Monday, March 12, 2007

Governor’s Fordfare Strategy

Anyone hear Governor Fletcher’s cursing?

Fletcher: “Damn it Marty, Ford is not floundering. If this continues, our Democratic brethren will never pass Fordfare.”

Ryall: “What’s the solution?”

Fletcher: “We’ll have to increase their taxes.”

Ryall: “Taxes in an election year? How Governor?”

Fletcher: “I know, we will have Pence sell them as revenue enhancement.”

Ford shares gain 4% on analyst's upgrade

Credit Suisse this morning lifted its sell recommendation on Ford Motor's shares, rating the stock the equivalent of hold. "We have reviewed our expectations for Ford's first quarter ... We think Ford may post a slightly better than expected result in North America," Credit Suisse analysts wrote in a research note to clients.

Credit Suisse estimates Ford will report a pre-tax loss of $1.4 to $1.5 billion - better than the consensus expectation of a $1.7 billion loss for the quarter ending later this month. Ford rose 31 cents to close at $7.93 today.

Navistar says it will keep making Ford diesels

Navistar International said late today it will keep producing diesel engines for Ford's Louisville-built Super Duty trucks as long as Ford continues paying for them. The agreement falls well short of settling a dispute between the two over whether Ford owes Navistar money or the other way around. Navistar spokesman Roy Wiley said the new order from a Michigan court signed today keeps the status quo established last week when a judge told Navistar to resume shipping engines and Ford to pay for them.

The agreement overrides a temporary order issued in the case, but the two sides will continue negotiating a settlement of the dispute. The announcement late today comes as Ford said it expects to have the Super Duty truck plant back to three full shifts by Monday. The two sides have been arguing over who’s responsible for the cost of recalls in past years and Ford has been withholding some of what it owes Navistar for the new engines to recoup its costs.

Navistar had cut off the supply of engines for the high-profit Super Duty, saying they would resume once Ford starts paying in full. Navistar idled plants in Indianapolis that employ 1,200 people, but the plants restarted Monday under a court order for Navistar to resume shipments of the engines. The Kentucky Truck Plant on Chamberlain Lane cut back production last week, shut down on Friday and was running at most two shifts this week.

At hearing Wednesday before Oakland County Circuit Court Judge John J. McDonald in Pontiac, Mich., attorneys for Navistar and Ford sought time to negotiate a settlement of the dispute. Navistar had said it wants Ford to pay back $125 million it held back from Navistar earlier this year. Ford says it is allowed under its contracts to withhold funds from suppliers in warranty disputes. Navistar says Ford warranty claims are bogus and disputes whether the contract allows such measures.

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