Ford is definitely one of the big Three...
10-21-08, 03:08 PM
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Ford is definitely one of the big Three...
Sort of thought someone would have already gotten this going but a search didn't show it. Not that I am a fan of Kerkorian and I don't exactly feel much sympathy for his losses, but he has given up on Ford. Can't say that I argue with it. US automakers just look like dead money whether or not they get more taxpayer money to retool.
Reuters
Kerkorian sells Ford at loss, could dump stake
Tuesday October 21, 2:10 pm ET
By Soyoung Kim and David Bailey
DETROIT (Reuters) - Billionaire Kirk Kerkorian sold shares worth about $18 million in Ford Motor Co (NYSE:F - News) at a big loss and could sell his remaining 6 percent stake after becoming the automaker's largest outside investor this year.
Tracinda Corp, his investment company, said on Tuesday it had sold the shares was working with an investment bank on the potential sale of all 133.5 million shares it still holds.
Tracinda's investment in Ford had been seen as a vote of confidence in the No. 2 U.S. automaker and its turnaround strategy, and Ford shares tumbled 7 percent on the news.
Ford said it remained committed to its restructuring plan under Chief Executive Alan Mulally, who has pushed the company toward a unified operating structure and rushed to roll out new fuel-efficient small cars.
"We remain confident in and focused on our plan to transform Ford into a lean global enterprise delivering profitable growth for all," Ford said in a statement.
Analysts noted that the market for vehicles in the United States and Europe had deteriorated sharply since April when Tracinda began to build a position in Ford.
"Who needs the aggravation of trying to turn around a distressed company in a troubled industry in the middle of an economic downturn?", Shelly Lombard, a bond analyst at Gimme Credit, said in a research note.
"Ford has lost a potential source of liquidity, someone who could write a check for a few billion if it needed the capital," Lombard said.
MONEY LOSING
Kerkorian's pullout from Ford would be a costly retreat for the activist investor, who has a mixed track record with his investments at all three Detroit-based automakers.
Kerkorian surprised analysts and investors earlier this year by spending more than $1 billion to take his stake in Ford for an average price per share near $7.10.
Tracinda began selling Ford shares on Monday at $2.43, according to its statement. That represented a loss of almost 66 percent from what the fund paid on average.
"In light of current economic and market conditions, (Tracinda) sees unique value in the gaming and hospitality and oil and gas industries, and has, therefore, decided to reallocate its resources to focus on those industries," the investment firm said in a statement.
Ford shares have dropped 60 percent since June when Kerkorian raised his stake to 6.5 percent and said he was willing to support the automaker's turnaround with an injection of additional capital.
Tracinda did not request a seat on Ford's board.
Kerkorian previously took a stake of nearly 10 percent in General Motors Corp (NYSE:GM - News).
His adviser, Jerry York, held a seat on GM's board for a short time but resigned after GM rebuffed suggestions for changes and Kerkorian sold the stake.
Kerkorian also was a major shareholder in Chrysler before it was acquired by Daimler in the late 1990s and made an offer to buy the company in 2007 before it was sold to private equity group Cerberus.
ROUGH CLIMATE
Ford shares have lost about 85 percent of their value since 2005 when the U.S. auto market began to weaken and all three U.S. automakers were forced to step up their restructurings.
U.S. auto sales have dropped to 15-year lows and are on track to weaken further in October.
The slowdown has also spread to key markets in Europe and expectations for a recovery have been pushed back into 2010.
Ford posted a loss of $8.7 billion for the second quarter and is expected to report a deep loss for the current quarter.
J.P. Morgan analyst Himanshu Patel said in a note on Tuesday he expected both Ford and larger rival GM to burn through more cash and post deeper losses in 2009 because of the slump in sales and tighter credit.
In a sign of the pressure on the industry, GM and Chrysler LLC (CBS.UL) are in merger talks in an attempt to shore up cash and survive the industry slump, sources familiar with the plans have said. GM also held earlier talks with Ford that broke off because Ford preferred to go it alone, sources have said.
