RE: best use of resources I would change option 3 to "diversify" business. I sincerely believe that mgt is working hard at diversification, and I think some people here don't realize the magnitude in the shift of the auto industry. IF they manage to get an extension of Ford it will probably be less lucrative, and it may well be the last one for AM.
They have one contract good for another 12 months...share price is heavily tied to current cash reserves with some spec premium for possible new business. I would continue the dividend at current levels until new business is found. It makes more sense to spend your own cash on -- for instance -- a new wind power plant than borrowing for the plant. Once they have some more solid contracts, I would ratchet up options 1 or 2.
In other words, I am very cautious with cash for now, but if things fell into place:
- Ford extension -- though less lucrative
- new wind or other temporary contract
- at least partial (say half) settlement of GM litigation
I could see huge special dividends ... like $1 per share wouldn't be out of the question.