Through The Fly's Eyes: Ford Motor

from Theflyonthewall.com













Mulally Begins Cleaning House

Ford Motor (F) reported a loss of $12.7 billion for 2006, with roughly half of that coming in the 4th quarter. Here's the breakdown:

• Ford Motor Credit has pretax full year earnings of $1.9 billion
• Ford's automobile business made money in Europe and Latin America
• North America and Asia are both losing money
• North America lost $6.1 billion in 2006
• Ford will have a cash outflow of $17 billion during the next three years to fix this sinking ship. It has $34 billion of cash on its balance sheet for newly hired Alan Mulally to fix this business.

The big positive for Ford is Mulally. Mulally ran Boeing, which during its long history, has had some tough times. Boeing also has some similar traits to Ford--a huge organization with a unionized work force.

It appears Mulally is attacking the cost structure first. And then will have to spend time revamping a dying product line. This is a stock you want to begin learning about again. If this ship can be put on the correct course, the upside is considerable. However, a lot of work needs to be done.