The Ford family holds about 3 percent of the automaker but controls about 40 percent of the voting power because of a special class of shares established when it went public in 1956.
Ford's sales in the U.S. market have dropped by 17 percent through September. Over the same period, GM sales have dropped 18 percent. Chrysler is down 25 percent.
Pete Hastings, a fixed income analyst at Morgan Keegan, said it was not surprising that Tracinda concluded it had better investment options.
"As the market has worsened in recent months, the prospects for a further capital injection would have diminished anyway," Hastings said. "It's not as big a blow as it would have been some months ago, but it's hardly a vote of confidence."
Ford's shares were down 7.3 percent at $2.16 on the New York Stock Exchange on Tuesday afternoon.
http://biz.yahoo.com/rb/081021/busin...rian.html?.v=5
Reuters
Kerkorian sells Ford at loss, could dump stake
Tuesday October 21, 2:10 pm ET
By Soyoung Kim and David Bailey
DETROIT (Reuters) - Billionaire Kirk Kerkorian sold shares worth about $18 million in Ford Motor Co (NYSE:F - News) at a big loss and could sell his remaining 6 percent stake after becoming the automaker's largest outside investor this year.
Tracinda Corp, his investment company, said on Tuesday it had sold the shares was working with an investment bank on the potential sale of all 133.5 million shares it still holds.
Tracinda's investment in Ford had been seen as a vote of confidence in the No. 2 U.S. automaker and its turnaround strategy, and Ford shares tumbled 7 percent on the news.
Ford said it remained committed to its restructuring plan under Chief Executive Alan Mulally, who has pushed the company toward a unified operating structure and rushed to roll out new fuel-efficient small cars.
"We remain confident in and focused on our plan to transform Ford into a lean global enterprise delivering profitable growth for all," Ford said in a statement.
Analysts noted that the market for vehicles in the United States and Europe had deteriorated sharply since April when Tracinda began to build a position in Ford.
"Who needs the aggravation of trying to turn around a distressed company in a troubled industry in the middle of an economic downturn?", Shelly Lombard, a bond analyst at Gimme Credit, said in a research note.
"Ford has lost a potential source of liquidity, someone who could write a check for a few billion if it needed the capital," Lombard said.
MONEY LOSING
Kerkorian's pullout from Ford would be a costly retreat for the activist investor, who has a mixed track record with his investments at all three Detroit-based automakers.
Kerkorian surprised analysts and investors earlier this year by spending more than $1 billion to take his stake in Ford for an average price per share near $7.10.
Tracinda began selling Ford shares on Monday at $2.43, according to its statement. That represented a loss of almost 66 percent from what the fund paid on average.
"In light of current economic and market conditions, (Tracinda) sees unique value in the gaming and hospitality and oil and gas industries, and has, therefore, decided to reallocate its resources to focus on those industries," the investment firm said in a statement.
Ford shares have dropped 60 percent since June when Kerkorian raised his stake to 6.5 percent and said he was willing to support the automaker's turnaround with an injection of additional capital.
Tracinda did not request a seat on Ford's board.
Kerkorian previously took a stake of nearly 10 percent in General Motors Corp (NYSE:GM - News).
His adviser, Jerry York, held a seat on GM's board for a short time but resigned after GM rebuffed suggestions for changes and Kerkorian sold the stake.
Kerkorian also was a major shareholder in Chrysler before it was acquired by Daimler in the late 1990s and made an offer to buy the company in 2007 before it was sold to private equity group Cerberus.
ROUGH CLIMATE
Ford shares have lost about 85 percent of their value since 2005 when the U.S. auto market began to weaken and all three U.S. automakers were forced to step up their restructurings.
U.S. auto sales have dropped to 15-year lows and are on track to weaken further in October.
The slowdown has also spread to key markets in Europe and expectations for a recovery have been pushed back into 2010.
