I’ve posted several times regarding the auto industry here in Michigan. Since then, we have seen GM and Chrysler receive some federal money to try to keep them afloat.
Ford Motor Company appeared to shy away from federal dollars and put up a good front that they had everything under control…we don’t need any bailout money.
Based on this, I’ve had friends invest significant dollars into Ford Stock. They believe that by Ford not taking any federal money, they are proving that their company is in good shape and on a smooth path for future profitability. I DO NOT BELIEVE THIS TO BE TRUE! Here is why…
I believe that Ford has taken a “calculated risk” in deciding to put their best foot forward to the general auto buying public. Ford is trying to convince us that they are operating “business as usual”…”no need to worry here”…”Come buy cars from us, we will be around to honor warranties!” I DON’T BUY IT. The public records that make their income statement and balance sheet open to observation lead me to believe that Ford is in a world of hurt, just like the other guys.
My point is to look hard and do your own research before investing into individual companies. The last 6 months have proved that his can be risky business!