Ford Motor Co. takes a licking but keeps on ticking

Ford Motor Company (NYSE: F) shares are holding up pretty well today (up 1%) despite reporting a $5.8B loss and record $12.7B loss for 2006. That kind of a loss could feed ten nations in Africa for at least 20 years. Just take a look at the chart, it's a sad story that has cost American's thousands of jobs, countless millions in revenue, and cast a shadow over the American Auto Industry. It is make it or break time for Ford, and CEO Alan Mulally is well aware of the stakes on the table. Alan was brought to Ford so that he could bring the company back to life just as did with Boeing (BA) in developing the 787 Dreamliner that has made Airbus panic like Shaq at the free-throw line. Alan Mulally has been CEO at Ford for only four months and he's getting ready to begin the most important job of his life.

Mulally brings together the operating heads of the Americas, Europe, South America, and Asia every Thursday, so collectively the company can talk and learn from each other. Last month during a meeting he laid out 12 different metal rods that Ford uses to hold up a vehicle's hood. He did so to demonstrate for his management that this kind of variation is expensive to manufacture and Ford owner's could care less, so why do it? Ford has different V6 gasoline engines for the U.S., South America, Europe, and Asia and Mulally admitted: "The cost and complexity of that duplication is ridiculous". Ford is now planning on creating one small car for all its world markets and incorporating different pieces of flair for each foreign market (and more than 15 pieces I might add). Mulally will succeed to bring Ford's business units to operate in harmony and when that happens, you can bet the stock price will start to move.

Ford plans to deliver 20 new hybrid research vehicles later this year and this week they unveiled the world’s first drivable fuel cell hybrid electric plug-in prototype - needless to say, they are headed in the right direction. So what's next up for Ford? In 2008 expect the Light Cycle as featured in the movie Tron, powered by a glow stick which is usually reserved for raves or loud techno clubs. The special Ford glow stock (when used correctly) can transform into a Light Cycle on command. The only problem is that the Light Cycle "glow sticks" are unstable and only work in the Tron world.

Perhaps if Alan teams up with the Tron Guy they could get the Light Cycle idea off the ground. Or bring back the Ford Pinto that we recommended when we first covered Ford back in September. But until that happens, I say let's see what Mulally can do in the coming months, maybe he can make Ford a stock worth buying.

Article written by: Frank Lara Jr.
Article posted on: January 25th, 2007

Disclaimer: The Author does not own any shares of Ford (F), nor does he own any long or short positions the securities mentioned in this article.