Ford posted a loss of $8.7 billion for the second quarter and is expected to report a deep loss for the current quarter.
J.P. Morgan analyst Himanshu Patel said in a note on Tuesday he expected both Ford and larger rival GM to burn through more cash and post deeper losses in 2009 because of the slump in sales and tighter credit.
In a sign of the pressure on the industry, GM and Chrysler LLC (CBS.UL) are in merger talks in an attempt to shore up cash and survive the industry slump, sources familiar with the plans have said. GM also held earlier talks with Ford that broke off because Ford preferred to go it alone, sources have said.
The Ford family holds about 3 percent of the automaker but controls about 40 percent of the voting power because of a special class of shares established when it went public in 1956.
Ford's sales in the U.S. market have dropped by 17 percent through September. Over the same period, GM sales have dropped 18 percent. Chrysler is down 25 percent.
Pete Hastings, a fixed income analyst at Morgan Keegan, said it was not surprising that Tracinda concluded it had better investment options.
"As the market has worsened in recent months, the prospects for a further capital injection would have diminished anyway," Hastings said. "It's not as big a blow as it would have been some months ago, but it's hardly a vote of confidence."
Ford's shares were down 7.3 percent at $2.16 on the New York Stock Exchange on Tuesday afternoon.
http://biz.yahoo.com/rb/081021/busin...rian.html?.v=5
10-21-08, 05:00 PM
#2
Truth is Kerkorians losses on Ford shares are peanuts compared to his loses in MGM, because of this he doesn't have the investment capital he once had, so I suspect this is why he didn't wait for the stock to rebound somewhat before selling so many shares, his announcement didn't move the stock down very much.
10-21-08, 05:52 PM
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Like I said, I don't want to defend Kerkorian. He's a big boy and has made more than his fair share of stupid plays.
But watching the Big Three is like watching a slow speed crash. You know how it's going to end, it's just how long it takes to get there. The General, Ford, and ChryCo are going to burn through probably the better part of $100B in a couple of year time frame and then look for the taxpayer (nobody else will invest in them) for a handout to protect jobs. When you make a loan to somebody who is bankrupt, it isn't a loan. It's just throwing money away.
But watching the Big Three is like watching a slow speed crash. You know how it's going to end, it's just how long it takes to get there. The General, Ford, and ChryCo are going to burn through probably the better part of $100B in a couple of year time frame and then look for the taxpayer (nobody else will invest in them) for a handout to protect jobs. When you make a loan to somebody who is bankrupt, it isn't a loan. It's just throwing money away.
10-21-08, 06:32 PM
#4
Of note would be someone else dumping Ford stock. Time to get out of this stock while you can.
How much money does Ford have in reserves to burn through?
I will hold onto GM for a little while longer in hopes a deal will be made shortly with Chrysler.
Does Bill Ford know something the rest of us don't? If not, why did he elect to sell one million shares of FoMoCo, or about one-sixth of his total common stock holdings in the family business?
So, yeah, he made about $5.05 million from the sale, but you can't help but wonder if there might be something else going on here. Ya, gotta love conspiracy theories...
So, yeah, he made about $5.05 million from the sale, but you can't help but wonder if there might be something else going on here. Ya, gotta love conspiracy theories...
I will hold onto GM for a little while longer in hopes a deal will be made shortly with Chrysler.
10-21-08, 07:13 PM
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Good Question. Don't know if you have been looking at very many co. financial statements lately but they starting to peg to wierdometer as the economic crisis (or whatever you want to call it) spreads its tentacles. I very briefly went to:
http://finance.yahoo.com/q/bs?s=F
and it looks like they went from around $33B at Mar 30 to around $30B Jun 30 so they it looks like they have been burning off around $1B a month early in the year, pretty similar to GM if I remember right. Probably the reason they don't really want anything to do with GM/ChryCo is that cash reserve relative to burn rate. But the wild card is are they accelerating going through their cash reserves from the rate the first half of the year? Everybody figures they are going to increase the burn rate going forward along with GM and ChryCos burn rates. And that's the bet for the stock price. Too much of a gamble for me. I'm just hoping that I can get out of the AAPL I nibbled into today early tomorrow for a little fun.
