Ford Gambles on Electric Cars
Research for Online Investors

by John Dalt

5/19/09

Ford is the only surviving domestic auto producer that has not taken government bailouts.  They evidently have not cleaned out all their stupidity.  Ford announced they would spend $550 million to refit a plant to produce electric vehicles.  This sounds like an echo of GM’s announcement last fall to break ground on a new factory to build the Volt.  I commented on Nov. 7th, “What a bunch of idiots, they have enough cash to last 12 months and promise to deliver an electric car in 24 months. Then start building a factory that will not be completed until after they are broke!.”

How can a company justify spending over half a billion dollars on a plant to build a car that will not achieve production numbers to make it viable?  Ford sold approximately 1.5 million vehicles last year.  At this sales level, electric vehicles would have to make up over 20% of their TOTAL sales to pay this factory off in 10 years.  If you take out the heavy trucks, pickups, and imports almost every car left would have to come out of this factory.  Another obvious question, why would they keep any production in Michigan?  Why not go to a right-to-work state?  Let the economic development people build the factory FREE, and hire lower wage employees.

Hispanics are the fastest growing demographic in the U.S., making up 15% of the population according to the census bureau.  Another interesting statistic is this 15% of the population accounts for 25% of all live births.  Uno, dos, tres….

Who are the top two shareholders of GLD?  Hedge fund Paulson and Company bought 31.5 million shares, while Lone Pine purchased 26.5 million shares in the first quarter!  Maybe you should follow the leaders.  We own gold miner stocks in Galt’s Long Term Portfolio and GLD in the SwingTrader.  I do not think our holdings rank in the top ten, but an important part of our portfolios.  We are up over 55% in the long-term portfolio.  Our subscribers have made enough on this one position to pay our dues for years…..join us today.  You save fifty bucks, only $49 per year!  Read about all we offer, for less than $1 per week.

California’s voters are deciding today what to do about their state’s budget deficit.  Should they increase taxes even more, or place limits on the legislature?  The ‘no raise’ for legislators is what I like the most.  No pay raises until they balance the budget!  Sacrilege.  Colorado is advertising in California to businesses interested in moving for lower taxes.  California’s population is shrinking as people flee the high taxes and loss of jobs.  Meanwhile Gov. Arnold Schwarzenegger showed up in Washington to endorse OH! Bama’s CAFÉ standards press conference.  Just what we need, California answers to national problems. Two big spenders, no good can come of it.

OH! Bama is watching out for us.  He is the economist in chief, raising vehicle mileage standards 40% over the next five years.  He did this around the congress, by executive order.  It will be interesting to see if any of the dems in congress raise their collective heads and scream about this power grab.  Do not worry how much it costs; think how much money you will save.  He must have gone to the same school as my daughters; dresses do not cost anything, if they are on sale!

“The marvel of all history is the patience with which men and women submit to burdens unnecessarily laid upon them by their governments.”

William H. Borah

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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