Mr Biz on DougStephan.com

"Make it patriotic and cool to own shares of Ford, before it's too late."

Dear Mr. Ford;
I heard you are going to visit with Ford Motor Co. investors at various
locations around the country next week, and wanted to offer some
suggestions, before it's too late.
Ford has a good and proud story to tell, that is, if it's not told before
it's too late.
First, let's have full disclosure here. If Ford goes down the tubes, so
do I and many of my clients. We were longtime buyers of Ford (NYSE: F), and
bought more at $20 per share. Oh, did I mention that we kept buying at $17
and $14, and $12? Well, I'll come really clean: we bought lots more Ford
stock at $9, and last week when the quoted price for a few days started with
the number "6" we purchased even more.
First, fire all your advertising agencies and get new ones. Do all of the
spots yourself, the way Dave Thomas of Wendy's used to do. You know the
story, so tell it.
America has only two major auto makers left. Ford is one of them.
Americans should support Ford before it's too late.
Around 1900 there were about 96 car manufacturers. By the 1920s there
were fewer than 20. Sounds sort of like the Dot-coms, right? Even a guy named
Durant who started GM was belly up in his own auto company by 1928. Success
and prosperity are not guaranteed, but Ford can continue to be a success, if
it's not too late.
Most kids shopping for their first new car, and most folks leasing
another car, don't know about Henry Ford and his little repair shop, or his
garage, or his efforts to finance his first factory. It's an American success
story. Tell it proudly and loudly to a new generation, before it's too late.
To lots of Jewish curmudgeons around the condo pools down here in South
Florida, Henry Ford was the poster boy for anti-Semitism, deservedly or not.
The apocraphyl tales abound. Tell these folks that probably most of the
gents and ladies sipping high balls in country clubs in 1925 or 1965 were
anti-Semites. Ask them about how many Jews and other immigrants improved
their lives--their stores, their sales, their products, because of four
generations of quality affordable cars and trucks for the masses? How many
of the charities, schools, theaters, museums, and hospitals they DO like,
were helped in the past 100 years by endowments and foundations with the Ford
name? Go after their business and loyalty. If they had problems with the
Ford name in the past, tell them to get over it, before it's too late.
Tell the American public that if they think that the "too big to fail"
mentality will always keep Ford afloat, they are perversely and sadly
mistaken. When Chrysler languished at $3 a share, there were powerful union
leaders--many in the public sector--with names like Al Shanker, George Meany,
Victor Gotbaum, and Jerry Wurf, who rode to the rescue. Their union brothers
and sisters and their pension funds had too much to lose. They rallied their
reserves, and an organized labor-underwritten bailout, became a government
bailout, propelling a former Ford executive to international fame. Those days
are over. The days when Continental Illinois Bank was deemed "too big to
fail" are over. No one saved Enron. No one is saving K-mart. An attempt to
bail out the airline industry has not worked. Ford fights this one alone, or
with its workers and customers, that is, if it's not too late.
And speaking of workers, why not ask the American public whether they
would like their kids to work for a company such as Ford, or perhaps for
Adelphia Cable, Global Crossing, WorldCom, K-Mart, or Cucamonga Fiber Optics
Dot Com Tofutti Fuel Cell Inc.? Tell them about the tens of thousands of
Ford workers--from custodians to engineers--who were given, or provided the
ability, to have a home computer. Tell them how a marketing researcher in Sao
Paulo, now has a seamless email and computerized communication system, with
an econometrics expert in Stockholm, London, or Washington? Ask them whether
they should reward innovation and quality with their investment dollars, or
hand money to the gurus of hype and swipe? Do they like the sizzle or the
steak? Tell them about your UAW partners, and their ability to support your
efforts at labor-management cooperation, before it's too late.
Make sure you mention something called the F-150. Tell them that for
every Bridgestone-Firestone or "recall" negativity, there are a hundred
success stories at Ford. In a world in which touchy feely nostalgia freaks
look soulfully at the reincarnation of the VW Beetle, and ego trippers in
gated communities want the Lexus logo on their undergarments, it's a Ford
truck which holds the all time motor vehicle sales record for most of their
adult life!
Tell them that I know this wealthy guy who could afford any car,
anywhere, any time. He drives his 1996 F-150. It has all of the size,
comfort, reliability, and panache he needs.
Tell them about the Thunderbird which has risen like the phoenix of the
freeway, and turns heads.
Talk to the American consumer about two gallant global nameplates--Volvo
and Jaguar--which are part of the Ford family. Mention the cradle-to-grave
Jaguar care program, and the safety reputation of Volvo. Tell middle class
American families that Volvo will remain the only European carmaker to
maintain, and expand a European delivery program. Encourage American families
to take their first-ever European vacation, drive a new car, and ship it
home--all with a free plane ticket and import price discounted from local
sticker prices.
While on the Jaguar quality concept, why not have an orgasm of
transparency? A brilliant coup of marketing? In 20 years of radio
broadcasting, and public speaking, I have yet to conduct a poll, or ask an
audience, "Would you pay an extra $5,000 to never, ever, pay a cent for auto
maintenance again?" in which drivers did not overwhelmingly vote "yes."
Think about it, Mr. Ford. I didn't qualify the question. A kid looking for a
$12,000 Ranger, or a soccer mom looking at a loaded $40,000 Expedition. Both
of them would pay up a flat, one-time, financed $5,000 fee, to never, ever
pay a parts, labor, or "loaner car" fee. They don't want a grease monkey
chauffeuring them to the office on the Lolly Trolley while their car is being
repaired. Re-insure the dealer's floor plans for liability, fix their cars
