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Ford logoShares of Ford (F) fell sharply on Friday after the company "missed," reporting a quarterly result that fell below analysts' expectations.

Not counting some "special items," Ford's profit last quarter was $1.1 billion, or $0.20 a share. That's significantly below the $0.26 a share expected by analysts, and well below the $0.30 Ford made a year ago. That strongly suggests some ongoing weakness in the auto giant's global operations.

But despite the disappointing profit number, Ford's core business is actually in great shape.

Ford, It's Not You!

First and foremost, automakers live or die by their products. Ford's product line is first-rate, maybe the best it has ever been -- and arguably among the best in the world.

Ford vehicles like the Focus and Fiesta are fully competitive with -- maybe even better than -- similar cars from Toyota (TM), Honda (HMC), and other global leaders. And for the first time in its history, Ford is selling the same basic lineup of cars in markets around the world.

The Ford Fiesta that is one of Europe's top sellers is the same Fiesta that you can buy at dealers in the U.S. The Ford Focus that has become a market leader in Russia -- and happens to be produced in a Ford factory in St. Petersburg -- is the same car that Ford also makes in Detroit and sells here.

That wasn't always true. For years, Ford made different versions of its cars for different markets. The Ford Mondeo, a midsize sedan sold in Europe, was a completely different car from the midsize Ford Fusion sold here. And the same thing was true for the Focus, the similar Ford Kuga and Escape SUVs, and other Fords in other markets.

Two huge budgets, two huge efforts, and two sets of parts and suppliers and engineers. For two cars that were basically the same.

As Ford CEO Alan Mulally told me awhile back, while talking about what he found when he arrived at Ford in 2006, "That just never made any sense."

'One Ford' Around the World

Needless to say, Mulally has ensured that Ford's not doing that anymore. The striking new Ford Fusion that was the hit of the Detroit Auto Show is the same car that will be rolled out -- wearing Mondeo badges -- in Europe later this year. The all-new 2013 Escape SUV is also the Kuga SUV that Ford will be building in Germany.

One set of designs, sold around the world. That allows Ford to maximize its investment in each new car and truck. That in turn makes for better quality, which allows Ford to get better prices, which gives Ford more money to invest in the next round of vehicles -- and strong profits, even during tough times.

Ford calls this its "One Ford" plan, and it's the key to the company's remarkable turnaround -- and the reason Ford continues to be solidly profitable in a tough economic environment.

And make no mistake: While things are looking up somewhat in the U.S., economic conditions around the world remain challenging.

Ford's Global Businesses Face Challenges

Ford's North American division actually posted a hefty profit increase -- $889 million for the fourth quarter, up from $670 million a year ago. Ford's selling more cars and trucks here, and it's selling more of its most profitable models (trucks, SUVs, and cars with lots of options). That's all great news.

The story around the world is less cheery. Ford lost money in Europe and Asia, and posted just a thin profit in South America. Europe, of course, is suffering from rough economic conditions due to debt crises and deep government cutbacks. Those conditions have forced other automakers, including rival General Motors (GM), to discount heavily or lose sales, making profits scarce for all of the major players in the region.

In Asia, Ford suffered some production losses as a result of severe flooding in Thailand, but the news isn't all bad -- the company is building new factories in China to meet demand there, and those costs cut into profits.

And in South America, particularly Brazil, Ford's in the middle of a major product transition. Within a couple of years, the region will be fully on board with the "One Ford" product lineup, and that should help increase both sales and profits. In the meantime, profits are slim.

The Upshot: All Ford Needs Is This

Long story short, Ford's mostly in great shape -- and if only the world's economies would cooperate, it would have the numbers to show for it. The company's debt is down, its cash position is strong, its products are excellent and continuing to gain traction, and its margins -- the amount of profit it makes on each sale -- continue to improve.

It might be awhile before the stock catches up. But for those with some patience, right now could be a good buying opportunity.

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. The Motley Fool also owns shares of Ford, and Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford.



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Mike

It’s been said the US goes to war to protect its oil supplies, but doesn't it really go to war to ensure the continuation of the petrodollar system?

The Iraq war provides a good example. Until November 2000, no OPEC country had dared to violate the US dollar-pricing rule, and while the US dollar remained the strongest currency in the world there was also little reason to challenge the system. But in late 2000, France and a few other EU members convinced Saddam Hussein to defy the petrodollar process and sell Iraq's oil for food in euros, not dollars. In the time between then and the March 2003 American invasion of Iraq, several other nations hinted at their interest in non-US dollar oil trading, including Russia, Iran, Indonesia, and even Venezuela. In April 2002, Iranian OPEC representative Javad Yarjani was invited to Spain by the EU to deliver a detailed analysis of how OPEC might at some point sell its oil to the EU for euros, not dollars.

This movement, founded in Iraq, was starting to threaten the dominance of the US dollar as the global reserve currency and petro currency. In March 2003, the US invaded Iraq, ending the oil-for-food program and its euro payment program.
There are many other historic examples of the US stepping in to halt a movement away from the petrodollar system, often in covert ways. In February 2011 Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), called for a new world currency to challenge the dominance of the US dollar. Three months later a maid at the Sofitel New York Hotel alleged that Strauss-Kahn sexually assaulted her. Strauss-Kahn was forced out of his role at the IMF within weeks; he has since been cleared of any wrongdoing.

