Ford Confident Of Profits

Alan Mulally,CEO of Ford Motor Company(F),still expects the automaker to reach profitability in 2009.Speaking yesterday at a plant opening in Nanjing,China,Mulally said the housing slump will likely slow the economy.Ford is keeping a close eye on the situation.No doubt it is also carefully watching General Motors Corporation (GM) negotiate with the United Auto Workers union,with which it also needs to deal.For the first time since 1976,GM workers went on nationwide strike in the midst of talks yesterday.UAW president Ron Gettelfinger bitterly criticized GM,accusing it of conducting a one way negotiation,to the disadvantage of the workers.From Thursday to Friday,GM made only one concession-regarding a cap on profit-sharing.The UAW had constantly worked with GM over recent years,so it was disappointing to see them act as if they really didn't care about the strike deadline.While the strike continues,GM stands to lose 100 million dollars a day.It has 32 billion in cash on hand.As 12,200 vehicles a day are not produced,Canadian plants will have to shut down by Thursday or Friday,and Latin American plants by Saturday.In the U.S.,73,000 workers are idle,drawing 200 dollars a week from the UAW.The main problem in the talks seems to be the UAW's insistence on job security,which is difficult for GM to commit to for years in advance.David Reilly of Rydex Investments thinks the strike would have to go on for a long time before the stock market to be affected.Yet with the credit crunch and slowing economic growth,defensive caution is warranted by investors.Consumer staples and utilities look safe to him.Investors might consider Procter and Gamble (PG) and Duke Energy (DUK) in those sectors.Among automakers,Ford shares rose yesterday,while GM shares fell.