I kind of remember them selling or wanting to sell their stake in Mazda. Did that go through? The reason I ask is that if you look at the financials they went from an average receivables of 9 or $10B up to something like $115B in that Jun 30 statement. Just wonder what the explanation is.
http://finance.yahoo.com/q/bs?s=F
and it looks like they went from around $33B at Mar 30 to around $30B Jun 30 so they it looks like they have been burning off around $1B a month early in the year, pretty similar to GM if I remember right. Probably the reason they don't really want anything to do with GM/ChryCo is that cash reserve relative to burn rate. But the wild card is are they accelerating going through their cash reserves from the rate the first half of the year? Everybody figures they are going to increase the burn rate going forward along with GM and ChryCos burn rates. And that's the bet for the stock price. Too much of a gamble for me. I'm just hoping that I can get out of the AAPL I nibbled into today early tomorrow for a little fun.
I kind of remember them selling or wanting to sell their stake in Mazda. Did that go through? The reason I ask is that if you look at the financials they went from an average receivables of 9 or $10B up to something like $115B in that Jun 30 statement. Just wonder what the explanation is.
10-21-08, 11:32 PM
#6
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I kind of remember them selling or wanting to sell their stake in Mazda. Did that go through? The reason I ask is that if you look at the financials they went from an average receivables of 9 or $10B up to something like $115B in that Jun 30 statement. Just wonder what the explanation is.
Many companies will be having their earnings call this week so we should start seeing companies third quarter financials and I'm sure it won't look too good. I'm very curious how much money GM lost in the third quarter of 2008. Any takers out there?
10-22-08, 09:20 AM
#7
Moderator
Ford Asks Hiroshima to Buy Mazda Stake
10/22/08 - 01:36 AM EDT
, F TSC Staff
Ford(F Quote - Cramer on F - Stock Picks) has asked Hiroshima Bank to buy some of the automaker's shares of Mazda, according to Japanese media reports.
Related Articles Kerkorian Pulls Out of Ford Chrysler Mulls Nissan/Renault Pact: Report GM Can't Secure Chrysler Financing: Report Market Activity Ford Motor Company| F Hiroshima is expected to purchase a stake, although the size and price of the stake hasn't been determined, reports the Nikkei newspaper.
Kyodo reports Ford will sell up to 5% of Mazda to Hiroshima Bank.
It was reported last week that Ford is finalizing plans to sell shares in Mazda to about 20 Japanese firms, and will likely outline the deal by next month. Ford is considering selling some of its 33.4% stake in Mazda as it struggles with weakening sales and the global credit crunch.
Billionaire investor Kirk Kerkorian on Tuesday said in a regulatory filing that he's ditching his stake in Ford. Kerkorian's Tracinda Corp. on Monday sold 7.3 million shares of Ford for an average sale price of $2.43 a share, according to the filing with the Securities Exchange Commission.
The company also intends to further pare its holdings, including possibly selling its entire 133.5 million-share stake, or 6.1%, of the automaker, "depending upon market conditions and available sales prices," Tracinda said.
Shares of Ford closed Tuesday at $2.17.
10/22/08 - 01:36 AM EDT
, F TSC Staff
Ford(F Quote - Cramer on F - Stock Picks) has asked Hiroshima Bank to buy some of the automaker's shares of Mazda, according to Japanese media reports.
Related Articles Kerkorian Pulls Out of Ford Chrysler Mulls Nissan/Renault Pact: Report GM Can't Secure Chrysler Financing: Report Market Activity Ford Motor Company| F Hiroshima is expected to purchase a stake, although the size and price of the stake hasn't been determined, reports the Nikkei newspaper.
