NYSE

A Sign of Stock Market Times Ahead?

Has the entire stock market community been shaken? The news was not altogether a surprise, but that did not dilute the bitterness of the pill as Ford announced plans to cut last quarter 2006 production by a whopping 20%. Rapid political developments all over the world keep investors flitting from one topic to another, but it is hard not to feel an overwhelming sadness at the eclipse of a star.

There are times when a stock market has to look beyond the numbers. Ford is no ordinary company. It is a symbol of the industrial revolution that swept the last century, and will always remain as a gem of free enterprise in industrial history. The freedom and self-expression that an automobile can convey are unmatched. Productivity in logistics owes so much to commercial vehicles. Ford has nurtured these treasured concepts for generations.

However, no stock market can dwell on sentiment alone for long. The unpleasant facts are that the unbroken decline of Ford is bad news for the U.S. economy. We may find the taxes from somewhere else, but who can substitute the jobs lost by blue collar workers who are accustomed to working on assembly lines in shifts? Many people laid off by Ford in the U.S. will suffer with their families, even as the company continues to support associates abroad.

The stock market is a democratic institution. It is time for individual retail investors of the company to stand up and ask the hard questions. Why did the management not see the decline of the large SUV and truck segments earlier? Is the gas price inflation really such an unforeseeable bolt from the blue? Why is Toyota able to offer better fuel economy and better pricing? Some questions must be addressed to Unions as well: have they acted in the best interests of the communities which depended on Ford for a decent living?

Ford is unlikely to be the only stock market listed company to fall on bad times during the coming months. We need answers so that both Ford and other vulnerable companies can make strategic turns and reinvent themselves. Let us not forget that folks who make cars cannot make laptops-even if IBM gets that job back from China!

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