Ford Dealer Offers FoMoCo Stock With Purchase

From the Louisville COURIER-JOURNAL on Saturday:

Ford stock offer aimed at revving up car sales;
Indiana dealer gives shares with purchases

By Patrick Howington
[email protected]

Forget the free floor mats or rust-proofing package.

Southern Indiana car dealer James Hodge is offering a novel incentive to entice jittery consumers to buy a new vehicle: Ford Motor Co. stock.

His dealership, Heritage Ford-Mercury in Corydon, started this week offering 100 shares of Ford stock with every new car sold, and 200 shares for buying a truck or a sport utility vehicle.

"We're just trying to maybe create some traffic," Hodge said. "We're just like everybody else out there -- just trying to think outside the box."

The offer started [last] Monday via television commercials. By yesterday afternoon, Hodge said he had sold a new F-150 pickup truck, a Taurus X and an Edge crossover. For at least the pickup buyer, who had been negotiating for about a month, the stock offer seemed to sweeten the transaction, Hodge said.

"We got the deal," he said [Friday]. "That is the important thing. It has been one heck of a month. Traffic picked up today."

Ford shares closed [Friday] at $2.84 -- a fraction of their price a few years ago. The shares sold for about $13 five years ago and twice that 10 years ago, after adjusting for stock splits.

But Hodge is hoping prospective buyers will be wooed by the potential windfall if the stock rebounds -- as he believes it will. For example, if Ford shares climb to $20, the 200 earned by an SUV buyer would be worth $4,000.

"It may just pique some folks' interest," he said, perhaps appealing to people who otherwise "wouldn't go out and buy stock."

Hodge said he bought 4,000 Ford shares for the promotion. That's enough to cover sales of 40 cars or 20 trucks or SUVs -- which would be a bonanza for the small dealership.

"If (the promotion) sells us 10 or 12 cars, that would be great," Hodge said.

Before the economy soured, he said, Heritage typically moved 10 to 15 new vehicles a month. Last month, it sold only seven, along with 52 used models.

Car dealers everywhere are seeing a slump. Detroit automakers reported sales dropped by half last month.

Such numbers have dealers looking to lure or reassure recession-spooked consumers. For example, some automakers and dealers offer to let buyers who lose employment within a year return the vehicles and walk away from lease or loan obligations.

Hodge said people want to buy cars despite their concerns about the economy, but are held back by the credit crunch: They either can't get a loan or can't afford the higher down payment that some banks are requiring.

"I believe Ford will survive this" recession, he said.

Hodge hopes the dealership will survive it too. In the meantime, "I'm just trying to sell cars."

Current value of Ford Stock is $2.76 per share, so that's basically an incentive currently worth $276 for a car, or $552 for a truck.

I guess to counter that, GM would start offering US Savings Bonds...

The problem with that is, the financial sector has been saying for years that savings bonds are the worst investment vehicle there is. [These are the same folks who tell us that the stock market only goes up, too...so it's a perfect place to put your retirement nest egg.]

Which is why the government is selling their debt to China--'cause most Americans won't buy it, at least not in any volume.

It wont be enough to entice me in. Our 3 vehicles are an 04 with 52,000 miles,an 00 with 90,000 miles,and a 91 with 165,000 miles. At todays prices they are going to have to last a long-long time.

I think what Big Fred was saying, with tongue in cheek, was that GM stock would be even less of an incentive than savings bonds (or possibly, with all the bailout money they've gotten, perhaps their incentive payments should be the "stock" of their majority owner, the U. S. Guvment.

Ford stock was $1.40 or so December/January. Locally a railroad worker though Ford was good enough at that price and invested $1600.00/1000 shares. Late february was worth $3000.00 or so when sold. Citibank reported small profit and stock went up to about $2.00+. Smoe people watch the stocks and find undervalued stock to buy. Somebody on these boards is recommending a Canadian Copper mine stock selling for a price earning ratio of about 4/1. RN

Maybe Government Motors should also offer Ford stock with the purchase of a GM car or truck. Now theres an incentive to help the anointed one sell new Volkswagons (meaning "the peoples car" as Adolf put it).