By on March 10, 2009

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.

Get the latest TTAC e-Newsletter!

25 Comments on “Ford: Bailout-Free But Still Begging...”


  • avatar
    RickCanadian

    Not a big fan of Ford myself, but on the flip side, at least they’re asking for money targeted to the industry as a whole and not to an individual player.

  • avatar

    Fewer than 200k of the rebates have been claimed

    Actually, as of today, 217693 rebates have been claimed. There is a great website, that gives numbers in real time: http://www.autohaus.de/cms/805659

  • avatar
    Richard Chen

    Update: $16 million bond interest payment was made today, so bankruptcy has been put off a few more days

  • avatar
    Geo. Levecque

    Here in Canada the CEO of Ford Canada has said the same thing in a media release to some people in our Senate hearings, he suggest that the Canadian Government give everyone with a vehicle eleven years and older be given a rebate of Can$.3500.00 to people trading in a vehicle, persumably on a Ford Product?

  • avatar
    TVC15

    Ford wants gov’t programs beneficial to their bottom line to be extended and/or expanded?

    Shocking!

  • avatar
    superbadd75

    I have got to give props to FoMoCo for not kissing the feet of Washington Pols to get a handout, but the threats of “do this or this will happen” are getting old. To me, asking the government for money directly and asking for incentives from the government to boost sales are pretty much the same damn thing. And WTF is up with these companies (now Visteon!) bleeding money but still finding bonuses for execs? I don’t quite get why the politicos, from the very beginning, didn’t make specific mention that absolutely no bonuses should be given to anyone at any company that takes taxpayers’ money. The more this shit wears on, the more pissed off I get. I feel like we need to support our industry here in the U.S., but if they’re taking handouts and can’t be considerate of how thin the ice is beneath their feet, they should be removed and replaced. Giving bonuses to anyone at a company that’s making negative money is about the most ridiculous thing I’ve ever heard of. Put those sons-of-bitches on commission and maybe they’ll figure out how to make a profit a little quicker.

  • avatar
    Edward Niedermeyer

    Bertel and Richard: Thanks!

  • avatar

    Re the photo –

    Is that from the commemorative spontaneous combustion match set?

  • avatar
    RedStapler

    The match box would be awesome if it replaced the F-150 with a Pinto.

  • avatar
    jfsvo

    Well I guess they’re all beggars then since every major automaker lobbies for government programs that benefit themselves, and the industry as a whole. Where is the story here?

  • avatar
    Gunit

    The match box would be awesome if it replaced the F-150 with a Pinto.

    Yes, and all the matches ignited whenever you bumped the box.

    I would also like these articles to change ‘government money’ to ‘your money’. And why should we pay so that a few people can buy new cars for less? It’s a waste of resources and the loans still have to be paid off at some point anyway, in this case by our children. Let production meet demand and debt fall on all levels.

    The real problem isn’t the current ‘crisis’, it was the last 10 years when cheap credit and huge debt that let everyone live in fantasy land. This is an adjustment that needs to happen and the sooner the better.

  • avatar
    jkross22

    “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].”

    How do you say “Go pound sand” in pig latin?

    Methinks the folks that got this undisclosed bonus
    might not have been the ones impacting quality. Call me skeptical, but credibility isn’t a characteristic I associate with any of the Big 2.221 or their suppliers.

    How much were the bonuses? Who got them? And for what specific job deliverable did they earn them? Quality improvement, meaning we now make sub standard parts rather than absolute crap?

  • avatar
    wmba

    I watched that Ford person push the cash for clunkers idea to senators on CPAC (Canadian Public Affairs Channel). His name is memorable — Mondragon. There were also other folks looking for handouts, and pleading special cases.

    Most worrying of all was the head of the Canadian Tool and Die Makers Association. Apparently, Ford, GM and Chrysler have NOT paid for work already performed for them by a number of tool and die companies, and the D3 are now going to China for similar work, where they are forced to pay pro-rata, not after the work is done.

    So the D3 are currently stiffing many Canadian companies for work already performed, and the Association was arguing that if bailout money is to be handed out to the D3, then their companies should be paid first. Otherwise, they’re kaput.

    I agree with the Association. Years of reading here on TTAC what the D3 get up to, their lack of any shame, and handing out bonuses when their companies are in the red, just make me sick.

    Time to die. I haven’t met a Canadian in these parts who agrees with bailout for the D3. Now it’s just politics propping things up.

  • avatar
    RetardedSparks

    I am against bonuses on the taxpayer’s dime, for sure. But a week’s pay is a lot more palatable than the 10-20 times annual salary that the bankers got.

    But here’s a question: if they got paid for meeting a specific goal then wouldn’t that be a valid expenditure? What about someone who sells something on commission? If the company loses money but they still sell their widgets, do they not get paid? I hadn’t thought about it this way before now….
    CEO’s and very high level execs get bonuses for overall corporate performance, thus insolvent company = no bonus (and a major claw-back, if I ruled the world). But if some guy works at Citi and gets a bonus, even a big one, for selling 401k programs or mutual funds or something, for example, shouldn’t he get his bonus for performance even if the company tanks?
    Don’t get me wrong, I really believe the vast majority of Wall Streeters are arrogant incompetent jerks who deserve to be unemployed more than anyone (and I know enough of them to make an informed judgment), but I’m just wondering if the torch-and-pitchfork crowd isn’t going overboard….

