Ford’s New Target Price: $0

We believe Ford Motor Company (F) should file for bankruptcy to rid itself of Unions, pension and healthcare issues. The US government should provide $25-50 billion in aid which will act as DIP [debtor-in-possession] financing.

Any aid should force the company to only make 35 MPG+ vehicles. Management should be purged and outsiders brought in. Tariffs and quotas should be implemented for imported vehicles from overseas. Consumers should be allowed to deduct their automotive interest.

Lastly, global alliances should be forged among producers in North America, Europe and Asia. From an equity holder perspective, this compel us to rate the shares a Sell with a six-month target price of $0.00.

Posted in Categories: Auto, Contributor, Eurozone, External Research, Stocks, USA.

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Comment by Paul Crossgrove

2008-11-19 05:20:53

Your comment - ’should file for bankruptcy to rid itself of Unions, pension and healthcare issues’ is the most stupid backwards mindset that any allegedly responsible person can maintain. The union is not the problem. It is a poor product, insensitive response to client needs, and a morbid focus on dividends rather than immediate and new technology.

Ford sells a Focus unit in Europe that gets 45mpg. Chrysler has a fleet of diesels in Europe. What’s the problem in the U.S?? I’ll tell you. The American auto consumer is being used like a lab rat testing overpriced hybrids that are not ready for prime time. By the way - health insurance must be delinked from all corporate payrols. This idea spills over into the forbidden ‘national health care’ discussion which suggests that if we’re not careful we will slide into socialist-based healthcare system. Rant concluded.

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