Bailout Watch 339: Ford's Good at 12m P.A. Or Is That 10m?
Ford’s El Presidente de las Americas has been out and about, doing the rounds, talking up the company’s prospects to the media. And Mark Fields has a good story to tell: Ford’s not Chrysler or GM. Thankfully, Bloomberg cuts through the chatter to ask the key question: at what point would FoMoCo tap into Uncle Sugar’s Blue Oval-shaped $9b bailout– I mean, line of credit? Fields said he’ll only proffer the begging bowl if “the economy continues to deteriorate well beyond our assumptions.” Define “well beyond.” Nope. Well, at least we get a look at Ford’s assumptions. “Ford Motor Co. is forecasting that this year’s U.S. sales of cars and light trucks may fall as much as 9 percent from 2008, when they reached a 16-year low. Industry sales will be 12 million to 12.5 million, with the first half weaker than the final six months.” “After the last couple years, we hope we’re at a bottom because it’s a pretty low level of activity for the industry,” Fields said. Again with the hope. Oh, and did I mention that Ford CEO Alan Mulally didn’t get the memo on the 12m bailout floor?
What’s more– $4b more– it seems that bailout bill just got bigger. “If sales were to fall that far, Ford told Congress in December that it would likely need federal loans of as much as $13 billion to sustain all its operations.” Oh, all its operations. Gotcha.
Uh-oh. J.D. Powers’ mob j ust released their prediction for sales for ’09: a 13 percent fall, to about 11.4 million vehicles.
Far be it for a OCD pistonhead to contradict a building full of highly paid, well-respected, they didn’t see this coming did they sales analysts, but I reckon U.S. new car sales will sink even lower, and won’t show any improvement until the spring of that most magical of years, 2010. That’s if Chrysler and GM are “allowed” to disappear/downsize through bankruptcy.
More by Robert Farago
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I don't know, with GM offering 0% loans to everybody, again, Ford's sales stand to be hurt even more so or they will be forced to take on the cost of those bad loans. They should've taken the money, at this point its looking like a huge competetive advantage for GM in the short term. Whats more, the Taurus, MKS, Flex, and MKT are all set to bomb, again, still. The Fusion will do well but can't be earning much profit as a NA only product, same with the Focus. The Edge and Escape will continue to pilfer each others sales, and F-150, Explorer, Expedition/Navigator will continue their epic decline. Add in the drain unsellable Volvo, absolute waste of space Mercury, and totally lost Lincoln are adding to the books, and I just don't see a rosy picture for Ford without a serious capital injection.
The question I have that I think is critical to this discussion is: does anyone think that Ford could actually be perceived any different than GM and Chrysler. They have been lumped in (in the middle, usually) with the"Big 3" for so long will the average consumer ever be able to separate them out, that they are different from the other two, regardless if their products are better or not? Or, will it continue to be that their (Big 3) fates are forever locked together?