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Tuesday, July 18, 2006

Widely Traded 48 Hour Clock: Ford Loses Speed (F)

Ford Motor has recently made a point of telling the press that the "Way Forward", the company's restructuring of its money-losing North American operations, is doing just fine, thank you.

The auto giant's head of sales told the Associated Press that the company will launch a number of new cars for 2007 that it believes will turn around the company's drop in sales. However, the recent beginning of the new model roll-out and the extended warranty offer the company has made to bring in new customers does not seem to be working. Several media sources say that dealership traffic does not appear to have increased in the last several days.

In addition, the pace of Ford's model introduction lags the industry. According to the Associated Press: "The average showroom age for Ford products from 2007 to 2010 is 3.5 years, the oldest among all manufacturers, Merrill Lynch analyst John Murphy said in his annual industry overview released last week. That compares with an industry average of 2.8 years, he said".

Ford is still dependent on vehicles like the F-150 pick-up, not known for its fuel efficiency, for its most profitable sales. WIth a 3.5 year cycle to produce new models and no let up in gas prices, Ford may be talking out its hat.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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