Investors Better Off With GM Shares Instead Of Ford

Analysts are recommending investment in GM rather than Ford. Ford is under the public microscope and the focus of analysts. This week, the shares have fallen 13%, representing damage to the group of more than US$ 10 bn.

The management is accused of having known about the problems – which have led to the voluntary recall of Firestone tyres – for around two years. Consumer groups and official authorities want an answer to the question whether Ford has worked (ie changed or improved) on the suspension of its vehicles in Venezuela in order to overcome the problems there. The reaction at the stock exchange has probably gone far too far, as, even if the company had to mount a vehicle recall, the figure of US$ 10 bn is too high.