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Analyst Still Rates Ford Stock as 'Strong Buy'

18 September 2000

Detroit First of Michigan Analyst Still Rates Ford Motor Co. Stock as 'Strong Buy'

            But Sees Lower Quarterly EPS With Firestone Situation

    DETROIT, Sept. 15 The following is being issued by First
of Michigan, a member of the National Association of Securities Dealers, CRD
number 1994975:

    Richard J. Hilgert, First of Michigan's automotive analyst, has issued
"Strong Buy" ratings for the stocks of Ford Motor Company and three major
automotive suppliers, ArvinMeritor, Inc., Lear Corp., and Tower Automotive,
Inc.
    He has, however, reduced the current quarterly Earnings Per Share
estimates for the stocks of all four companies, following Ford's announcement
that it would extend the shutdown of facilities affected by the Firestone tire
recall situation.
    "In the very near term," says Hilgert, "we think the stocks affected will
continue to be under pressure as uncertainty looms with regard to another
shutdown extension and the potential for further estimate reductions.  In the
long-run, we view this development as a one-time event, implying a window of
buying opportunity for long-term holders."
    Ford Motor Company (F-NYSE) shares, says Hilgert, "are attractively valued
and offer investors 12 month price appreciation potential to $40 per share."
At the same time, "We reduced our 3Q/00 estimate for Ford by $.10 to $.41.  We
estimate the additional shutdown translates into approximately 7,500 Ford
Rangers and 5,000 Ford Explorers, or a reduction of $270 million in revenue
for the 3Q/00."
    "The Firestone tire development and the resulting media attention is a
near-term situation that casts a cloud over investors' perception of Ford
production and brand image," Hilgert advises.  "Despite the media attention,
Explorer demand remains strong and we see need for further manufacturing
interruptions.  Once the cloud dissipates, we think the stock will quickly
rise to its 'pre-Firestone' levels in the high-$20 range."
    Commenting positively on the stock of automotive Troy, Michigan-based
supplier ArvinMeritor, Inc., Hilgert said:  "The combination of Meritor
Automotive and Arvin Industries created an opportunity for ArvinMeritor
(ARM-NYSE) to sell an expanded array of products in heavy and light vehicle
markets."
    "As a result, we expect ArvinMeritor to achieve its long-term goal of
10% annual growth in revenue, excluding acquisitions.  The favorable
fundamentals created by the merger have enabled the shares to hold near their
high for the year, despite a temporary external problem.  This implies to us
that the stock might move quickly to our $24 target, when this cloud lifts,"
opined Hilgert.
    As for the earnings per share reduction, Hilgert stated:  "We have reduced
ARM's 4Q/00 revenue by $3 million.  Our new 4Q/00 EPS estimate is $0.56, down
$0.03 from our previous EPS estimate of $0.59.  ArvinMeritor has greater
exhaust content on the Ranger but also supplies exhaust components for the
Explorer."
    Southfield, Michigan-based Lear Corp. drew favorable praise from Hilgert
who advised:  "Lear (LEA-NYSE) is the only auto supplier capable of providing
one-stop shopping for roof-to-floor complete interiors.  Lear would be a
logical choice for designing complete vehicle interiors for auto makers
seeking to differentiate their products using electronic components."
    "In our view, the current stock valuation does not accurately reflect
Lear's earnings potential and the trend toward greater use of vehicular
electronics," says Hilgert.  "We believe Lear offers investors upside
potential to $40 over the next 12 moths, with longer-term potential to its
former highs in the low $60 range."
    "We have reduced Lear's 3Q/00 revenue estimate by $5 million as a result
of Ford's prolonged work stoppage.  LEA has door panel, electrical
distribution and electronic content on both the Ranger and Explorer," advises
Hilgert.  "In addition, Lear produces seat systems for the Explorer and floor
and acoustic systems for the Ranger.  Our new 3Q/00 EPS estimate is
$0.55, down $0.04 from our previous estimate.  If Ford were to recoup Ranger
production, as expected, it would be a positive development for LEA's 4Q/00.
However, with significant exposure in the weakening Euro, gains from the
Ranger may be offset by currency effect."
    Tower Automotive, Inc. (TWR-NYSE) also receives a favorable review from
Hilgert:  "We think Tower's roll-up of the fragmented global market for
structural auto components and assemblies should continue to roll out the
earnings.  Because of its customers' increasing demand for modular components,
outsourced engineering expertise, global presence and an active acquisition
strategy, we think earnings should continue to improve, giving investors
upside potential to $23 over the next 12 months."
    Concerning Minneapolis-based Tower's near-term outlook, Hilgert says:
"Tower Automotive makes frames for the Ford Ranger and structural stampings
for the Ford Explorer.  We estimate that the additional week of shutdown will
cost TWR $3 million in revenue.  Because of the week extension, we are
reducing our 3Q/00 EPS estimate for TWR to $0.38, off $0.03 from our prior
estimate of $0.4l."