Ford in the Slow Lane

Its new CEO may be still be enjoying a honeymoon period with investors, but Ford (F Quote) cannot shake the perception that its "Way Forward" plan is moving way too slow.

At around $7.80, the automaker's share price has gained 4% so far this year after rising slightly in 2006. That performance comes after Ford tapped former Boeing(BA Quote) executive Alan Mulally to take over as CEO in September, the same month it unveiled plans to expand and speed up its restructuring plan, known as "Way Forward."

Seven months later, the outlook for Detroit's auto industry has continued to deteriorate amid sharp sales-declines and continued loss of market share. Toyota (TM Quote) said Tuesday it overtook General Motors (GM Quote) in worldwide auto sales for the first quarter, and the Japanese giant is creeping past Ford as the No. 2 seller of vehicles in the U.S.

Meanwhile, Ford doesn't expect to return to profitability until 2009, while rival GM is driving solidly forward on its turnaround. How long can Mulally's honeymoon last?

"While we are sympathetic to [Ford's] longer term approach, we worry that the media and the markets may lose patience well before 2009 -- especially if Ford fails to stem its market share losses and needs to cut production in [the second half of this year]," wrote Lehman Brothers analyst Brian Johnson in a recent note to clients.