Blog: Dave LeggettFord reflections

Dave Leggett | 27 July 2007

Now that the euphoria of Ford actually notching a profit has subsided a bit, it's perhaps worth just noting that one swallow does not make a summer. I don't want to rain on the parade, but it will be very important for Ford to maintain momentum with the next quarter's results. A conversation I had yesterday with someone reasonably well connected suggested that all the stops might have been pulled out to get that Q2 result but that it will be much more difficult to do the same in Q3 and Q4.

Ford may have surprised with a Q2 profit, but it is not exactly out of trouble yet. Will it be able to maintain momentum? Black ink will raise expectations, but on a full year basis Ford is still expected to lose money this year and next.

One additional area for concern might be tighter money as debt markets stall. Will Ford and GM be able to do a deal with the UAW to set up a massive trust fund for retirees' healthcare, some of which would surely have to be funded by yet more big loans? If money is becoming tight, how attractive does the automotive sector look?

There's also a view that Ford needs as much cash as it can muster and therefore Volvo will be going out of the Ford door at some point after Jaguar and Land Rover have exited.

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