Originally Posted by Keith_Naughton

. . . A recent study by CNW Marketing Research showed that 32 percent of would-be GM buyers were scared off by the fear of bankruptcy. They defected to Ford more than any other automaker, the study found. "Ford is getting a boost in sales because people think they're in much better health," says IHS Global Insight analyst John Wolkonowicz.

The fact is, though, Ford is sick, too. It's lost $8.7 billion so far this year and struggles with the same high labor costs and SUV dependence as GM and Chrysler. But the company is in better shape because of what Mulally calls "the biggest home-equity loan in history." As soon as he arrived in Detroit from Boeing two years ago, Mulally mortgaged every asset Ford had—even old Henry's family name—to secure $23 billion in loans. Today, even after burning through billions, Ford still has a formidable stash of cash and credit worth almost $30 billion. That's nearly twice the size of GM's cash cushion and 12 times more than Chrysler has. Mulally's bet-the-house loan looked risky back in 2006, but now with credit frozen "it turned out to be a brilliant deal," says Lombard.

The bond market, which long ago wrote off Detroit, is starting to notice a difference between Ford and GM. Ford's long-term bonds are selling for 25 cents on the dollar. That's horrible, unless you consider that GM's long-term bonds are going for 18 cents on the dollar. . . .