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While it’s admirable that Ford haven’t taken any bailout money, it’s slightly inaccurate.
Ford are (understandably) marketing themselves as “Bailout? Bailout? We don’t need no stinkin’ bailout!”, but that fact is they have taken a bailout check, they just haven’t cashed it in yet.
Unless it was a doppleganger, I’m pretty sure I saw Mr Mulally at Washington DC with Mr Nardelli and Mr Wagoner. And I strongly doubt Mr Mulally was there just to see the sights. He was there to secure a line of credit in case Ford needed it….and he got it.
So Ford have entertained the idea of a bailout and have secured capital (capital which is now unavailable for anything else).
If I were GM or Chrysler, I would make people more aware of this fact. Especially if it takes sales away from Ford and brings them back to GM and/or Chrysler.
Actually Ford already had a couple lines of credit. They didn’t need anymore.
Ford borrowed and Mortaged there whole Company and Blue oval before the latest mess in the Money market, so they have Money right now, but I am sure as “dickens” that in time with decrease sales they too will come to feeder bin!
Ford has been smarter than the other two. They got their money early while they still could. But they mortgaged everything. And if they can’t pay it back, the banks will not be as forgiving as Uncle Sam (they will want their money). Which means that they will cry “Uncle! (Sam)” if they can’t make those payments. And if the market stays the way some here predict, that is exactly what will happen.
Ford still has a couple of assets (Volvo, piece of Mazda) to sell. So they may yet get out of this without US help. But unless the market picks up I think even with a sale of Volvo it will just push back government loans, not prevent them. One wildcard – Visteon. They just narrowly avoided bankruptcy but I’m sure they are not out of the woods yet. Ford needs them like GM needs Delphi. If they need a cash injection they will be a drag on Ford’s resources.
GM also had assets to sell, but did not get the LOC that Ford did. Now they have nothing left to sell and a structure that prevents them from making money, even if sales pick up. Unless they shut down Saturn, Pontiac, Hummer, and probably Buick too they can’t make it. Oh and a better labor agreement would help.
Chrysler has no assets to sell (nothing really big, anyway) but they are much better structured than GM. If sales pick up they could stabilize, but they will need a partner(s), FIAT, Nissan, etc. to secure a future.
“Unless it was a doppleganger, I’m pretty sure I saw Mr Mulally at Washington DC with Mr Nardelli and Mr Wagoner. ”
Nice try, but Mulally subpoenaed. He had to show up by law.
It’s nice that they haven’t received a payola yet, but the fact is that they got up in front of congress, hand in hand with the other two, and threatened the country, essentially telling us to give them the money or the economy gets it. It’s enough for me to tell them to pike off.
“It’s nice that they haven’t received a payola yet, but the fact is that they got up in front of congress, hand in hand with the other two, and threatened the country, essentially telling us to give them the money or the economy gets it.”
Subpoenaed. He was subpoenaed.
Everyone except the sleaziest of politicians obeys subpoenas to appear in front of Congress.
BDB
You’re missing the salient point!
It doesn’t matter if Mr Mulally was subpoenaed or not.
Was he subpoenaed to negotiate a line of credit for Ford….? Or did he do that off his own back?
They get huge credit for just covering the idea of boycotting companies for taking bailout money.
The line of credit is an escape hatch in case the suicide bomber (GM) decides to end it all and bring down everyone with them.
Glad you cleared that up BDB, it’s an extremely important difference.
Unfortunately, except for having more cash, Ford isn’t in much better shape than the other two. The only reason they’re getting through this without Gov. help is because they sold Jag/LR and a portion of their Mazda stake, borrowed when the borrowing was good, and will probably off-load Volvo and/or their leftover Mazda stake in the near future. Ford’s doing this the right way, as opposed to going crying to the tax-payer. Why shouldn’t GM and Chrysler be forced to sell anything and everything they can to stay afloat before taking Gov. money? Maybe they just don’t have assets that are worth anything…
I hope they only sell the remaining Mazda stake as a last resort. Their partial stake in Mazda has been very good for them (as opposed to Volvo, Aston Martin, and Jaguar which led to nothing).
Ford is betting that its new products, along with an improvement in the total auto market, will enable it to “just say no” to federal dollars.
If auto sales don’t improve, or its new vehicles don’t quite catch on with Americans, Ford could still end up needing the money, regardless of what happens to GM.
geeber–
I suppose Ford’s fortunes really do lay with the economy, since IMHO they are in a very strong position when this recession ends.
They have two new very good cars coming out in what should be a recovery year (2010).
In the game of making cars, Ford already won. It outlasted GM.
If Ford does go to C11 later on, it’s because of the bailout of GM in first place. In a no-bailout market economy, GM would simply liquidate and Ford would simply have most of the conquest sales.
BDB:
I saw the new Taurus, Fusion and Mustang at the Washington, D.C., auto show. The Taurus, in particular, is a very handsome car…if we needed a large sedan, it would be at the top of our list. And we’re seriously considering a Fusion to replace our 2003 Accord when the time comes.
The only thing I can see holding Ford back is a depressed auto market.
That’s good to know geeber.
Honestly I can’t think of a weak link in their (car and car-based) lineup right now, aside from the Focus. And even then, just because it’s fugly.
BDB,
For what it’s worth, we have a 2005 Focus SE sedan with 83,000 miles, and have had no major problems. We’d happily buy another Ford based on this car.
Just don’t get us started on the 1999 Cavalier my wife had before we were married…
Oh, the previous gen Focus was solid. It’s the current generation where they screwed up in the styling department.
I also think it was a crime to kill off the Focus wagon, but I blame the consumer for abandoning compact station wagons.
Katie,
Alan Mulally did go with the intent of getting bailout bucks, requesting a line of credit as a way to stay afloat if the market continued to worsen or crashed by GM and/or Chrysler went down. But in the second hearing when it was revealed that the actual bailout was being held at the end of this March, and the companies are just going to get what they need to be stable until that time, Mulally just closed his briefcase and left with nothing, opting out of the bailout game. GM and Chrysler then grabbed up the bailout bucks to stay alive to see 2009, and the rest is history.
I know you hate Ford Katie, but you can’t fault any of the moves they have been making since Mulally took over. They are the only one of the big three that are actually trying to turn around.
Instead of being like GM, who kept everything the same, made a bunch of different excuses as to why they had Toyota’s foot in their ass (Remember “Import bigotry”?), and then went crying to the government when their dumbass moves finally caught up with them.
My wife and I saw a Ford Flex in the parking lot of the hotel we were staying at a couple of weekends ago, and she asked me what car it was. She was very impressed wiht its appearance inside and out. Though it’s not really our type of vehicle, it impressed me and my wife in the styling Department.
Another poster alluded to an interesting possibility. What if these bailout dollars to GM and Chrysler force Ford to file for bankruptcy while only postponing the inevitable for GM and Chrysler. Anybody care to explain how that would benefit the country? These bailouts primarily benefit the top dogs at the subject corporations. If they failed, others – hopefully others who are better at running a manufacturing company – would step in and fill the void through increased sales by the remaining car companies and through one or two new companies buying the manufacturing plants and possibly the name and logo (Cadillac, Chevy, and Jeep still have some value).
“Subpoenaed. He was subpoenaed.”
Did you listen to what he was saying? He fully supported the bailout.