Best in Class: Ford Poised to Take Lead

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Ford(F Quote), the American carmaker most likely to survive the auto implosion without going bankrupt or taking government aid, deserves credit for making prescient decisions before the meltdown.

Before last fall's stock market crash, which sent the auto industry into a tailspin, Ford took steps to increase its cash reserves and eliminate weaker brands and dealerships. Those efforts enabled the company to shun federal bailout funds taken by General Motors(GM Quote) and Chrysler, which are continuing to flounder. Yesterday, Ford flexed its financial muscles by announcing the sale of 300 million shares to help fund its retiree health care trust.

Shrewd moves by Ford Chief Executive Alan Mulally have helped Ford gain an advantage over its American competitors. Bankruptcy is looking more likely for GM, which has until June 1 to restructure debt or seek protection. Chrysler filed for Chapter 11 on April 30 at the behest of the U.S. government, which helped broker a partnership with Italian automaker Fiat.

Shares of Ford have more than doubled this year to about $6 while GM's dropped 55%. In the past year, Ford shares have fallen 25%, less than the 33% drop of the S&P 500 Index and the 93% loss of GM shares. Chrysler is privately held.

Mulally joined Ford in 2006 after helping Boeing(BA Quote) overtake Airbus as the top commercial aircraft maker. Under his leadership, Ford has expanded its market share even as it trimmed its dealership network.

Ford passed Toyota(TMC Quote) to become the No. 2 car seller in the U.S. in April, helped by sales of its popular fuel-efficient Fusion sedan, according to Autodata. The gain came even though the company has cut the number of Ford, Lincoln and Mercury dealerships 14% between 2005 and 2008.