Ford Repurchasing $5 Billion in Debt, Tapping Into ESG & Green Bonds

Ford Motor Co. has announced a cash tender offer to repurchase up to $5 billion of the company’s high-yield debt in the hopes of rebalancing its budget after needing to borrow so much during the back-to-back-to-back production shutdowns incurred since the start of 2020. The automaker is retiring as much of the $8 billion in bonds the company issued at the start the coronavirus pandemic as it can and will be doing the same for some older bonds issued at similarly high rates (over 8 percent annually).

However this will be used to make room for environmental, social and corporate governance (ESG) initiatives and establish a “sustainable financing framework” the automaker said would be a first for North America. Ford clearly believes social governance investments will become increasingly routine and is attempting to showcase itself as one of the kinder, more forward thinking, and environmentally responsible multinational industrial concerns. Sort of like a fully armed M1 Abrams tank painted with peace symbols and hippie daises.

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Average Automotive Pricing Window Continues Shifting Upwards

Now that fuel prices are popping off and it’s becoming glaringly obvious that we’re falling into another recession, one would hope that automakers would be prioritizing their more economical models. Unfortunately, most manufacturers operating in North America spent the last decade culling the smallest models from their lineup. Domestic brands took the practice so far that several no longer offer traditional cars, opting instead for compact crossover vehicles yielding higher price tags and broader profit margins. Foreign brands were only marginally more reserved with the ax.

This has helped move the average vehicle transaction price beyond $42,000 in the United States, according to Edmunds, with used rates sitting somewhere around $28,000. Though the cause isn’t entirely down to there being a complete lack of econoboxes on the market. Increased regulations and the industry’s newfound obsession with connectivity/tech have also increased pricing. But it doesn’t change the fact that we’re now confronting a situation where almost nobody is selling the kind of small, affordable vehicles that cater to shoppers needing to be thrifty right when they really need them.

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Study: Automotive Debt Is Out of Control, You're Being Swindled

Consumer Reports just released the findings of a year-long stud y looking into the latest trends in automotive loans and car payments. The resulting information highlights just how explosive the debt growth has been over the last 10 years and the arbitrary way in which borrowers are now being treated.

Long story short, we’re all being swindled.

With vehicle prices ballooning and the associated loans becoming longer than ever, dealers and lenders seem to be operating whatever way yields the steepest profit margins with only a modicum of consideration being given to the established frameworks designed to act as a guard rail. This has led to U.S. citizens carrying around a record $1.37 trillion in automotive load debt and customers with good credit being treated no different than those that fall into the subprime category. Sadly, the issue appears only appears to be worsening as new economic perils are only making things more expensive. Meanwhile, data from the Federal Reserve Bank of New York is projecting national auto debt to swell to $1.42 trillion by year’s end.

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  • Art Vandelay Report: TTAC Dead in 2022
  • Art Vandelay I bet more Ferraris get driven than people comment on this site post-update lol
  • Jim Holmgren Absolutely love my TR8. It's a thoroughly modern car by Triumph standards. Comfortable to drive and ride in. AC and power steering - plus power brakes. The Rover V8 is the perfect engine for the car. It pulls strong without being ridiculous and it makes "a proper noise". In convertible form, I see nothing controversial about the styling for the 1980s.
  • CaddyDaddy Most TR8s have a pair of side-draft Stromberg carbs. HUH? I do believe those are SU or British made Skinners Union Carbs. May want to fix the article before some British Car loyalist has a heart attack in his garage while reading the article in the Midlands.
  • Arthur Dailey The only TR-8 that I knew was a 'project' car that sat in the same driveway for many, many years. Did however have a friend with a TR-7. Can confirm that the instrument panel, interior materials such as fabric/upholstery, ergonomics and in particular the seats were superior to my Corvette of the same vintage. However in the first week that my friend had his TR-7 while pulling out of a shopping centre, his driver's side door 'fell off' the car. Quality control was to put it mildly, primarily just a 'rumour' at B.L. during that period.