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Investor Sheds a Major Stake in Ford

Published: October 21, 2008

" . . . The failure of General Motors, Ford and Chrysler would have far-reaching economic and social consequences.

Together, the automakers employ more than 200,000 workers in the United States and provide health care and pensions to more than a million Americans. In addition, their operations are lifelines to 20,000 auto dealers and countless suppliers, and the source of major tax revenue to states and local governments.

Investors have been fleeing the stocks of G.M. and Ford since the spring, when high gas prices shifted consumers’ tastes away from the big sport utility vehicles and pickups that were Detroit’s most profitable offerings.

Since then, a weakening economy has frightened many shoppers away from dealer showrooms, leading to billions of dollars in losses for the car companies in the weakest auto market in 15 years.

The financial crisis on Wall Street has accelerated the downturn. Because of tighter credit standards by the automakers’ finance arms and other lenders, some prospective new-car buyers have been unable to get loans, further choking off sales.

Overall auto sales have slumped 12.8 percent in the first nine months of the year, but G.M. sales have dropped 17.8 percent, Ford’s by 17.4 percent and Chrysler’s by 25 percent.

The decline appears to be accelerating this month, prompting analysts to further cut their forecasts for the industry. . . . "​

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