Can Ford really borrow money right now either? They can sell more stock I assume, but I am not sure anyone is going to loan them money because everything that could be used as secured debt is mortgaged.

 

What this typically means, speaking from experience, is; "hey, our quality and productivity is so good we're going to increase the output (or line speed or work load) without: increasing personnel or brining back laid off workers, or raises."

And yes, it will usually screw up efficiency, at least for a while.

 

Don't forget that Ford got a $5.9 loan from the federal government too; not that much less than GM got. Sure, it was under the guise of a "clean energy" loan from the DOE, but make no mistake, it was as much of a 'bailout' as GM's loan was.


I'm guessing they'd have a very hard time getting financing right now, since they made most of their bondholders take pennies on the dollar earlier this year. Would you want to lend money to an entity that did that just a few months ago?

 

Ford has a $5.9 Billion credit line from the DOE, to retool plants to build more fuel efficient vehicles. The DOE does this type of loaning all the time. As a matter of fact, Tesla took advantage of this program, as did Nissan. The ONLY reason that GM didn't, is that they did not qualify. See, you had to be a viable company to qualify.

You will see GM getting this same loan program, in the near future.

BTW, Ford has not accessed this loan yet. This is quite obvious, by looking at their Q3 financials.

Just because you want to say it is a bailout, does not make it true.

On your second point, Ford did not FORCE anyone to do anything. You are mistaking GM's BK, and Fords debt/equity swap. This was a voluntary program, that was massively successful. This is why they are doing it again.......... and will probably do it again. As proof of how successful it was........... note that the stock price dipped only temporarily, then went right back up. This tells you what the markets think of what Ford is doing.

BTW, the credit markets love Ford right now. If they needed a bridge loan, or something else, there would be no problem in getting it. Why?? Because they pay their bills. Amazing how that works.

BTW2, their current "mortgage" will be refinanced, as their mortgage holder is very pleased with their performance, and progress.

Don't let anger or bias get in the way of the realities of what is going on right now. Ford is far from out of the woods. However, financially, they have done pretty much everything right. This is what great management gets you.

I believe that you should see GM getting their DOE applications in again around the end of the year (at least that was the last I had heard of it).

 

is it true these union worker make upwards of 50 dollars an hour if it is i would do as many jobs as humanly possible to make that kind of jack

 

$5.9 billion to retool plants to built more fuel efficient vehicles? I would love to see the accounting on how Ford requires that much money for this retooling. Face it, it's a thinly disguised bailout loan.

Yes, bondholders frequently line up to request their borrowers give them pennies on the dollar for their bonds. "Please, can you wipe 90% of my investment out?" Bondholders love it.

Ford basically backed them into a corner ... the alternative to accepting this deal was the likely bankruptcy of Ford, a scenario in which they would have received even less. So while Ford may not have "forced" this deal on them, they made it so that the alternative was even worse and basically gave them little choice.

 

No.

A number that high would be total compensation, not hourly wage...but I don't know what the total compensation works out to per hour.

 

Inconceivable! Ford is perfect!

 

Hmmmm............... so, developing and retooling plants, to build electric or hybrid vehicles is cheap. Ok, whatever you say.

You still didn't show me where Ford has accessed this money. Hint: You can't.

What Ford has done, as far as debt/equity swaps, is called smart money. They are doing their due dilligence to improve their balance sheet, and make themselves profitable. If the opportunity came up............. say, by your competitors going BK, and your stock being way up.............. and you did not take advantage of that............. you would be stupid.

Has Ford done everything right?? Of course not. However, they have done plenty right.

BTW, will you be crying additional bailout of GM, when they get their DOE loans???

 

No one forced anyone to buy the bonds. There is this thing in investing called "risk" that everyone seems to forget about.

 

Actually, Ford has no need to borrow money.

If Ford wanted to raise immediate cash, all they would do is issue additional stocks or even sell off some of the stocks the Ford family hold themselves.

Then there's additional money Ford is already approved to borrow that they haven't yet.

General Motors has no (as in zilch...nada...none...zero) ability to raise additional cash. That's the key reason why GM's new board of directors are far more active (and that's being extremely polite) than even traditional BODs.

At least Chrysler has Fiat to potentially borrow from......

.... however, even Chrysler has STOPPED their cash burn, and is breaking even. Despite the sales numbers.



You really, really, REALLY don't wanna go there!


Ford got $5.9 billion from the Feds as a loan.

You wanna compare Ford and GM?

* General Motors was so much a screwed up financial basket case that even the Feds wouldn't give them this loan!

* General Motors wound up with the majority of the $17.4 billion that Bush gave GM & Chrysler last winter when GM finally admitted that they didn'y have enough money to last past January 1st earlier this year (Chrysler said it wouldn't last past the summer).

* The Feds THEN coughed up $6.7 billion dollar loan to GM and on top of that spent OVER $50 billion to take control of 61% of General Motors!


Ford made over a billion this quarter. That means that if Ford wanted to, they could potentially pay off that loan in less than a year and a half.

GM is looking to pay back the $6.7 billion even though they are still losing money. The Feds hope to recoupe as much of the rest of the money as possible by increasing GM's value then essentially selling off their GM "stocks" (ownership).

Again, given a choice in being in GM's or Ford's financial position, Ford is far better off.... by a long shot.

By the way, Ford never accessed that $5.9 billion..... it's saving it to access it later in the event they need more cash!

You may find this shocking, but The Ford Motor Company has way more than enough working cash right now.

Thanks for going into detail Gloria.

We all root for GM here because as a group we perfer the home team over the visitors. But having a head in the sand attitude, comparing apples to cabbage doesn't change reality.

Ford is reaping the benefits of a combination of luck, a phenominal CEO, identifying problems early while GM was still being run into the ground by a group of people too stupid to realize it (or fix it), and good old fashioned financial and product management.

Ford's quality is better than Toyotas (which puts GM far behind).

Ford made over a billion last quarter while GM still lost a quarter.

Ford is the only US car maker you can buy stock in.

Ford is the only US maker that can get a regular loan... something GM hasn't been able to do for years.

Ford has alot of long term debt, but as long as they are turning profits and their short term debt and liabilities are minimal to non-existant, it isn't any more an issue than someone with a solidly stable job buying a house they can afford on a 30 year morgage.

Reality is that GM isn't near those points yet.....

..... but there isn't a person on this site (even Ford fans) who don't want them to be.

As quickly as possible!

 

You might want to look it up and see the restrictions on this loan.

It clearly is NOT a "bailout".

Ford showed some ***** and gave them a either/or choice instead of needing the United States Department of the Treasury to do it for them.

Where's the problem?

Not perfect..... Just a whole lot better run.