Hold Ford For Turnaround Potential

Article Excerpt

FORD MOTOR CO. $9 (New York symbol F; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Extra risk) continues to lose sales to Toyota and Honda. Ford earns substantial profits on trucks and SUVs, and the recent jump in gas prices has hurt demand for these vehicles. Consequently, Ford lost $2.79 a share (total $5.2 billion) in the third quarter of 2006. One-time costs related to a major restructuring also hurt its earnings. It lost $0.31 a share ($583 million) a year earlier. Revenue fell 8.4%, to $37.1 billion from $40.5 billion. The company hopes its latest restructuring will help bring its costs in line with sales. It plans to close plants, phase out unprofitable models and cut 30% of its workforce. It also aims to simplify its operations by using the same parts in different models. To restore its profitability, Ford needs to make fewer gas guzzlers and more fuel-efficient vehicles. It plans to launch several new models in the next…

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