for free, and give them a loaner. The Gomer Pyle School of Auto Research
shows that "Surrprise! Surrprise!" folks who like the loaner or rental cars
often buy them. On an overseas trip I just rented a new Crown Vic for a month
and loved it. I've told everyone I know about it. Shake up the industry,
before it's too late.
Tell the American people about the joint venture with Mazda which
produced the Ford Escape. Every other manufacturer has tried to copy it.
Every urban cowboy can trade up to a V-6, the 16-inch wheels, and even 4WD
for about $20,000. Spread the word, before it's too late.
Talk about the rumors that Ford Credit might have deep trouble if Ford
bonds are downgraded beneath investment grade. Explain to the American public
what happens when they have to go to private finance companies or their
not-so-friendly local banker for auto loans. Talk about the farmers,
ranchers, commercial outfitters, and millions of other Americans who are on
flexible payment schedules, allowing them to make their payments on vehicles
critically needed for their livelihoods during the months when they actually
have some money. Name names and case studies, before it's too late.
Take control of your own DRIP (dividend re-investment program), and offer
special discounts, coupons, and incentives to small investors. Encourage your
youngest and poorest customers to participate in the American dream. Drop all
minimum account requirements to a $25 initial investment and as little as $50
a month. Let Ford become its own paying agent, and co-mingle the DRIP
shareholders into the entire spectrum of the Ford Family. Let every American
high school kid who would like a shiny new Ford Focus also receive a share of
Ford treasury stock as a gift. Make it patriotic and cool to own shares of
Ford, before it's too late.
And, Mr. Ford, while on the subject of financing, rethink Ford's
ill-fated attempt to get into the banking and thrift business a few years
ago. Times have changed. Some of the same Washington lobbyists who made
Worldcom and Enron household names, destroyed the "Chinese Wall" of the
Glass-Steagal Banking Act of 1933. Citibank now lays off its ridiculous
third world loans in a consortium linked to Travelers Insurance and Salomon
Smith Barney. Smith Barney brokers tout overpriced stocks, pumped up by lame
analysts reports, to potential IPO customers. Insurance agents have lobby
access to bank customers facing low CD rates, and can sell them some
insurance products they don't want, and don't really need. Could a
revitalized Ford Bank or Ford Financial Corp. do worse? Isn't there an
opportunity to start with the base of employees, union members, retirees,
credit union members, customers and suppliers, and provide cost-effective
financial and banking services? It's worth a try, before it's too late.
And what about the union members and their families? Ford reached a
two-year agreement with Canadian auto workers last week, averting troubled
waters. The news hit one paragraph in some newspapers, and nothing in
others. Tell the story of the successful negotiations yourself, before it's
too late.
In the age of NAFTA and globalization, the hottest selling car in Mexico
is a VW. German? Not, really, apparently, it's a VW made in Brazil. American
investors who built Ford are tired of reading about the success of a Ford
executive in an Australian subsidiary, a plant manager in Brazil, or the
tribulations of domestic production and bottom lines in Argentina. Ford
makes too little in too many countries whose currency restrictions have
turned a transnational leader, into a captive of tinhorn provincial
nationalism and restrictive trade. Maybe it's time for Ford to redirect it's
transnational efforts to nations whose currencies are pegged to the US dollar
or use the dollar as a de facto local currency. Local workers and suppliers
should, of course, still profit in their own national domaine. But whether
it's Coca-Cola, MicroSoft, or Ford, structures have to be reinforced which
permit some of the local enterprise to accrue to the good will of the
ultimate parent. If a country such as Turkey, or Peru is so restrictive as to
make it impossible to legally repatriate Ford profits to the United States
and U.S. shareholders, then perhaps it's time to carefully review exactly
which countries should have their futures tied to Ford infrastructure
investments and currency risks. Isn't it worth a thought, before it's too
late?
By now you get the idea. If this were a chain letter, in a week you would
have 1,000 pages of amateur experts giving you and your cohorts at ground
zero free advice. The funny thing is that many of their ideas are good ones,
and many of their criticisms are correct. There's time to correct things,
before it's too late.
Finally, you and most other Fortune 500 CEO's seem confused by the
legalities of the new and enforced rules of ethics and governance. It's a
given that "past performance is no guarantee of future results." We're not talking about empty Enron entreaties to have employees dump higher
percentages of their 401k's into Enron stock. We're not talking about Merrill
promises of "buy, accumulate, buy!" while around the coffee machine and email
screen managers snicker "hahahaha."
You have a responsibility to report what you believe. I have this deep
conviction, and suspicion, that you believe what I believe. Purchase time
during NFL games, the World Series, The Sopranos, Days of Our Lives,
Smallville, the Super Bowl, MTV, WWF, NASCAR, CNBC, CNN, Bloomberg-TV, and
Sponge Bob Square Pants. Look the camera in the eye and say:
" If you are a working person who doesn't intend to retire for10 years or
more; if you don't have a catastrophic illness, and can take the risk of
investing some spare money, then Ford Motor Company has a message for you.
Based on what we know about our people and our products, in ten, or 20, or 30
years, no one is going to care whether you paid $20 a share for Ford or $7 a
share for Ford. In the scheme of investment cycles and the corporate success
in America, we honestly feel you will be very, very, well rewarded. So, think
about investing in Ford, at historically low prices--before it's too late."
Thank you for your time.

Yours truly,
Mark Scheinbaum
Chief Investment Strategist
Kaplan & Co. Securities

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