This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

No Silver Bullet for Ford

Sounds like more bad news is on the way for auto workers in Detroit. Is it good news for Wall Street?

Investors cheered Wednesday when the Detroit News reported Ford (F - Get Report) is about to detail a plan to close at least 10 plants and cut 25,000 to 30,000 hourly jobs in North America.

Shares of Ford were recently up 11 cents, or 1.4%, to $8.22.

The newspaper cited sources who had knowledge of the proposal. As part of the carmaker's overall strategy, the "Way Forward," Ford is also formulating a program to revive its Lincoln and Mercury brands, along with its namesake line, the report said.

The report comes less than a week after The Wall Street Journal said Ford would shut five factories that have about 7,500 workers. Last month, Ford, based in Dearborn, Mich., said it would eliminate 4,000 salaried positions, in addition to 2,750 salaried jobs cut earlier this year.

Like its bigger rival General Motors (GM - Get Report), Ford has been grappling with high fuel expenses, a costly labor force and aggressive competition from foreign automakers. GM itself recently said its restructuring plan would lead to the company cutting about 30,000 jobs.

"This is definitely a step in the right direction for Ford, since they obviously have overcapacity and they're losing market share. But it doesn't really solve their cost issues," said Argus Research analyst Kevin Tynan. "It just makes them a smaller company with the same problems. So, it's better, but no silver bullet."

Tynan noted that Ford announced a large restructuring plan in early 2002, and the latest plan being circulated in the media sounds like more of the same.

"If they're not gaining market share, or at least stemming the tide of losing market share, then we're going to be doing this all over again in another three years," Tynan said. "Ford and GM are not the low-cost producers in the market, and we have no reason to have much confidence that they will design and build new products that people really want to pay for."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
F $13.32 0.00%
GM $30.54 0.00%
AAPL $93.24 0.00%
FB $117.81 0.00%
GOOG $701.43 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs