Layoffs suck if you’re one of the 10%, but those who remain are also lean and focused . . . contrary to opinions expressed here, the deadwood has left the building and the people who remain are loyal, determined, and talented.

If you truly are pulling for a successful US auto industry and want to see the US companies survive as vital makers of quality vehicles — as you have stated repeatedly on the site — then it’s time you quit the excessive negativity with respect to Ford. I’ve been here for nearly 20 years and I’ll tell you . . . this change is real. We *will* make it through this shit economy, and we *will* come out the other side with top tier products across the spectrum.

*That* is the Truth.

Oh . . . and I believe ‘non-core’ assets refers to Volvo and the 33% stake in Mazda.

As a side note, I decided to pop by the local Ford Lincoln dealer the other day and was pleasantly surprised by the quality interior in the Ford Flex and the Lincoln MKX. Very well finished, very comfortable… VERY surprising!

One reason why I predicted Ford surviving is that part of their survival is feeding off the failure of their cross town rivals.

Ford could tell creditors, “Either you let us sell this asset, which will give us the cash to survive until the economy improves and our sales pick up, or you can force us to stick to the terms of the original agreement, and get in line with everyone else when we go belly up.”

I do believe that a some of the cash burn is related to bringing the new products to market. Note that Ford hasn’t yet cut back on product development, as GM has done.

Opinion.

Still, 7+B! Serious pain.

MgoBlue-thanks for the explaination.

Hopefully some of that cash went to speeding the Fiesta this way.

Bunter

Wait a minute! Isn’t everything down to the logo already pledged to creditors as security? Where I come from, selling that stuff is called defrauding a creditor.

I’d think so, tbh.

The kidneys of their staff? What else is left?

Drew — I’m gonna one-up you here.

On my drive in this morning, when I heard Ford ‘only lost $129M this quarter’…I started pumping my fists in celebration. Ford’s kickin butt! Woo-hoo! There is some hope!

And then the reporter went on to mention the $7B cash burn.

It’s all smoke and mirrors at this point. I do believe they are better positioned than the General or Chryslerberus, but everything is relative. They’re still hosed.

Then my next thought was “wow, how far these companies have fallen when a $129 million loss doesn’t seem too bad.”

I hate reading about “brand bloat” because the theologians who think GM has too many brands are annoying. That being said, it is much easier to cut Volvo or Mazda away than to cut Buick or Pontiac.

But in general, Ford makes so decent cars right now. I’m not a big fan of any of them, but they are very respectable. that is the difference in having some good management.

Cash Burn and Operating Loss relate to the Balance Sheet and Income Statement, respectively.

Only operational activity hits the income statement. Revenues (if any), cost of goods sold, Selling and G&A expenses, etc. So their gross margin (Revenue less cost of those goods)less their operating expenses got them to the $129M loss.

On the balance sheet, Ford began the quarter with $26.6B. But during the quarter, there were actions the company needed to take, and some of those actions required cash. Could have been VEBA payments or a whole slew of other things, but none of it operations related. All of ‘those things’ added up to $7.7B over those three months. Ouch.

In simple terms, think of their income statement as their checking account and the balance sheet as their savings account. There can be many withdrawals and deposits that hit their checking account every month or quarter. At the end of the quarter, if they made money, those retained earnings would be ‘transferred’ over to their balance sheet, or savings account. Being that they lost $129M in the quarter, they had to fund it out of their savings account, and in addition to that, spent another ~$7.6B on other obligations.

The obvious question now is what did they spend $7.6B on in three months? Bonus accruals? Or were those dollars just sent straight to the golden parachute department to be gift wrapped for Bildo and the boys.

Ford is in bad shape, no doubt. But seems they’re doing better than their friends to the east and north. I’m sure they’re thinking that just out-lasting the other two might be enough to help them scrape through.

I feel this company is in the best position of the three. They don’t have pure garbage models (chrysler) and they don’t have extreme brand bloat (GM). Core brands, and if they really need the cash, they still have the opportunity to sell Volvo and Mazda, both of which should fetch a pretty solid number.

Doubtless I’m being dense, but can someone explain how you burn $7.7 billion in cash yet lose ‘only’ $129 million?

Yeah, how you do it?