No. of Recommendations: 6
If you haven't seen this, it was published last night. http://www.fool.com/investing/general/2011/02/23/rising-star...

Pent-up demand, I believe, is going to be a real driver (haha) for all the automakers, even if we do slip into a second recession. Older cars, harsh winters, and tiredness of having to drive the same old clunker leads to more people purchasing. Add higher fuel costs and the greater economy of today's models (especially the electrics and hybrids) and I'm not even sure another recession will totally stop this driving force.

Then there's something else which is really hard to quantify. Ford is the only one of the Big 3 that didn't take government money and avoided bankruptcy. Under Mulally's leadership, the automotive division is now in a net cash position for the first time in years. The kind of pulling yourself up by your bootstraps that Ford has done, and not getting a handout, I believe instills a sense of pride and esprit de corps in Ford's employees. We have a couple of Ford employees posting over on the Stock Advisor discussion boards, and they've commented on this. The "One Ford" initiative is real, not another corporate reshuffling that the rank and file knows won't do anything to improve the company or their role.

My final point, and tied to the above, is the strength of Mulally as CEO. I remember when he was first appointed and their were all kinds of comments along the lines of "What can an airplane guy teach us?" (He came from Boeing, if you remember.) Well, it turns out that he's taught the company to take pride in its work and itself and he was able to see the oncoming trouble soon enough for the company to do something about it, cutting costs and attacking the balance sheet so that he didn't have to go hat in hand to Congress, asking for help.

Yeah, General Motors came out of bankruptcy with a fresh start, but I'll bet you that they still have the same thinking at the top that got them into their mess in the first place. And Toyota's leaders lost a lot of face (and customer confidence) thanks to its highly-publicized problems last year. Ford's straighter thinking is a huge competitive advantage that should make this one a great investment.

We'll see.

Cheers,
Jim
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