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March Stock Mania: Ford topples Apple

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Old 3/21/11, 10:55 AM
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March Stock Mania: Ford topples Apple

For something a little different in the 'Which is Better' section . . .

http://money.cnn.com/2011/03/21/mark...n_bin&hpt=Sbin

NEW YORK (CNNMoney) -- Though it's had a rough year so far, Ford's stock proved that it is built strong and tough.

After a week of voting for their favorite portfolio picks in March Stock Mania, CNNMoney readers picked the iconic auto maker as tournament champ, beating out Apple (AAPL, Fortune 500) by 57% to 43%.
Old 3/21/11, 11:08 AM
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I think this probably has everything to do with the Tsunami.
Although I'm happy to see anything or anyone beating Apple.
Old 3/21/11, 11:35 AM
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While a correction is to be expected after such a long rise from near death, the mid $14 area seems to be holding as support. It has not been a perfect test of support - $14.50 would have been better - but considering the numerous outside events affecting the markets, it has held the area of the March/April 2010 double top fairly well.

If support holds here as the dust shakes out, and then proceeds up on stronger volume, a momentum play could surface. Course it will have a few sticking points as it passes recent highs as some investors will go "whew - got my money back, I'm outa here!".

IMO, the overhang to share price going forward is not Ford's debt so much - as they have been attacking that very prudently - but rather the potential for dilution to shareholders if they have to raise future capital by issuing more shares. That's a hesitation for many investors.

And probably there won't be any reason for the stock to take off until the new contract with the union is settled.

If it were me, I'd keep relying on profits to pay down & improve debt ratio's to the point of obtaining credit rating upgrades into the A's. Then refi and/or pull cash out again and bank it for reserves - this time at all time record low rates, and lock them in for as long as you can. This era of dirt cheap loans - dang near free for those with A ratings - won't last forever.

No guarantees of course


Last edited by cdynaco; 3/21/11 at 11:36 AM.
Old 3/21/11, 11:04 PM
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Originally Posted by cdynaco
And probably there won't be any reason for the stock to take off until the new contract with the union is settled.
(Posted before I read the following:]
And away we go...

Auto Union Looks to Recover Concessions From Ford During Contract Talks


Published March 21, 2011 | FoxNews.com
Now that Ford is back in the black, the United Auto Workers union wants to recover the perks it gave up over the past few years as the auto giant teetered on the brink of bankruptcy.
Rhetoric is flaring ahead of negotiations this summer for the UAW's next four-year contract. More than 1,000 delegates from the union are meeting in Detroit this week to strategize for those negotiations.
The talks will encompass labor agreements with the Big Three automakers, but Ford's impressive profits may make the company a target for union representatives looking for a bigger share of the wealth. Union members also have more leverage with Ford, since Ford workers did not agree to the no-strike clause approved by employees at General Motors and Chrysler.
Bill Johnson, who represents workers at a Ford plant in Wayne, Mich., told the Detroit Free Press that if Ford does not restore "everything" to the union, "the membership is going to knock it down."
Of Detroit's Big Three, Ford is doing the best. The company did not have to declare bankruptcy and did not accept a federal government bailout. Last year, the company earned $6.6 billion and it has since awarded millions in bonuses to senior executives.
General Motors recorded a $4.7 billion profit. Chrysler lost money in 2010, though it is expected to turn a profit this year.
Marcey Evans, a Ford spokeswoman, said the company's focus in the negotiations will be on "ensuring that all parts of our business are operating as competitively as possible." She would not comment on what past concessions could be back on the table.
"We have a history of working collaboratively together with the UAW to find solutions to critical issues, and we look forward to our discussions with them later this year," Evans said in an e-mail to FoxNews.com.
UAW President Bob King has said the union will press the automakers for expanded benefits.
"All the sacrifices that our members made to turn these companies around were part of the process that's really led to this amazing turnaround," he told Bloomberg in January, claiming members gave up between $7,000 and $30,000 since 2005. "We want our membership to share in a very meaningful way in the upside of these companies."
The auto union has made a series of concessions over the past several years as the industry's financial woes became increasingly more dire. They agreed to pay higher premiums and higher co-payments for health care in 2005. In the last four-year contract in 2007, they set up a second-tier wage for entry-level workers starting at $14 an hour, or about half the wage for current workers. They also approved several other changes, though union members received a $3,000 bonus in exchange for the agreement.
In 2009, workers went further and agreed to suspend bonuses and cost-of-living increases, among other concessions.
But with executives getting hefty bonuses and union workers now looking for their share, one Michigan economist warned that the industry could be drifting toward the habits that originally made it less competitive against leaner foreign automakers.
"All the bad habits are going to be on the table for restoration," said David Littmann, a senior economist with the Mackinac Center for Public Policy. Though union workers have made concessions, total pay and benefits are still better for American auto workers than their Japanese counterparts -- the average GM worker earns $57 an hour in pay and benefits compared with $51 an hour at Toyota, according to an August estimate Littman cited from the Center for Automotive Research.
Littmann said health care benefits will probably be the biggest provision union negotiators will be after this summer. He said that in light of the epic battle over collective bargaining rights in Wisconsin, UAW representatives may feel obligated to press hard for better benefits.
"They're kind of duty-bound to show clout," he said.
The UAW contract expires in September. A representative for UAW could not be reached by FoxNews.com for comment.
One UAW official told the Free Press that while members want their concessions back, they're also committed to product quality and mindful of job security.

http://www.foxnews.com/politics/2011...ontract-talks/
I think profit sharing should be the only way to increase worker compensation above annual COLA's to hourly wages & bennies. It's like a salary plus commission arrangement that rewards performance.

And Ford employees would be wise to remember they now have to compete against two companies that got to wipe their debts to zero with their banko's - while sticking GM & Chrylser union pension trusts with massive paper stakes.

Last edited by cdynaco; 3/21/11 at 11:09 PM.
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