Second, Mulally’s turnaround is working – or at least that’s the underlying premise: one hedge fund manager who’s fund is invested in Ford sees the company making a profit in 2009 of $1.44 per share, which is twice the profit typically expected by industry analysts.

Third, at its current price, Ford stock is trading at about 2.2 times expected 2009 cash flow (i.e., operating income after expenses before depreciation and capital gains or loss. In other words, selling Volvo wouldn’t count).

It is an interesting thought. Ford’s clearly making some progress with its product line. Over the week-end, Ford got headlines for tying both Toyota and Honda in the initial vehicle quality survey conducted by the RDA group (not J.D. Powers and Associates). Of course, that’s not unrequited good news: Toyota, in particular, has experienced quality problems in the last two years that have depressed its quality reputation. Still, it happens to tie in perfectly with the new Ford ad campaign, which has four legs: drive quality, drive green, drive safe, drive smart.

The “contrarian” theory of stock market investing holds that money is not made by investing in stocks already being promoted as investment opportunities. Rather, the contrarian seeks to look for stocks that have potential. One of the standard measures is the price to earnings ratio. If one assumes the premises of the Barron’s article, Ford is, indeed, very cheap at the moment.

But, there’s another way to look at it:

What, exactly, would you put at risk investing in Ford common stock?

The company could go bankrupt, in which case your investment would be wiped out.

But, if the federal government is going to step in to save a bunch of investment bankers from themselves, what would it do when faced with Ford’s demise? Sure, Ford ditched its retiree health care liabilities onto the UAW earlier this year. But that still leaves it with a huge liability for the benefits owed to current workers, pension benefits included. Moreover, though the UAW is a political tiger that’s lost a number of teeth, it’s far from needing dentures. Putting all of those UAW employees out of work wouldn’t be a politically palatable concept, particularly not when one of the most powerful members of Congress – a man who can shrivel Nancy Pellosi with a single stare – represents the district in which Dearborn is located.

Of course, Ford could just go under the way that so many auto suppliers have done: Chapter Eleven.

But, that ain’t going to happen. There is no company other than Ford that is so completely insulated from Chapter Eleven.

The reason?

The family.

For that, see Part Two