Wall Street: Ford Takes Future Stock

Ford sticks by new product plans to weather the storm!!!

In a week where Ford (F) stock has hovered at historic lows of $1.75-1.90 per share and more volatility on Wall Street has ensued, news from the glass house is that they are pushing through the smoke undaunted.

The Detroit News reported this week that Ford CEO Alan Mulally and his chieftains at Ford have been holding marathon meetings almost every day for the past month to craft a plan to move forward through our market collapse. In the meetings hard fought debates are taking place over future product plans, production priorities, and financial strategies.

While companies like General Motors and Chrysler have decided to put a lot of future cars and programs on indefinite hold to save money, Mulally is fighting strong on keeping Ford’s critical new product development plans in place. Despite pressure to set aside sweeping new plans for revolutionary product changes he is steadfast in favor of pressing forward, the economic gloom bedamned.

"We're only going to be in business if we create products that people really do want and value," Mulally told The Detroit News in an exclusive interview Tuesday. "This is the essence of creating a viable Ford.”

The company is said to be proceeding with their product and financial plans without consideration of a government bailout loan. While they are indeed lobbying Washington for emergency cash to help keep them on a firm footing going into 2009 they are not acting as if it is coming.

Their decision to keep the future product programs in place are part of their strategy to transform the company much in the way that Chrysler did in the early 1980’s. That company went to the federal government for a bailout back then, but had an ace up their sleeve. That trump card was the “K-Car” and a new game changer called a “mini van”. It was those new products developed in the face of adversity that transformed Chrysler into a powerhouse for decades and allowed them to pay their loan back to the tax-payers plus interest.

Ford is planning on more cost cutting to bolster their bottom line and much of it will come from the slashing of executive bonuses, cutting of white collar staff, and reducing advertising. Within the next two years, a new deal with the UAW will phase in that lowers their labor and health care costs as well. Other financial options are being reviewed but product development is being kept as the number one sacred cow.

Ford is facing straight into the headwinds. News this week came that GM and Chrysler have cancelled plans to have new product debuts and press conferences at next week’s Los Angeles Auto Show. Ford on the other hand will bravely debut a host of key new products including the 2010 Mustang, Fusion & Milan Hybrids, and a new Lincoln MKZ.

"Whoever is going to invest or loan us money wants to know we're taking the actions to create a viable company going forward," he said. "We are absolutely taking the appropriate actions. We've demonstrated that we're making progress,” said Mulally.