Kyodo reports Ford will sell up to 5% of Mazda to Hiroshima Bank.
It was reported last week that Ford is finalizing plans to sell shares in Mazda to about 20 Japanese firms, and will likely outline the deal by next month. Ford is considering selling some of its 33.4% stake in Mazda as it struggles with weakening sales and the global credit crunch.
Billionaire investor Kirk Kerkorian on Tuesday said in a regulatory filing that he's ditching his stake in Ford. Kerkorian's Tracinda Corp. on Monday sold 7.3 million shares of Ford for an average sale price of $2.43 a share, according to the filing with the Securities Exchange Commission.
The company also intends to further pare its holdings, including possibly selling its entire 133.5 million-share stake, or 6.1%, of the automaker, "depending upon market conditions and available sales prices," Tracinda said.
Shares of Ford closed Tuesday at $2.17.
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10-22-08, 11:00 AM
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Can't say I follow F, don't own it. But for any of you investors, did they ever say where the $110B came from? Looks like a one time event but it is a big chunk of change. Also wonder how much of that $30B is fully accessible in relation to normal operations as they whittle it down?
Even though I see a surprising number of new Ford vehicles on the road, mainly SUVs, I still think auto sales are going to be grim for quite a while which means either get the knife out some more on costs or burn that cash off. Not a good place to be.
Even though I see a surprising number of new Ford vehicles on the road, mainly SUVs, I still think auto sales are going to be grim for quite a while which means either get the knife out some more on costs or burn that cash off. Not a good place to be.
10-22-08, 02:17 PM
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i have around 3k inford lost some money i admit but its time to buy buy buy!! the plans that ford has will bring back up on the chart's i.e new diesel's new euro foucs new fiesta new tauraus will be mondeo based all really good cars for the money
10-22-08, 06:49 PM
#11
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Sort of thought someone would have already gotten this going but a search didn't show it. Not that I am a fan of Kerkorian and I don't exactly feel much sympathy for his losses, but he has given up on Ford. Can't say that I argue with it. US automakers just look like dead money whether or not they get more taxpayer money to retool.
Reuters
Kerkorian sells Ford at loss, could dump stake
Tuesday October 21, 2:10 pm ET
By Soyoung Kim and David Bailey
DETROIT (Reuters) - Billionaire Kirk Kerkorian sold shares worth about $18 million in Ford Motor Co (NYSE:F - News) at a big loss and could sell his remaining 6 percent stake after becoming the automaker's largest outside investor this year.
Reuters
Kerkorian sells Ford at loss, could dump stake
Tuesday October 21, 2:10 pm ET
By Soyoung Kim and David Bailey
DETROIT (Reuters) - Billionaire Kirk Kerkorian sold shares worth about $18 million in Ford Motor Co (NYSE:F - News) at a big loss and could sell his remaining 6 percent stake after becoming the automaker's largest outside investor this year.
10-22-08, 09:04 PM
#12
Lexus Fanatic
evolution is harsh. The big three are on the edge of financial extinction. I met a guy today that told me he is a private contractor that teaches american car dealerships to sell american cars in an arena where people cant stand or trust them. Man it was a cool conversation. I hate american cars and he is pushing them. I think it was an eye opener for the 2 of us.lol cool guy, cool experience. he made some pretty good arguments and points as to the "new" quality of american cars, and I showed him the opinion of the very customers that he trains sales people to convert. I am sure he will bring me up at the next meeting.lol. I told him I would love for GM to give me a CTS for 1 year and see if I will convert. I think thats literally what it would take for me to buy any product from the big 3. Trust is something you earn. not something you take a companies word on. I am just worried that by the time people learn to trust the big 3 again, it will be to late.
Last edited by I8ABMR; 10-22-08 at 09:13 PM.
