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Buy Ford and GM stock and make 5%

Want to make a five-percent return when 10-year treasuries are paying around two percent? Ford (F) and General Motors (GM) have solid balance sheets, strong cash flow, solid earnings, and growing markets. By all accounts, they are smart investments. But the market is down on these stocks. Why? Some of the stupid excuses include: They are cyclical companies The Detroit 3 have lost 3.5 million in sales since 2000 The world economy is shaky GM recently filed for bankruptcy Their markets have peaked They haven't changed their ways Let's take these criticisms one by one: They Are Cyclical Companies Yes, they are cyclical. Every company is cyclical. Every industry is cyclical. Some more than others, but not every company is immune from swings in the market. Banks used to be 'non-cyclical' leader, not anymore. Airline stocks are just as cyclical as auto stocks, yet they are trading at multiples greater than the auto industry. Why? And what accounts for the irrational stock price for Tesla (TSLA)? At least Ford (F) and General Motors (GM) make money and have positive cash flows. In fact, both companies have a net positive cash position. They have more cash on hand than liabilities. Auto sales in the United States hit a record 17.5 million vehicles in 2015. During the Great Recession, Ford (F) and General Motors (GM) cut their break even points to 10 million vehicles per year. Anything above an annual U.S. volume of 10 million vehicles is profit. And what a profit they make. Sales of Ford's F-150 continues to be the best-selling vehicle in the United States for over 30 years. Detroit 3 Have Lost 3.5 million in Sales Since 2000 Automotive News reports General Motors (GM), Ford (F) and Chrysler (FCA) have lost a combined 3.5 million vehicles sales since 2000. So how can they be making more money? Two big reasons – Fleet Sales and the UAW. Fleet Sales The Detroit 3 used to own car rental companies to keep their factories running. Ford owned Hertz (HTZ), General Motors owned all of National Car Rental and 29 percent of Avis, and Chrysler, the forerunner to Fiat Chrysler (FCA), used to own Thrifty Car Rental and Dollar Rent-A-Car. The Detroit 3 owned these rental companies to have a place to sell their bad product and keep their factories running. These were low margin sales, and in many cases, were money losers for the Detroit 3. They no longer own auto rental companies.

Ford preparing camera-based Front Lighting System

Ford's European Research and Innovation Center in Aachen, Germany is in pre-development on two new lighting technologies that Ford expects to be available "in the near-term." The Camera-Based Advanced Front Lighting System uses GPS and a video camera in the rear-view mirror housing to move the adaptive headlights with the road terrain. When the car detects a roundabout or an intersection, for instance, the light beam widens to offer a bigger view of what's coming from the side. If GPS detected the intersection, the location is tagged so that the beam automatically widens when it is encountered again. The Spot Lighting system uses an infrared camera behind the grille, and is similar to but less complex than systems employed by Mercedes-Benz and Audi. When the infrared camera detects a potential hazard like a person or an animal in or near the road up to 390 feet ahead, it can shine one of two LED spotlights on the danger. A display in the dash cluster will highlight the object with a yellow or a red box, depending on the how close it is and how dangerous it might be. Even though there are only two spotlights, mounted next to the fog lights on the lower front bumper, the system can detect up to eight objects at a time. Don't expect to see these features come to the US, though. Our regulations remain opposed to such headlight trickery, so until that changes, Ford says it's focusing these developments on the European and Asian markets. The video above shows how it works, the press release below has more details. FORD DEVELOPING ADVANCED HEADLIGHTS THAT POINT OUT PEOPLE, ANIMALS IN THE DARK, AND WIDEN BEAMS AT TRICKY JUNCTIONS - Ford is developing advanced lighting technology that enables drivers to more easily see potential hazards when driving at night - Camera-Based Advanced Front Lighting System widens beam at junctions and roundabouts after interpreting traffic signs - GPS-enabled system uses forward-facing camera to remember roadways and direct lighting to help drivers better see bends in the road – effectively lighting the way home on previously travelled routes - Spot Lighting uses infra-red camera to detect pedestrians, cyclists, and animals, and highlight the potential hazards; system can detect up to eight potential hazards and highlight two highest priorities using specially designed headlights and on-screen display AACHEN, Germany, July 17, 2015 – Driving at night, particularly on unlit roads, can be a nerve-wracking experience.

Farley reacts as UAW expands strike against Ford, GM

Members of the United Auto Worker union walk out of the Chicago Ford Assembly Plant as Lance Williams from Lansing, Ill., waves the UAW flag Friday. (AP)   As the United Auto Workers walk off the job at an additional Ford and General Motors plant, Ford CEO Jim Farley addressed investors and members of the media Friday, pleading the case for the company's latest overture to the union and addressing both public and investor concerns regarding the core issues facing American manufacturing.  Farley made a public case for Ford's efforts to resolve the dispute, expressing frustration with the ongoing stalemate and noting both the concessions Ford offered before the strike began and the signing of a contract with Canada's Unifor. Farley also acknowledged UAW President Shawn Fain's success in getting the union's message out, quipping: "Shawn has been on TV more than Jake from State Farm at this point." The first-ever simultaneous strike against the Detroit Three automakers enters its third week with threats of continued expansion, but little in the way of obvious concrete progress.  "If the UAW’s goal is a record contract, they have already achieved this," Farley said. "It is grossly irresponsible to escalate these strikes and hurt thousands of families." Farley also lamented the fact that EVs have become the subject of partisan conflict, with the company's recently announced battery production facilities taking heat from both pundits and investors as Ford was forced to press pause on the venture while negotiations continue. Former President Donald Trump dropped in to Michigan this week to declare EVs the enemy of blue-collar jobs. "They've become a political football, and that's a shame," he said. Friday saw an expansion of the UAW strike to Ford's Chicago assembly plant and GM's Lansing, Delta Township, Michigan, assembly plant, covering about 7,000 workers, Fain said in an announcement, bringing the total number of workers on the picket lines to 25,000. The strike will not include any additional members at Stellantis, where talks have reportedly been more productive. The Ford and GM plants went on strike at noon Eastern today (Friday). Ford builds the Explorer and Lincoln Aviator in Chicago. GM's Delta Township plant builds Chevy Traverse and Buick Enclave. "Despite our willingness to bargain, Ford and GM have refused to make meaningful progress," Fain said in a video address Friday morning.