Ford: Bailout-Free But Still Begging
Ford gets props from anti-bailout folks for being the only Detroit automaker to not seek TARP bailout loans. But as several stories today indicate, Detroit’s putative last man standing is still seeking government sugar, if only in less direct ways than its hapless competitors. Automotive News [sub] reports that Ford is requesting the German government to extend its cash-for-clunker rebate, threatening temporary plant shutdowns if the handout sunsets at the pre-arranged 600K unit mark. “The bonus is smart, simple, and it works,” says Ford sales poobah Ingvar Sviggum. “Here is my appeal to the German government: The bonus is good for the auto industry, the country and for the consumer. So please stay with it. If the scrapping premium is not extended, there will be a dramatic decline in demand in the second half of the year as a result.” Just over 200K of the rebates have been claimed, leaving about 400K still to be claimed in the measure’s original run. But, y’ know, extend it anyway. Or else.
And thanks to the sales turnaround in Germany, Ford is also pressuring Canada to introduce its own government-subsidized sales incentive reports Automotive News [sub]. Ford wants the Canadian government to provide $3,500 in incentives towards the purchase of a new car in hopes of “heading off” a weak sales year. David Mondragon, CEO of Ford Canada argues that the $9.2 billion credit facility provided by the government to automotive financing companies was “likely much less than needed.” Predicting a 13 percent drop in sales, Mondragon says the credit (which, like Germany’s, requires turning in an older vehicle) “is urgently needed to spur automotive sales, which will help drive economic activity and factory production for all manufacturers in Canada.”
Meanwhile, Ford’s spun-off supplier Visteon (which is looking for big-time govenment handouts to stay afloat) just paid 2,100 salaried employees an undisclosed bonus, says Automotive News [sub]. This despite a $633M loss last year, delisting from the NYSE, massive job cuts and imminent bankruptcy (or not). The bonus was for meeting quality goals, say spokesfolks, and were about 2 percent of annual salary.
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Welcome to the 21st century. A century where the best quality domestic cars come from Ford (according to Consumer Reports). A century where the best or equal best fuel economy comes from Ford (according to the EPA). A century where Ford vehicles have the higest number of 5* safety ratings of ANY manufacturer (according to NHTSA). Time to move on from old stereotypes and come and see what is REALLY happening at Ford rather than serving up washed up arguments that are no longer relevant. The F stands for Ford and will do for the next 100 years and beyond. Doubt that the same will be said for GM or whatever moniker the boys from Auburn Hills use these days.
OK, let's begin at the top (sigh). Ford spun off the supplier, I would imagine, because they didn't feel they would be profitable. (Turns out that was smart.) You can bet that had they not done it, they would be criticized for having an unprofitable in house supplier. So damned if you do and damned if you don't I guess? So, why is it even relevant to this article? (Maybe about as relevant at the Pinto matchbook thing.) The bonus thing looks bad for sure, but maybe someone should mention that this won't even make up for the 4 day weeks everyone had to work earlier this year? Any industry that is large enough to lobby does so for their own interest. Is the quarrel that anyone lobbies? or that Ford is acting rational by lobbying for something for their industry? I don't get it? Re: Pintos and everything else - where exactly does the statue of limitations on quality issues run out? I'm just asking, since a lot of Japanese products were absolute piles of crap for a long time. Nobody would argue they are good now, but maybe let's bash a rusted out pile of crap Datsun? What the hell? I think they shared the road with the Pinto.