10-22-08, 09:25 PM
#13
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Mazda to buy 10 pct of own shares in Ford sale-paper
Wed Oct 22, 2008 7:45pm EDT Email | Print | Share| Reprints | Single Page | Recommend (0) [-] Text [+] Market News
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TOKYO, Oct 23 (Reuters) - Japan's Mazda Motor Corp (7261.T: Quote, Profile, Research, Stock Buzz) is planning to buy back half of its own shares to be sold by Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz), Asahi newspaper reported on Thursday.
Cash-strapped Ford, which has a 33.4 percent stake in the Japanese automaker, will likely to sell about 20 percent, the paper said. Mazda wants to buy half, and some 10 firms will buy the other half, it said.
Media have said likely buyers include financial institutions such as Tokio Marine Holdings (8766.T: Quote, Profile, Research, Stock Buzz) and Mitsui Sumitomo Insurance Group Holdings (8725.T: Quote, Profile, Research, Stock Buzz), and others such as trading house Sumitomo Corp (8053.T: Quote, Profile, Research, Stock Buzz) and parts maker Denso Corp (6902.T: Quote, Profile, Research, Stock Buzz). (Reporting by Taiga Uranaka)
© Thomson Reuters 2008 All rights reserved
Wed Oct 22, 2008 7:45pm EDT Email | Print | Share| Reprints | Single Page | Recommend (0) [-] Text [+] Market News
Asia stocks sink on worsening global economy
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TOKYO, Oct 23 (Reuters) - Japan's Mazda Motor Corp (7261.T: Quote, Profile, Research, Stock Buzz) is planning to buy back half of its own shares to be sold by Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz), Asahi newspaper reported on Thursday.
Cash-strapped Ford, which has a 33.4 percent stake in the Japanese automaker, will likely to sell about 20 percent, the paper said. Mazda wants to buy half, and some 10 firms will buy the other half, it said.
Media have said likely buyers include financial institutions such as Tokio Marine Holdings (8766.T: Quote, Profile, Research, Stock Buzz) and Mitsui Sumitomo Insurance Group Holdings (8725.T: Quote, Profile, Research, Stock Buzz), and others such as trading house Sumitomo Corp (8053.T: Quote, Profile, Research, Stock Buzz) and parts maker Denso Corp (6902.T: Quote, Profile, Research, Stock Buzz). (Reporting by Taiga Uranaka)
© Thomson Reuters 2008 All rights reserved
10-23-08, 08:56 AM
#14
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10/23/2008 04:55:34 AM EDT -- Winston-Salem Journal (NC)
Ford, Roush agree to 5-year deal
Oct. 23--HAMPTON, Ga.
Amid the furor over what might be going on behind the scenes in Detroit between General Motors executives and the owners of Chrysler, and questions about what might happen to all those Dodge sponsorships in NASCAR, even to the Dodge brands themselves, if GM buys Chrysler, Ford Motor Company officials have moved quickly to make clear their support of NASCAR racing, by announcing a five-year renewal of sponsorships with car owner Jack Roush.
With Ford stock, like other Wall Street issues, under attack, and with the very future of the American car market at issue, this Ford announcement -- discussed at length with the media yesterday -- wasn't just another news release.
Yes, Roush has been a Ford anchor in NASCAR racing for 20 years now, and the Ford anchor for the past several years.
And, yes, Roush's racing empire, with support of nearly a dozen teams throughout various series, has never been at question, nor has his Ford backing.
And yes, Ford did also announce it was dropping NASCAR Truck sponsorships in 2009 (which, with Dodge's announcement last month that it too was dropping Trucks, is expected to lead Toyota to cut its Truck sponsorships from nine to three next season).
But this move by Ford was clearly designed at reinforcing Detroit's steadfast support of NASCAR racing, at this point in time, and aimed at calming some of the roiling economic waters in stock-car country.
A number of stock-car teams, even powerful Dale Earnhardt Inc., have been struggling to find sponsorship for 2009.
The man making the announcement: Brian Wolfe, who just stepped into the role of Ford racing boss with Dan Davis' retirement two months ago.
