nonautomotive finance subsidiaries to reap a higher valuation for its holdings in them. Ford's shares have been trading at a modest 6.5 times historic earnings even as GreenTree Financial, for example - a $4 billion specialty finance company - commands a 13.5 price-earnings ratio. Thus a spinoff by Ford of part of its own parallel units would presumably give an immediate boost to the subsidiaries' value - and Ford itself could gain in trading by virtue of the increase in their public price. The finance subsidiaries involved in Ford's possible strategic move are the giant Irving, Tex.-based Associates Corp. of North America and San Francisco-based USL Capital. Ford, in sum, believes the market is not rewarding it for the performance of these subsidiaries. "This is a business we've shown we can do well in, and one that we plan to stay in," said Ken Whipple, president of Ford Financial Services Group in Dearborn, Mich. "It appears investors are willing to pay more for financial services companies right now than for car companies." Mike Diana, an analyst following specialty finance companies for Bear, Stearns & Co., said that based on GreenTree's 13.5 price/earnings ratio, Ford's Associates subsidiary - with third-quarter earnings of $188.2 million - could result in a total valuation topping $11 billion for all of Associates. And with more than $35 billion in receivables outstanding, the company would be the second-largest independent lender in the nation, ranking only behind General Electric Capital Corp. "It would be a monster deal," Mr. Diana said. But Ford Financial's Mr. Whipple said a 100% spinoff is out of the question right now. He refused to speculate on what could happen in the future, but affirmed that the company is exploring selling a portion of the companies. "It would be a partial sale," he said. "We are not looking at a spinoff." Such a strategy could fail, warned Michael Bowyer, an auto analyst with McDonald & Co. in Cleveland. Other companies such as RJR Nabisco have tried and failed to sell minority interests in highly-profitable subsidiaries to raise the overall value of the parent corporation. Nonetheless, he agreed that the market is not rewarding Ford for the performance of its finance subsidiaries. "Nobody owns Ford Motor Co. because of the growth potential of Associates," he said.

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