  • avatar
    BuckD

    A matchbox may not be the best marketing tool for a company whose products in the not too-distant past were known for their propensity to explode.

  • avatar
    tedward

    Threat? Really? If the German government pulled this program and Ford immediately shit-canned thousands of German workers, without ever opining that this might be a result, would you be thrilled with that? This puts the cards on the table, and lets the German government wrestle with the (apparently) competing interests of average taxpayers vs. auto laborers. It also beats the hell out of just paying politicians to do what you want (the US model, we’re so proud).

    I would be incredibly angry if Ford made a statement like this without it being true on the other hand.

  • avatar
    tankd0g

    tedward “Threat? Really? If the German government pulled this program and Ford immediately shit-canned thousands of German workers, without ever opining that this might be a result, would you be thrilled with that?”

    BMW would.

  • avatar
    superbadd75

    How do you say “Go pound sand” in pig latin?

    Uh, “o-gay ound-pay and-say”? I think that’s pretty accurate.

  • avatar
    P71_CrownVic

    If Ford put as much effort into making quality, attractive, desirable products, as they do disguising the fact that they need and have begged for money from the US government, they would be much better off.

    But they rather twist their own words and actions to make it appear that they are in a better position than the other two.

    As soon as GM goes C11, they will rocket ahead of both Ford and Chrysler to become a very strong company in a few years.

    Mark my words, the first one to go C11 will be the best off. And the longer Ford is in denial, the slower their death will be…but they will fail, it is only a matter of time.

    • 0 avatar
      jrh0341

      Actually, let see what Ford has done in 2010:
      J.D. Power: Ford takes highest intial quality rating among ALL non luxury brands in the industry. Focus, Mustang and Taurus win thier respective dsegments.

      Motor Trend: Ford fusion named Motor Trend Car of the Year.

      Motor Trend: 2010 Fusion Hybrid beats camry, altima and malibu hybrid in model comparison.

      Sounds like pretty good progress to me.

      “If Ford put as much effort into making quality, attractive, desirable products, as they do disguising the fact that they need and have begged for money from the US government, they would be much better off.

      But they rather twist their own words and actions to make it appear that they are in a better position than the other two.

      As soon as GM goes C11, they will rocket ahead of both Ford and Chrysler to become a very strong company in a few years.

      Mark my words, the first one to go C11 will be the best off. And the longer Ford is in denial, the slower their death will be…but they will fail, it is only a matter of time.”

  • avatar
    Robert.Walter

    BuckD : “A matchbox may not be the best marketing tool for a company whose products in the not too-distant past were known for their propensity to explode.”

    Come-on, let’s be fair … Pintos were not representative, nor were they known to explode, they were known to burst into flame when rammed from behind by very large objects moving with considerable speed (and is beside the point. The case I would make, is why, NHTSA doesn’t control this via FMVSS regs.)

    And, the whole Pinto, Vega and Volare, are from “not long ago”, and that they are somehow relevant and representative of today’s vehicles, is a tired line that begins to beg incredulity for any argument it is being used to justify…

    For Pete’s sake, by now, the majority of the guys who designed those cars, and esp the higher-ups that made any questionable decisions, have probably died of old age… for public discource to ignore this fact, is akin to tarring any of the current VW line with the sins of Hitler and the Holocaust

    (comment to prevent flaming: please note i am trying to illustrate a point, and wrote “akin”; i am neither trying to say that former D3 managers were on-par with war criminals, nor that the holocaust was due to poor cost-benefit analyses.)

    (supplementary comment: who thinks that one reason we have so few high mileage pass-car diesels cruising around in the US, when europeans and canadians make liberal use of them, is in part due to this kind of “perceptual lag” where people, despite all rational proof, still harbor irrational fear (or in other cases grudges) that all pass-car diesels will never be cleaner or more reliable than those failed units installed by GM in the 1980’s??)

  • avatar
    jamie1

    Give due credit to Ford, they are clearly in the best place. Best products, best people and best financials of the domestics.
    Frankly, it is time to stop talking about the Detroit 3 – it is the Detroit 2. GM and Chrysler continue to beg for mercy as Ford pulls away in to the distance.
    As soon as GM or Chrysler go C11, they are toast as anyone who knows anything about the business will tell you.

  • avatar
    P71_CrownVic

    But let us not forget about the Cruise control fires…brought to you by your garaged Ford.

    Or the Crown Victoria where the gas tank is located in the rear crumple zone…

    Seems the “F” in Ford stands for Fire.

  • avatar
    jamie1

    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.

  • avatar
    EyeHeartA2

    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.

Read all comments

Recent Comments

  • stuki: Population will be controlled. Gaia will be fine. But control will be by external-to-humans factors. Any...
  • stuki: “Retro styling for the youths makes no sense to me.” Parents rebelled against grandparents by...
  • stuki: “They may not be able to use it very well,” At least they may be able to see it….. For old...
  • Goatshadow: The grille and the tailgate are both abominations, and the wheel arches are the usual Toyota truck...
  • rudiger: Well, there was the Fiero. I’m not sure if the Vega caught fire; it was more of an overheating issue...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber