We've been sounding the alarm on Detroit's liquidity "challenges" even before the automaker's began their most recent "turnaround" efforts. Before I relate Automotive News' [sub] tardy take on the situation, keep in mind that Ford has abandoned its promised "return to profitability" target (and not set a new one), GM never had a publicly pronounced plan to get back in the black (how great is that?). And Chrysler's gone into radio silence since its private equity owners bought themselves a multi-billion dollar passel of trouble. And don't forget Fitch's Ratings has better access to corporate info than Automotive News; they've downgraded all three automakers and put them on negative credit watch. Alright then… GM "will burn through about $1 billion a month this year and $6.3 billion next year, says Patrick Archambault, an analyst for the investment bank Goldman Sachs Group Inc. That would leave an anemic $8.7 billion in cash by the end of 2009 unless GM dumps assets or adds new debt, he said." Ford "is in better shape — about $29 billion in cash and $11 billion available through credit lines. Moody's Investor Service says Ford could exceed a two-year total cash burn of $14 billion by the end of 2009." Chrysler "started 2008 with slightly less than $10 billion in cash. On June 18, Bloomberg News reported that Chrysler will burn through $2.5 billion this year and would end the year with $7.7 billion in cash." We're thinking they're all low-balling. You?
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Well, I’ve been reading that Ford is the most likely to survive. If that is truly the case, their stock price currently sits at about $5 per share. At what price should I consider Ford a buying opportunity?
Jon Paul :
Now would be a good idea. Buy a hundred shares, and see what happens…
I think it’s really hard for people to get their heads around a chrysler C11 today. We are accustomed to these companies being around no matter what. That matter what is coming due.
Goldman Sachs dropped GM like a hot rock last week, it’s sell rating is a huge blow. Kirk K threw in with Ford, I think he knew the sell recommendation was coming and that makes Ford the most attractive of the three. Chrysler is not even a player in this game.
There will be at least one major auto manufacturer in the US of domestic roots and that will be Ford. I don’t think they deserve to emerge victorious in this considering they sold crap cars and trucks like the other two but they made moves towards cars, hybrids, and quality that the others 2 stalled on. Mercury will probably go bye bye and be replaced by Lincoln as a upmarket move. Jill Wagner will look good driving a MKZ.
The final step for Ford is to expand it’s small car line by bringing overseas cars here. A clean diesel would be welcome as well as the Euro Focus. The only fly in the soup would be domestic production and suppliers. If they can navigate around these two problems they win.
The Unions are going to go after Ford hard, expecting them to take displaced workers and up the ante in negotiations. The suppliers may not like having one company to deal with instead of three. Overseas production may be their only choice.
Jill Wagner would look good driving a rusted out Yugo…Jill Wagner would look good driving a Razor scooter.
Jill Wagner just looks…good.
But will she look good driving an Aztek?
Yes, she will.
The problem is, it’s still an Aztek. I wouldn’t have paid MSRP on an Aztek unless Jill Wagner was included–and perhaps not even then.
This is a problem some executives have, especially those that came up through marketing, and certainly those who came up quickly. The problem is this: they have a firm belief that the product doesn’t matter, only their own marketing brilliance.
Yes but who switches off the jill Wagner ads to another channel? Not me.
You gotta put Mercury on your list.
GS650G :
Yes but who switches off the Jill Wagner ads to another channel? Not me.
You gotta put Mercury on your list.
Okay, that was funny.
But the whole situation is dire indeed…
they have a firm belief that the product doesn’t matter, only their own marketing brilliance.
Ya thats most American firms’ motto, also rubbed off to the safety iuuses of Chinese automobiles.
Here we go… Every time Mercury is mentioned, somebody always brings up Jill Wagner. What is the obsession already? I mean she’s cute and all, but she doesn’t look THAT good. Not enough to jizz myself or anything.
Anyway, back to cars.
Who the hell is Jil Wagner?