Bailout Watch 367: Ford: A Bailout By Any Other Name…

by Robert Farago

January 30th, 2009 10:12 AM

bailout watch 367 ford a bailout by any other name

Thanks to strangely prescient asset mortgaging, Ford has not yet joined Bailout Nation. Providing, of course, you discount its forthcoming share of the Department of Energy’s $25b no- to low-cost “retooling” loans (remember them?). But don’t get to thinking that FoMoCo doesn’t have its eye on the prize (federal succor). The Detroit News reports this morning that Ford’s lobbyists are hard at work in the teat suckling department. “Ford Motor Co. is calling on Washington to do more to stimulate the economy and get consumers back into its showrooms, after posting a record loss of nearly $14.6 billion for 2008 on Thursday.” Ready? “Anything that can incentivize the consumer, especially with regard to automobiles, would be great, because it’s such an important part of the economy,” CEO Alan Mulally told The Detroit News. “I know that they know how important the automotive sector is.” Cue “I’d do anything” from Oliver, substituting the word “money” for “love.” Anything? But what, exactly?

Unspecified. (There’s a lot of that going around these days.) The DetN’s Hoffman intimates that we’re talking about Ford’s backing of bailout bucks for Chrysler and GM. Methinks there’s more in play—clunker credits, battery grants, Ford Credit help, etc. And, eventually, their turn on the bridge loan to nowhere, uh, bridge.

“Auto analyst Rebecca Lindland of IHS Global Insight said Ford is playing a risky game by asking the federal government to help bail out the rest of the industry while trumpeting the relative strength of its cash position.

“It certainly helps Ford indirectly if the consumer can get some help and suppliers can get some help and, to some extent, it helps Ford if the industry as a whole starts doing better,” she said. “It’s an interesting strategy, because we’re not 100 percent convinced that they won’t need money at some point in time.”

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John Williams on Jan 30, 2009
AMEN! Mexico gets the 225HP 6 speed Focus ST for the equivalent of around $21K, and the 150hp Fiesta ST for around $12K! They would blow away the Fit with something like that at that price point! What is wrong with Ford that those products are not here!!!! Arrrrggghhh Should have asked that about the Ford Contour (nee Mondeo), and for that matter, the Astra, G8, GTO and countless others.

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ComfortablyNumb on Jan 30, 2009
Ronnie Schreiber: Yes he has. Prior to Mulally, Ford generally had an "every man for himself" attitude. Many of the good eggs from that time expressed utter frustration at what went on around them. The end result was a collection of corporate fiefdoms that fought amongst themselves constantly, at the expense of the customer. Mr. Mulally has forced the managers to abandon long-standing habits (don't EVER tell him you can't make money on small cars) and focus on the product. He concentrates on short-term issues (e.g. profits), but also on setting up a sustainable long-term business. Obviously I can't speak for every employee, but Ford is a much more product- and customer-centric company than we've been for a long time.

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