiting the investors who can buy its bonds and raising borrowing costs.
"It was already assumed that it would be knocked out of the indices," as both Moody's Investors Service and Fitch had Ford on review for downgrade, said Brad Rubin, senior credit analyst at BNP Paribas in New York.
Companies are ejected from the Lehman index if their debt is rated junk by two of the three major agencies. Ford and Ford Credit were both downgraded to junk status by Standard & Poor's in May.
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"We remain committed to accelerating our business plans," said Ford spokeswoman Marcey Evans. "As we've said, further details of those plans will be announced in January and we really cannot comment further at this time."
Ford has said it will unveil a major restructuring plan next month to restore North American operations to profitability. Those operations lost $1.2 billion during the third quarter.
Ford's situation could start looking up if it gets cost concessions from its union and launches a successful new line of products before any recession hits, said Jeff Hines, president of Sovereign Advisers, which has $2 billion of fixed-income assets under management. A weaker dollar would also help by reducing the cost advantage Japanese automakers have because of a weak yen, he said.
"There's still some time and there's financial flexibility," Hines said.
Fitch cut Ford's senior unsecured rating to "BB-plus," the highest junk rating, from "BBB-minus." The rating outlook is negative, meaning another downgrade is likely over the next one to two years.
In the credit derivatives market, the cost of protecting Ford's debt against default rose about 10 basis points to 895 basis points, or $895,000 for every $10 million protected, while Ford Motor Credit's protection costs rose about 10 basis points to about 535 basis points.
Prices of Ford's 7.45 percent bonds due in 2031 fell to 71 cents on the dollar, down from 71.25 cents on Friday, according to MarketAxess.
Ford's shares fell 6 cents, or 0.72 percent, to $8.24 on the New York Stock Exchange.
usan Tompor
SUSAN TOMPOR: GM outlook turns grim on market
November 22, 2005
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BY SUSAN TOMPOR
FREE PRESS COLUMNIST
Special report:
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• More coverage of GM cuts
Wall Street's initial reaction to General Motors Corp.'s plans to cut 30,000 jobs was ho-hum. But then it got worse.
During early trading Monday, GM shares rose 18 cents a share. But by the market's close, GM stock had fallen 47 cents a share, or 1.95%. GM closed at $23.58.
Along with Wall Street, GM shares had been trending up since touching an 18-year low Thursday when the stock traded under $21 a share.
As of Monday, the Dow Jones Industrial Average finally was trading above the year-end mark of 10,783.01 for 2004. The Dow closed at 10,820.28 Monday, up 53.95 points for the day.
Million fewer cars
GM's restructuring is the most dramatic cost cutting at the automaker in 14 years. GM is out to cut its capacity, slash costs and reduce losses. GM would be able to build about 1 million fewer cars by the end of 2008. Its regular capacity would drop to 4.2 million vehicles per year.
"This is a major, significant step -- no question about that," said Joseph Phillippi, president of AutoTrends Consulting in Short Hills, N.J.
But unfortunately for investors, the cuts are steps most analysts had long expected.
"There wasn't anything outside of the box," complained Robert Bosart, senior vice president for McDonald Financial Group in Birmingham.
And a bankruptcy at GM -- something GM management says will not happen -- continues to be a threat, Bosart said, especially if GM does not get continued concessions from the UAW.
And there's another concern: Could a drastic sales slowdown next year clobber GM? We saw terrible sales figures in October, and more bad numbers are projected for November.
David Healy, auto industry analyst for Burnham Securities Inc., said the auto industry and GM saw a bad October because of the dramatic discounts in June, July and August. Many people bought cars in the summer and then didn't need to buy in the fall.
Healy says sales could pick up by next month, as companies boost incentives.
But others are less certain.
Bob Schnorbus, chief economist for J.D. Power and Associates in Troy, noted that several analysts (he's not one of them) now suggest that sales of cars and light trucks could fall to 16 million to 16.5 million units in 2006.
But such a drop would be dramatic next to expected sales of nearly 17 million units in 2005, Schnorbus said.
And such a drop remains a possibility.
"Unfortunately, there are a lot of reasons for that to happen. And if it would happen, there's reason to expect that GM would bear the brunt of it," Schnorbus said.
Given those worries, Bank of America's GM analyst Ronald Tadross continues to have a sell recommendation on GM stock. His report says GM stock could hit $16 in the next 12 months.
Even with the restructuring, such reports give GM stock no reason to rally. And GM investors have reason to worry.
