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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 hiring 800 more salaried workers than originally expected

Ford is on a roll this year, with excellent quarterly earnings and better-than-expected vehicle sales leading to 800 more job opportunities with the Blue Oval. In January, Ford announced that it wanted to hire 2,200 salaried employees, but, since then, that figure has been revised to 3,000, representing a 36-percent increase over original projections. About 1,500 of those jobs remain, 80 percent of which are technical professional positions.
"Engineers and technical professionals are in as much demand as our cars, trucks and SUVs," says Felicia Fields, Ford Group Vice President for Human Resources. Helping to spur this job growth are increasing market share on both the West and East Coast and robust demand for the Ford Escape and F-150.
To find job candidates, Ford is reaching out to them via Facebook, Twitter and LinkedIn, in addition to the company's corporate career site. The Blue Oval is also ramping up its presence on college campuses.

MyFord Touch getting second update, extended warranty

There is no doubt that Ford has had its hands full fielding complaints with its MyFord Touch and MyLincoln Touch systems these days, but looking to keep its customers happy, Ford is once again upgrading its infotainment systems and extending the warranties. Despite having just sent out updates for its systems back in March, Automotive News says that customers are still complaining about the speed and ease of use.
Vehicles with MyFord Touch will now get a five-year, unlimited-mile warranty, while the MyLincoln Touch will have a six-year, unlimited-mile warranty. Previously, the systems were covered under basic warranties (three-year, 36,000-mile for Ford and four-year, 60,000-miles for Lincoln).
What is being referred to as "version 3.5" for the MyFord Touch and MyLincoln Touch systems will be mailed out (or downloaded) next month for owners of cars without navigation and in January for cars with nav. Owners of hybrids, plug-ins and electric vehicles will get the update sometime in the first quarter of next year.