War and insidious interventions of this sort may be costly, but the costs of not protecting the petrodollar system would be far higher. If euros, yen, renminbi, rubles, or for that matter straight gold, were generally accepted for oil, the US dollar would quickly become irrelevant, rendering the currency almost worthless. As the rest of the world realizes that there are other options besides the US dollar for global transactions, the US is facing a very significant - and very messy - transition in the global oil machine.
got gold?

January 30 2012 at 10:51 AM Report abuse -1 rate up rate down Reply
gopispoison666

Keeping the new Ranger out of the USA is bad business, and it's showing that the auto companies do not want Americans to have choices. The state of the pickup market is an abomination with companies collusively refusing to market a front wheel drive vehicle, atrocious mpg ratings on both small and large pickups, and NO plug in hybrids being marketed or even planned to be marketed to the general public. If you need a pickup, the auto companies want you to be trapped in a 30 year time warp.

January 30 2012 at 10:15 AM Report abuse -1 rate up rate down Reply
1 reply to gopispoison666's comment
Mike

YOU JUST MADE CLEAR WHY THE BIG 3 AND THE UAW WITH THEM SHOULD HAVE BEEN LEFT TO FAIL! A NEW COMPANY(S) STARTS WILL BE MORE COMPETITIVE AND RESPNSIVE TO CUSTOMERS AS THEY MUST BE TO ATRACT THEM. BAD MANAGEMENT CAN ONLY BE FIRED BY THE MARKET THROUGH BANKRUPTCY. BAILING OUT THE UAW INSURED MEDIOCRE AT BEST CONTINUED MANAGEMENT. WAKE UP LIB! GOT GOLD!

January 30 2012 at 10:45 AM Report abuse +1 rate up rate down Reply
brehtomm

i will NOT buy a ford next time as the paint on my van when i bought new is falling off everytime is rains, i was offered at time of buying $1500 insurance againt that but was assured that problem was taking care of an they where not offering that much longer, shame on you ford as i hoping to keep this for a long time but now there is rust coming through the earlier paint lost. a 2006 dark blue E150 van 33,000 now runs great paint falls offer when raining 23,300.00 paid off original dollars. how much would ford corp offer me no saleman!!!! nothing RIGHT. LOOKING TO BUY SOON AGAIN.

January 29 2012 at 9:26 PM Report abuse rate up rate down Reply
Larry

Why does the largest Ford sedan have such terrible glass? I was seriously thinking of getting one, and discovered that each and every one on the lot had ripples and waves in the front windshield and the back window. It was a relief to get back behind the wheel of my Toyota.

January 29 2012 at 8:58 PM Report abuse -2 rate up rate down Reply
fh1939

nothing comes close to a TDI nothing

January 29 2012 at 7:18 PM Report abuse +1 rate up rate down Reply
BENJAMINGHRIST

AS A LIFE TIME FORD DRIVERS LIVING MD. I HAD TWO MANY BAD EXPERIENCES WITH FORD DEALERSHIPS
TO GO BACK TO BUY A FORD.THAT IS WHY I DRIVE A DODGE.
FORD CHANGE YOUR SALES SYSTEM OR LOSE ME FOREVER

January 29 2012 at 6:57 PM Report abuse rate up rate down Reply
BENJAMINGHRIST

If Ford would teach their salesman how to sale lifetime Ford drivers like myself I would not leave for Dodge.

January 29 2012 at 6:53 PM Report abuse -1 rate up rate down Reply
Mike

Tehran Pushes to Ditch the US Dollar

India and Iran are negotiating deal to trade oil for gold. Does this matter, you ask? It strikes at both the value of the US dollar and today's high-tension standoff with Iran.

Officially the US & EU is Tehran must be punished for efforts to develop a nuclear weapon. Sanctions on Iran's oil exports meant to isolate Iran and depress the value of its currency to a point that the country crumbles.

Sanctions will not achieve their goals. Iran is far from isolated and its friends - like India - will stand by the oil-producing nation until the US backs down or acknowledges the real matter the American dollar as the global reserve currency.

In the 1970s a deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on oil trade with the US dollar as the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up. Countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit.

If the US dollar loses its position as the global reserve currency, the consequences for America are dire. The dollar's valuation stems from its lock on the oil industry - if that monopoly fades, so too will the value of the dollar. Global fiat currency relationships will change. Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.

GOT GOLD?

January 29 2012 at 5:39 PM Report abuse -2 rate up rate down Reply
DR.Eli

please delete mefrom this list.

January 29 2012 at 5:14 PM Report abuse rate up rate down Reply
oldhorsema

This isn't directly related to Ford but it does provide me with an opportunity to be heard and perhaps someone with more sense than I, can provide a sensible explanation. I own shares in Corning which had a disappointing third quarter and next day the stock dropped 11 percent. P&G had an equally poor fourth quarter and on the day it was announced the Dow was down 70 and yet the stock dropped less than one percent. I don't understand the disparity. Can anyone explain it to me ? Thanks

January 29 2012 at 5:06 PM Report abuse rate up rate down Reply