Car Wars: Is Ford Better Than GM?

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Is Ford better than GM?Things are getting ugly at the Ford (F) assembly line. The automaker is currently shelling out an average of $58 an hour in pay and benefits to its stateside workers -- reportedly the highest in the industry -- and the Dearborn, Mich.-based company is trying to shave that down.

The timing could be better: In neighboring Detroit, union workers at General Motors (GM) ratified a collective bargaining agreement Wednesday morning.

When there's peace at one company and the potential for labor unrest at the one with higher costs, the easy decision would be to go with GM.

I can't. I won't.

Ford Flex and Fiscal Restraint

Maybe I'm biased. I traded in my GM car for a Ford Flex earlier this year. And I was so impressed with the turnaround job by Ford CEO Alan Mulally that I also became a Ford shareholder.

First, the car: I'm more of a tech nerd than a gearhead, so I confess that my springtime car search found me circling back to Ford because of its superior dashboard toys. I was paying GM's OnStar a $19 monthly ransom for telematics features that I can now largely duplicate for free with Ford Sync and my Bluetooth-enabled smartphone. The MyFord Touch technology that's being incorporated into some of Ford's lines is even more impressive.

As for the stock, well, my car has treated me better than my investment, but there's more to it than just that. While a panhandling Chrysler and GM accepted their government bailouts, Ford was the lone holdout. If you don't think consumers are grateful that Ford didn't bring taxpayers in to clean up its mess, think again.

Is Ford just making better cars, or are consumers turning to Ford as the more fiscally responsible auto manufacturer?

A Tale of Two Cheapies

Both stocks are cheap on a P/E basis. Ford and GM trade for just 5 times this year's projected profitability. GM's government bailout and eventual bankruptcy cleaned up its balance sheet, but Ford has the benefit of not being under the same kind of public scrutiny as your Uncle Walt who hit you up for a big loan a few years ago.

The future will continue to reward Ford for its relative prudence. That's why I'll stick with Ford.

Longtime Motley Fool contributor Rick Munarriz owns no shares in any of the stocks in this article, except for Ford. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors.



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19 Comments

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Ronald Mayfield

.G.M did not to do their retirees any favors on this contract. Or the U.A.W. left the retirees out in left field . We lost our back side.

October 18 2011 at 4:10 PM Report abuse rate up rate down Reply
milofilomay

Wall street is socialized now ! Where is all the money from AIG ??? < Nothing but idiots on this board! Whining about unions and American cars and loans ! Jealous ? YEP they are .

October 02 2011 at 2:46 PM Report abuse rate up rate down Reply
milofilomay

Its funny to see people run thier mouths about bailouts of the auto companies !Lets get this right ? In 09 the economy was in a shambles ! < My how soon idiots forget? The credit market was frozen ! The housing markets went deep south wiping out all of the value of homes across this nation! Two wars for then 8 yrs now 10 and draining the treasury , Bush tax cuts draining more money ! < Where are all the jobs tax breaks are to create ! STILL WAITING in ALL 50 STATES ! < to wall street too ! Obama gave them loans! The FEDs have had near ZERO int rates at their window for wall street banks for 4 plus yrs now ! < Still not lending to small business! The feds had QE2 < did nothing to anybody in main street America !So to all the whining little idiots out there i could go on and on and on ! So seeing what Obama walked into ? < The idiots have no clue! Facts are facts.

October 02 2011 at 2:38 PM Report abuse rate up rate down Reply
jack

You don't know car quality until you own one for twenty years. All I can tell you is my 26 year old Toyota runs better than a new American car. I never got good service from Ford, Oldsmobile, Cadillac, Chevrolet, Dodge, Chrysler.

September 29 2011 at 6:45 PM Report abuse -1 rate up rate down Reply
1 reply to jack's comment
milofilomay

Yes Toyota the most recalled car company in the world ! My sister had on and it never started in the rain and the sunroof leaked thats that toyota quality ! FIAT stands for fix it again toyota now! LOL

October 02 2011 at 2:50 PM Report abuse rate up rate down Reply
cgold13702

Battery problems and bad trunk struts so far on the new Fords.
Initial quality is good, but these cars are falling apart within the first year.

September 29 2011 at 6:40 PM Report abuse -1 rate up rate down Reply
Bill

The Fix Or Repair Daily let me down once too often for me to buy another. And I come from a heavy Found On Road Dead family. Not once has a Chevy let me down.

September 29 2011 at 6:01 PM Report abuse -2 rate up rate down Reply
1 reply to Bill's comment
savemycountry911

FORD is much better than Chevy these days. I don't want a Government Motors car.

September 29 2011 at 8:28 PM Report abuse +1 rate up rate down Reply
Gumby

In all fairness, I love Ford!
only if Ford can get better !!

September 29 2011 at 5:03 PM Report abuse -1 rate up rate down Reply
1 reply to Gumby's comment
savemycountry911

You don't need a car. You have Pokey.

September 29 2011 at 10:02 PM Report abuse rate up rate down Reply
Gumby

I know that many of you are very interested in the excellent worksmanship of foreign cars and you will get laid off because of lack of work here in America... Are you sure that a car is more important than your job??? I wonder?? unless that car is so terribly made, I can understand... HUH? The UAW has to understand that every dollar they demand is a dollar worse in car workmanship in Ford and GM cars... Often, we end up shoving cars into car shops for hundreds of dollars in repairs over just one dollar in shoddy parts... UAW can be really stupid sometimes!!

September 29 2011 at 5:02 PM Report abuse -1 rate up rate down Reply
1 reply to Gumby's comment
savemycountry911

So ride Pokey.

September 29 2011 at 9:45 PM Report abuse +1 rate up rate down Reply
Gumby

The real reason Ford didnt go into bankrupcty is because the Ford family owns 40% of the stock that would be worthless if Ford is bankrupt.. This was why Ford borrowed billons instead of holding a hat in front of our govenrment for easy billons!! The govenrment tried to balance favors toward both GM and Ford by awarding Ford with billons for research while almost none for GM.. GM got enough ... So all is fair... Now which is better... America has no choice but to start taking market share away from Toyota , Honda and even Hyundai... Over half of all new cars are foreign names.. I dont care where they are made but the names themselves.. Are you sure that you want your friends to tell you where their new foreign cars are made which is here in America or what? You see what I am trying to say... ? You can always buy Toyota or Honda stock here if you think that Toyota and Honda will take over the entirre America car market soon enough, be my guest??

September 29 2011 at 4:59 PM Report abuse rate up rate down Reply
geowaldman

So, nothing on ratings by JD Powers, Consumer Reports, repair, mpg, insurance comparisons?
Hasn't Ford suggested a return to paying dividends?
The $58 dollar figure badly needs substantiation.
Do we care that you drive a Flex? Is it relevant to an investor or a buyer?
Weak, superficial and shallow reporting and writing. I guess it fills a space and makes money for you.
In a time of high unemployment and great needs, it doesn't serve us well.

September 29 2011 at 2:36 PM Report abuse rate up rate down Reply