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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (5468)	1/29/2002 7:18:06 PM
From: MulhollandDrive	Read Replies (2) \| Respond to of 33421

Hello John, Nice to see you again. Looks like ENE is setting the tone for investor "recourse" for losses..I think it will get quite ugly politically before it's over. Ford sitting on a bunch of "high priced" metal to be used in cars they don't sell.<g> siliconinvestor.com Shareholders Sue Ford Over Loss Jan 29 6:26pm ET DETROIT (Reuters) - Ford Motor Co. was hit with a shareholder lawsuit on Tuesday over the heavy loss it incurred last year due to a decline in the value of precious metals. The world's second-largest automaker took a pretax charge of $1 billion in the fourth quarter to cover the loss in value of metals, mostly palladium, that it apparently stockpiled in the mistaken belief that their prices would rise rather than fall last year. Adequate supplies of the metals, including platinum and rhodium, are important for automakers since they use them in exhaust cleansing catalytic converters. The lawsuit, seeking class-action status and filed in the U.S. District Court for the Southern District of New York, alleges that Ford artificially inflated its stock price in 2000 and 2001 by failing to disclose that it had made, and failed to hedge, large commitments to purchase precious metals at "very high prices." Filed by law firm Lovell & Stewart, the suit also alleges that Ford executives "made false and misleading statements to conceal top management's errors and speculation, and Ford's true financial and competitive position," Lovell & Stewart said in a statement. As an example, it said the decline in precious metal prices gave the outward appearance of being favorable to Ford when it was actually hurting the company's business and prospects. Ford had no immediate comment on the lawsuit, in which it is accused of having violated at least two sections of the U.S. Securities Exchange Act of 1934. Lovell & Stewart said the suit was filed "on behalf of all persons who purchased or otherwise acquired the common stock of Ford Motor Company between December 1, 1999, through January 12, 2002." Dearborn, Michigan-based Ford, which ousted former Chief Executive Jacques Nasser in October, posted its first annual loss since 1992 last year. Its net loss of $5.07 billion in the fourth quarter included an after-tax charge of $4.1 billion, mostly in write-downs related to its restructuring plan. The plan calls for 35,000 job cuts, affecting about 10 percent of Ford's worldwide work force, and the closing of at least five North American plants as part of its bid to break even this year and return to profitability in 2003.