Bailout Watch 50: In Lehman's Terms

Ford Chairman Bill Ford is trying desperately to put some daylight between his industry’s bailout request and the ongoing mop-up of what’s left of the U.S. financial system. “People see this as a very separable issue,” Ford told Automotive News [sub] after an epic DC beg-a-thon. As gung-ho as Michigan reps are to see their home state rake in the federal scrilla, there’s indication that even there the “separability” of bailouts may be strained. Rep Candice Miller R-MI, who organized the meeting with Ford and others, said afterwords that some lawmakers still have questions about the loan request– aggravated by the upheaval among major financial institutions over the past days and weeks. These concerns center on analyst predictions that the fed’s decision to allow Lehman Brothers to fail was a line drawn in the sand. Though she calls the new $7.5b cost estimate for the first $25b “too high,” Miller can muster only “cautious optimism” about the future of the bailout push. And while Bill Ford and Mark Fields sing for their supper in DC, bean counters in Dearborn are trying to figure out Ford’s exposure to the bankrupt Lehman Brothers mess. Reuters reports that Lehman Commercial Paper had committed $890m to an $11.5b revolving credit facility under a secured credit agreement reached in December 2006, all of which is presently unfunded. Lehman Brothers Bank FSB also provides $238m of facilities totaling $16.3b that support the retail securitization program of Ford Motor Credit Company. These subsidiaries are not listed in their parent company’s bankruptcy filing. But since Ford mortgaged itself to the hilt in 2006, the unraveling credit-market could still hit Ford where it hurts.