Governor, Help Feed Ford

Fletcher promises Ford aid? First, Merrill rips Ford’s guts out. Afterward, our Governor prances around their remains.

Fletcher should not offer new money. He should stop stealing from Ford. Repeal the Alternative Minimum Tax… I mean Calculation. Governor, Ford knows how to fish. Stop stealing their food.

Merrill downgrades Ford to sell

Citing a nearly 30 percent climb in Ford Motor's shares since mid-December, Merrill Lynch this morning recommended investors sell the stock. Analyst John Murphy wrote to clients that the market appears to be taking into account a significant profit recovery in 2009 and 2010, but not considering the risks associated with the three years or more it will take to recover. "The real challenge will be turning around results in the midst of a product cycle slump, and ultimately fixing the reliance on one product, the F-Series," Murphy wrote.

Murphy cited three possible developments that could drive the stock higher in the short term: The potential announcement of a new restructuring plan by CEO Alan Mulally The potential for significant relief from the new UAW contract in September Asset sales beyond the sale of Aston Martin.

Ford shares were down 19 cents, or 2.2 percent, at $8.46. For the latest price click here

Fletcher to propose more aid for Ford

A bill to allow the state to offer additional incentives to keep Ford Motor Co.'s two plants operating in Jefferson County will be filed in the General Assembly later this week. "It’s just a tool we want to put in place that would help us, we think, keep Ford vibrant in Kentucky down the road," Gene Fuqua, interim state Economic Development secretary, said today.

"In general, it attempts to allow Ford to recover enough tax credits and enough wage assessments to maintain their operations in Kentucky if they choose to do certain things." Fuqua said, however, that the matter was "still under negotiations. No commitments from Ford to do anything. And there’s no commitments from us to do anything. It’s simply a tool that we’re working on to put out there and get into law so if we need it we can negotiate with it."

Fuqua and Gov. Ernie Fletcher were asked about the status of retaining about 8,000 Ford jobs in Jefferson County during a meeting today of the house budget committee. Ford, one of the county’s largest employers, recently announced that it lost $12.7 billion in 2006, in part because of lagging sales of sport-utility vehicles and pickup trucks. The two Ford plants in Jefferson County make such vehicles, and concerns have been voiced about their futures.

Last week Fletcher proposed that $10 million of an anticipated $401 million state surplus be spent on training for Ford workers. Committee Chairman Rep. Harry Moberly, D-Richmond, asked how important it is that lawmakers approve that money. "We feel this is critical now because of what Ford is doing to reduce their workforce through … early retirements and bringing new people in to keep their plant running smoothly, and keep their people trained," Fuqua told the committee.

But he said that the $10 million is just a short-term solution, and that a bill to be filed as soon as tomorrow would help address keeping the Ford jobs in Jefferson County over the long haul. Ford and state officials have previously discussed the possibility of tax incentives for the company. Fuqua and Fletcher said during the meeting and in later interviews that the bill was not final and that they could not yet divulge its details. The governor said the proposal would "allow us to pick up more flexibility in offering them an economic incentive package that I think will be more appealing.

"Asked to elaborate, Fletcher said, "It would be tax incentives. We need some flexibility on how we can get that to address the plants. … There’s some flexibility that we need in looking at the two plants as one."

"The governor, accompanied by more than 20 top administration officials, appeared for nearly an hour before the committee, explaining his plan for the projected surplus which he outlined last week in his State of the Commonwealth address. While many key lawmakers oppose reopening the budget this year, key members of the committee endorsed efforts to retain the Ford jobs. It would be devastating to Jefferson County and all of Kentucky if they happen to close one of those Ford plants down there," Moberly said. House Speaker Pro Tem Larry Clark, D-Okolona, said, "It’s a full-court press to try to keep that plant here. I think we’re at the point where we can’t afford not to do something."