Friday, May 06, 2005
Standard and Poor downgraded Ford and GM to junk bond status according to this article from the Detroit Free Press. For GM I agree with this rating, for Ford I do not.
One aspect that went into the decision for the downgrade was both companies' dependence on SUVs, specifically those coming in the future. While that is true for GM, Ford is coming out with an all new midsize sedan, the Fusion. It's a lot flashier than anything else in the segment, and it's built on the Mazda 6 platform. I think it's competitive. That should have gone into their analysis. Ford also has invested heavily in hybrids, was the first manufacturer to make a hybrid SUV, and makes a competent gas sipping small car in the Focus. I think the analysts here are reacting to the poor profit news of Ford in recent days, rather than the true potential of the company.
Updates will slow this week, but afterwards I will be much more committed to this blog. I am in the middle of finals and it very hard to think of things to write about, with the possibility of impending doom from flunking out of grad school if I don't do well always lurking in my mind. So bear with me, I have some interesting ideas I want to implement.
Ford has been writing bad paper, selling substandard vehicles and had risky financials for years.
Now others are offering vehicles that are smashing Ford, and investors and consumers are taking notice.
Care to argue? Cant argue with the layoffs and reduction in manufacturing...thats the real beans of the whole enchilada.
Just my 2 cents..
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