Can Ford Pull Ahead?
#1
Can Ford Pull Ahead?
http://www.newsweek.com/id/172243
I have test driven the Ford Escape Hybrid and it is a nice ride. If it weren't for the fact that I needed a commuting car, it would have been high on the list.
Bob Wilson
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. . . .
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. . . .
Bob Wilson
Last edited by bwilson4web; 12-08-2008 at 05:29 PM.
#2
Re: Can Ford Pull Ahead?
Ford actually came out of the 2nd round of bailout talks looking halfway decent. They looked like they have a good long term plan that just got derailed by the economy & needing an additional option with the frozen credit market. Predicting profitability. Not asking for a loan but a "line-of-credit".... etc, etc.
Having real, viable hybrid vehicles on the market instead of the junk GM throws together.
Building several decent quality economy vehicles with good mileage.
Building vehicles that are highly competitive in Europe & Central America (I saw a ton of Fords in Germany 3 months ago).
While I'm much happier with my Nissan Altima Hybrid, the Ford hybrids are good.
Having real, viable hybrid vehicles on the market instead of the junk GM throws together.
Building several decent quality economy vehicles with good mileage.
Building vehicles that are highly competitive in Europe & Central America (I saw a ton of Fords in Germany 3 months ago).
While I'm much happier with my Nissan Altima Hybrid, the Ford hybrids are good.
Thread
Topic Starter
Forum
Replies
Last Post