Not much attention has been paid to the fact that the American Family Association’s boycott of Ford for taking a pro-gay rights position has contributed to the automaker’s mounting financial woes, contends Tom Blumer of BizzyBlog. With the company on the brink, some shareholders are asking whether political correctness is worth the price.
For those who doubt the AFA boycott’s relevance, consider this — Assuming there are 17 million boycott participants, and that only 1/2 of 1% of them (85,000) had bought a Ford vehicle during the fourth quarter, the margin earned on those additional sales (assuming a product mix and incremental profit margins before fixed costs consistent with those identified at this July 2007 Forbes article on the auto industry) would have turned that $620 million fourth-quarter loss from continuing operations into a $63 million gain. That’s an awfully high price to pay for...
