Ford's Darkest Day In 5 Years

[Purveyor]

Source: CNN

Stock plunged 8 percent, down 10 percent for year

By MATT EGAN
Posted: 9:52 AM, July 28, 2016
Updated: 1:34 PM, July 28, 2016

NEW YORK (CNNMoney) - Ford just waved a caution flag on American car sales.

The No. 2 U.S. auto maker warned on Thursday of a growing list of global risks and suggested the previously-roaring American market may have peaked.

"We are seeing signs of a maturing U.S. recovery," Ford CEO Mark Fields told analysts during a conference call.

Wall Street doesn't like the sound of that. Ford stock plunged 8%, on track for its worst day since at least January 2011. The stock is now down 10% this year.

Read more: http://www.clickondetroit.com/news/fords-darkest-day-in-5-years

[freebrew]

1. Add it up...

Ford's workers took drastic pay and benefit cuts.
Outsourced many American jobs for lower labor costs.
Vehicle prices skyrocket, double 10 years ago.


What could have happened?

Nothing crooked, I'm sure(wink,wink).

[Cryptoad]

4. My bad ,,, swear I saw it, buts it not a dupicate,,,,,, please forgive me,,,

having an ole Geezer moment!

[Spitfire of ATJ]

5. The other automakers better not get all smug. Ford didn't take a bailout.

[jmowreader]

6. Ford made its own bailout

The Ford Motor Company mortgaged everything in the company right down to their logo to raise the money needed to keep on going.

[Spitfire of ATJ]

7. The others got to hit the reset button on the taxpayer's dime.

[safeinOhio]

8. Dropped to $12.50

Last time it crashed, I bought in for $1.89.....

and now paying a very nice dividend to boot.

[whatthehey]

9. Buy!

I got in at $12.50. I may not even do my usual 1-3% sale pump and dump as this has a good dividend too and it is a nice long term bet.

[whatthehey]

13. Scorpion and Frog. Out at @12.80

This by the way is a perfect example of how I have tried to tell people anyone can make money out of this "rigged bankster casino" without being a financial expert in any way.

Buy profitable companies with manageable debt (a couple of clicks to find this out on any stock page like Google, Yahoo, CNN etc with no math or accounting skill needed) and dividends if possible on bad news drops and sell quickly when they recover a couple percent or more, because investors always overreact on bad news, and any profitable company without crushing debt will almost always recover fairly quickly.

I've done hundreds of trades like this in the last few years in good markets and bad and I've lost once because I forgot to check debt (WTW - I sold for a loss on the Oprah bubble to minimize losses). Everything else has averaged 11 days to get a typical 2% return net of fees. Compare that to a 1% savings account or 2.2% 30 year T bill.

[onehandle]

10. Lackluster automobiles. I've been buying from Government Motors.

Buying a new one from them, soon.

[titaniumsalute]

11. I disagree

I bought my first Ford in over 20 years. Sport Edge. I LOVE IT! Great ride, nice looking, super console, etc.

[ForgoTheConsequence]

15. Bullshit.

My last ranger stopped at 300k miles and hauled more than your average suburban dad's full size pickup could ever dream about. Ford makes automobiles that compete with Japanese cars in terms of quality and European cars in terms of driving dynamics. GM and Chrysler (FIAT) make cars that belong on the rental lot.

[George II]

12. We'll be seeing more reports like this (mostly exaggerated) between now and election day...

...even though the news isn't all that bad.

Remember the "crash" after the Brexit vote? Stocks recovered within a week or so.

[LanternWaste]

14. Approximately one third of all current auto loans are subprime (FICO 550 or lower)

Approximately one third of all current auto loans are subprime (FICO 550 or lower), delinquencies are up 5% over last year. Over six million subprime auto loans in 2015 alone. And though no one values a car at twice its actual worth and then securitizes the loans, the interest rates charged on these loans are very high (often over 20%), and the investors give very low recovery values to the assets. High interest rates can make up for a lot of underwriting sins...

[taught_me_patience]

16. They make their living on the F-150

A truck most Americans shouldn't even be buying anyway. Funny how the F-150 is the best selling car in America, yet the average American has almost no savings for retirement. Maybe if they bought a sensible car and saved gas money...

[happyslug]

17. The problem is not the F-150 but SUVs

The F-150 is outsold by GM pickups, but GM sells its pickups under two names, Chevrolet and GMC. This was to avoid anti-trust laws. In the 1960s they was a pushvto breakup GM. While Ford was just a little big smaller then GM in the 1960s but that when you included they overseas sales. Domestically GM was almost twice the size of Ford. Thus GM made sure you sold enough GMC trucks to make sure Chevrolet sold less trucks then Ford. That is still why Ford sells F-150 more the GM sells Chevrolet C-1500s, but if you include GMC 1500s, total GM pickups sold is more then Ford sells F-150s.

Anyway, these pickups are purchased by working class men who use them to move themselves and others and pickup other large items. The main alternatives for these buyers are station wagons and mini-vans.

SUVs are not seen as an alternative to pickups. SUV drivers are afraid of getting they vehicle scratch, that is not true of pickup drivers.

Pickup sales have been steady over the last 30 years with some increase, but the real increase has been in SUVs. SUVs are listed under trucks, so "truck" sells have jumped over the last 30 years but that has mostly SUV sales not F-150s. Ford Explorer is a top seller for Ford, it "replaced" large sedens and sports cars not pickups. Ford has other SUVs, all together sell more then Ford sell F-150s. The same for GM. Jeep sells nothing but SUVs now, Dodge (using the name Ram now) sells pickups but concentrates on SUVs

Just a comment the problem is not pickups but SUVs, while most SUVs are based on puckup bodies, but they are NOT pickups. F-150 sold well when oil prices were high, but SUV sales dropped. When prices drop it was SUVs that gained sales.

Side note: Right after 2008 do to high price of oil, F-250, the big brother to the F-150, sales were so low Ford stop making them for almost a year. After almost two years Ford had to put them back into production, demand had return for buyers needed them for like F-150s, F-250s tend to be work trucks and after a years of use and abuse you have to replace them. These trucks are steady sellers for Ford no matter the price of oil, unlike SUVs whose sales goes up as the price of oil goes down, and SUVs sales decline when the price of goes up.