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Highland Park, Michigan, based Ford Motor (NYSE:F) is a producer of cars and trucks. That’s really just the short version for one of America’s most iconic names and brands. Ford might just turn out to be one of the best turnaround stories in a decade, a symbol of resurgence in the Midwest. Consider this:  in 2008, Ford’s market capitalization was $5.5 billion: today it is hovering over $45 billion.

After taking a beating in the early 2000’s,  in 2006 Ford went outside the Ford family for the first time in it’s history to lure a non-family member to run the business. Alan Mulally, a former Boeing  (NYSE:BA) executive, came in to retool the company brand, and polish the company name.

Mulally has succeeded. He dropped the Volvo and Mercury lines, and focused his company’s attention on a one-brand name strategy: Ford. Mulally cut factory production to meet demand, worked with the unions to cut costs and improve productivity and the company worked hard to renew appeal in their cars.

In short, Mulally and his team got back into the automobile business with new cars, new styles and, by the way, not a dime of money from the U.S. Treasury.

The results are nothing short of spectacular: after losing $14.8 billion in 2008, the company came all the way back, capping the run with a $20 billion profit in 2011, and a reinstatement of a dividend, the first since 2006.

Revenues are on a steady track upwards, and while the company still has challenges, as U.S. sales are slowing, the Ford name is once again up on the top shelf, and, with a trailing P/E of 2.41 and a forward P/E of just 6.99, has a lot of room to grow the stock price.


Columbus, Indiana, based Cummins (NYSE:CMI) is a diesel engine manufacturer with it’s hands in so much more: the company designs, manufactures, distributes and services diesel and natural gas engines, electric power generation systems and engine-related component products.

What it all this means is they are power generation from head to toe. Cummins has been riding the tide of sales increases in machinery, farm equipment and trucks for the last three years and they’ve seen revenues and profits incrementally but steadily increase year over year in 2009-2011.

Cummins isn’t without some foresight, as they recently inked a partnership agreement with Westport (NASDAQ:WPRT), a Vancouver, Canada, leader in natural gas engines. The partnership should provide Cummings with a strong entree into that new, but growing,  marketplace.

Cummings has seen steady growth in revenues and earnings since 2009, and the stock price has increased nearly 500% over a similar period, recently creeping in on its 52 week high of $128. With a cash horde of $1.76 billion, the company has the money to invest in new facilities and opportunities, in addition to maintaining a steady dividend flow. Cummins is a steady performer

Marc Bastow holds no positions in WPRT, CMI, DE, CAT, or F

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