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Friday, September 9, 2011

Ford stock forecast 2011-2012

Ford stock forecast 2011-2012 : Ford now sees U.S. new vehicle sales this year falling below 13 million -- which was previously was the bottom of the range Ford had forecast for 2011. Ford had expected Americans to buy 13 million to 13.5 million new vehicles this year.

Ford remains profitable, posting earnings of $9.28 billion over the last two years after losing $30.1 billion from 2006 through 2008. But Ford executives have stressed that they must remain competitive in labor costs to keep making money. Ford's U.S. labor costs, including benefits, average about $58 an hour, vs. about $56 for General Motors and $49 for Chrysler.

Ford raised prices three times this year to offset higher materials costs, but also was helped by vehicle shortages at Toyota and Honda after the March 11 earthquake. The Japanese companies are expected to have dealers restocked in the fourth quarter and then spend aggressively on incentives to regain lost market share.

Investors will look closely at Ford's new labor deal, as will credit-rating agencies in deciding whether to restore Ford's credit rating to investment grade. Because Ford borrowed more than $23 billion in 2006 to weather the downturn, it still pays high "junk-bond" interest rates on its debt ($14 billion as of March 31).

Ford Motor Company's products, marketing, and union contract should position the automaker to compete better than in the past. Still, it will take time for the company to regain market share in the United States, as some consumers are still very loyal to Japanese and European brands.

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