Weekly Wreck

Ford - A One Trick Pony?

You would think with a number of directors who have been on the Board since the 80s and 90s Ford [F] would be a firm with some institutional memory. You would think that they would remember what happened the last time gasoline prices rose before phasing out almost all US car sales.

Unfortunately just as gas prices begin to go back up Ford has decided to cede the auto market to its competitors. Betting that the obscure chicken tax will continue to protect the market for light trucks seems to be a bit risky too as more and more ways around it are found, even if repeal, at this time seems a remote possibility.

All these trucks probably won’t be good news for CO2 emissions either as the Europeans are currently discovering. Regulations on emissions and gas mileage that seem to be disappearing in the current political environment could just as easily come roaring back in a few years should there be a new much more progressive congress and likeminded executive in the White House.

With all these risks it would seem to be an unwise strategy to make Ford into a one trick pony with just the Mustang as it’s only remaining true car, a car that doesn’t exactly get the best gas mileage either.

Of course, in the end, its employees and shareholders who will likely pay for this short-term thinking at Ford, just as they did the last time around.