One of Ford’s (F) senior executives told the press that its share of the US market would drop from its current 17% to as low as 14% next year. Ford has been tempering expectations for its turnaround for some time. But, this was a company that had a 26% share ten years ago, well after Japanese cars hit the US market.
Ford pointed out that the recent trend that saw pick-up and SUV sales bounce up was due to incentives more than the fall in gas prices. It also said the part of the drop in its share was based on stepping away from unprofitable fleet sales. Wall St. has to wonder why Ford stepped into that business to begin with.
Unfortunately, Ford is not talking anything UP. As time passes, the pessimism about the company’s future becomes almost palpable. At many other companies, management tempers expectations so that they can be reached or exceeded. At Ford, expectations are merely lowered so that they can be lowered further later.
Ford’s need to borrow $18 million is another sign that things are not going well. The company’s current cash balance of $23.6 billion (September 30 10-Q) would be adequate to get the automaker through its "Way Forward" restructuring.
But, that would be too much to ask.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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