"We've been partners with Jack racing Fords, in one form or another, over 40 years," Wolfe said. "He's a strong competitor and has really taken us where we want to be."
Three of Roush's five Cup teams made the championship chase, and until the past two weeks Roush drivers Carl Edwards and Greg Biffle appeared neck and neck with Chevy's Jimmie Johnson. But that crash at Talladega, an engine issue at Concord, and Johnson's victory Sunday at Martinsville have put Johnson in a commanding position heading into Sunday's Pep Boys Auto 500, race No. 6 of the 10-race playoffs.
"There's no question the economic conditions of the country, and the auto industry, is making us look long and hard at all of our commitments," Wolfe said. "However, with NASCAR -- and the marketing platform we have there -- we really believe we still receive a return on investment."
Roush, one of the two largest team owners in the sport, along with Chevrolet's Rick Hendrick, conceded "anxiety, with the challenge the car companies are having, and the broader economy."
But the real anxiety wasn't about Ford's continued support in NASCAR, but with Ford's economic backing. Toyota's entry into the Cup division raised the price of poker, and Roush and Ford have been trying to figure out how to develop and integrate the new Ford engine on the drawing boards for 2009. That new engine would make obsolete a lot of expensive motor stock, and Roush has said for several years that NASCAR executives have been remiss in not calling a halt to the raging horsepower battle that has served no real good purpose -- the Sprint Cup cars this season run with engines that put out nearly 900 horsepower, an incredible amount of power, in a sport that once did quite well with engines producing 650 horsepower.
This was Toyota's second season on the Cup tour, and Ford opened the season with a significant increase in both financial and economic support to meet that challenge.
NASCAR's winged car, which remains controversial -- both Jimmie Johnson and Dale Earnhardt Jr. just a few days ago criticized NASCAR for not being more willing to consider changes to that design to make the racing and passing better -- has become a major financial drain on teams, because of the extreme technology needed to try to master what is widely seen as a misguided physics project. Even Jeff Gordon, a four-time champion, and Matt Kenseth, the 2003 champ, have been unable to master the car yet.
So Roush and his marketing men have been pushing hard -- as have many in NASCAR -- to point out the brand loyalty of the sport's fans and the impact of the sport itself on the American psyche.
While the relative importance of Detroit factory support -- vs. hefty sponsorship support from independent corporations -- can be debated, there is no debate that Detroit's technical support of NASCAR teams the past several years has been critical.
That may be seen as a downside as well as an upside -- to be a player in NASCAR today, a team owner must have solid factory support. That works against smaller, independent teams, once the heart and soul of auto racing. And many of those smaller teams have started folding up shop, unable to compete.
NASCAR's inability, or unwillingness, to deal with that situation has long been questioned. NASCAR had hoped the winged car would be a great equalizer, leveling the playing field for small and big. However, it's been quite the opposite. And yet the sanctioning body has failed to deal with that so far either.
Mike Mulhern can be reached at mmulhern@wsjournal.com.
To see more of the Winston-Salem Journal, or to subscribe to the newspaper, go to http://www.journalnow.com/. Copyright (c) 2008, Winston-Salem Journal, N.C. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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Ford, Roush agree to 5-year deal
Oct. 23--HAMPTON, Ga.
Amid the furor over what might be going on behind the scenes in Detroit between General Motors executives and the owners of Chrysler, and questions about what might happen to all those Dodge sponsorships in NASCAR, even to the Dodge brands themselves, if GM buys Chrysler, Ford Motor Company officials have moved quickly to make clear their support of NASCAR racing, by announcing a five-year renewal of sponsorships with car owner Jack Roush.
With Ford stock, like other Wall Street issues, under attack, and with the very future of the American car market at issue, this Ford announcement -- discussed at length with the media yesterday -- wasn't just another news release.
Yes, Roush has been a Ford anchor in NASCAR racing for 20 years now, and the Ford anchor for the past several years.
And, yes, Roush's racing empire, with support of nearly a dozen teams throughout various series, has never been at question, nor has his Ford backing.
And yes, Ford did also announce it was dropping NASCAR Truck sponsorships in 2009 (which, with Dodge's announcement last month that it too was dropping Trucks, is expected to lead Toyota to cut its Truck sponsorships from nine to three next season).
But this move by Ford was clearly designed at reinforcing Detroit's steadfast support of NASCAR racing, at this point in time, and aimed at calming some of the roiling economic waters in stock-car country.
A number of stock-car teams, even powerful Dale Earnhardt Inc., have been struggling to find sponsorship for 2009.
The man making the announcement: Brian Wolfe, who just stepped into the role of Ford racing boss with Dan Davis' retirement two months ago.
"We've been partners with Jack racing Fords, in one form or another, over 40 years," Wolfe said. "He's a strong competitor and has really taken us where we want to be."
Three of Roush's five Cup teams made the championship chase, and until the past two weeks Roush drivers Carl Edwards and Greg Biffle appeared neck and neck with Chevy's Jimmie Johnson. But that crash at Talladega, an engine issue at Concord, and Johnson's victory Sunday at Martinsville have put Johnson in a commanding position heading into Sunday's Pep Boys Auto 500, race No. 6 of the 10-race playoffs.
"There's no question the economic conditions of the country, and the auto industry, is making us look long and hard at all of our commitments," Wolfe said. "However, with NASCAR -- and the marketing platform we have there -- we really believe we still receive a return on investment."
Roush, one of the two largest team owners in the sport, along with Chevrolet's Rick Hendrick, conceded "anxiety, with the challenge the car companies are having, and the broader economy."
But the real anxiety wasn't about Ford's continued support in NASCAR, but with Ford's economic backing. Toyota's entry into the Cup division raised the price of poker, and Roush and Ford have been trying to figure out how to develop and integrate the new Ford engine on the drawing boards for 2009. That new engine would make obsolete a lot of expensive motor stock, and Roush has said for several years that NASCAR executives have been remiss in not calling a halt to the raging horsepower battle that has served no real good purpose -- the Sprint Cup cars this season run with engines that put out nearly 900 horsepower, an incredible amount of power, in a sport that once did quite well with engines producing 650 horsepower.
This was Toyota's second season on the Cup tour, and Ford opened the season with a significant increase in both financial and economic support to meet that challenge.
NASCAR's winged car, which remains controversial -- both Jimmie Johnson and Dale Earnhardt Jr. just a few days ago criticized NASCAR for not being more willing to consider changes to that design to make the racing and passing better -- has become a major financial drain on teams, because of the extreme technology needed to try to master what is widely seen as a misguided physics project. Even Jeff Gordon, a four-time champion, and Matt Kenseth, the 2003 champ, have been unable to master the car yet.
So Roush and his marketing men have been pushing hard -- as have many in NASCAR -- to point out the brand loyalty of the sport's fans and the impact of the sport itself on the American psyche.
While the relative importance of Detroit factory support -- vs. hefty sponsorship support from independent corporations -- can be debated, there is no debate that Detroit's technical support of NASCAR teams the past several years has been critical.
That may be seen as a downside as well as an upside -- to be a player in NASCAR today, a team owner must have solid factory support. That works against smaller, independent teams, once the heart and soul of auto racing. And many of those smaller teams have started folding up shop, unable to compete.
NASCAR's inability, or unwillingness, to deal with that situation has long been questioned. NASCAR had hoped the winged car would be a great equalizer, leveling the playing field for small and big. However, it's been quite the opposite. And yet the sanctioning body has failed to deal with that so far either.
Mike Mulhern can be reached at mmulhern@wsjournal.com.
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10-23-08, 09:09 AM
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So I'm wondering if it is a poor choice to invest in Ford right now at 2 bucks a share. If I were to make a small investment, there isn't too much to lose even if it hits a $1 a share.