Professor Elam

Here is another view of Ford’s sale of Aston Martin.  I suggested in the last post that I would rather run Aston with its new owners than Ford.  Read this article which also discusses the sale of Jag and possibly Volvo. You will recall that I handed out a column suggesting that Ford in fact, with its legacy pension costs, may not be worth anything.

So, stop and think! What are they doing? Think about what we study in terms of sunk costs, budgets, and future planning.  Is Ford selling the right assets to keep Ford afloat?  Or would the shareholders be far far better off if for example,

Ford broke itself into multiple groups.  The Premier Group might or could have included Jag, Aston, Volvo, and Land Rover.  Then you could create Ford Trucks, and finally Ford Cars with Mercury, Lincoln, and Ford.  Now, my choice would be to keep shares in Premier or preferred stock as Ford did in Aston, and firesale the rest of it, possibly to the UAW that is so proud of its contracts. Let’s move the headquarters of Premier back to London and open up shop in Dubai where people have money to buy these things and EXPECT to pay out the nose.  Let the UAW partner with the state of Michigan if they think so much of their contracts!  Great, let the state of Michigan bail out the Unions!  How about that one?  IF MI says yes, wonderful, let em have it.If MI says no, well gee unions now who ya gonna call?

What say you?