I read an interesting tidbit in C&D this morning, Ford pays an estimated 1154.00 in interest payments out of every vehicle sold compared to the 116.00 GM pays in interest per vehicle.

Granted, there was alot of positive press for Ford when they decided not to go that route, but when you get down to it, the 116.00 dollars GM pays in interest is a hard number to ignore.

 

The original plan had GM borrowing a bunch of money just like Ford did and using the UAW agreements of 2007 to help them become profitable. The crunch came because money was no longer available when GM needed it.

It's interesting that Ford continues to make money in spite of the extra $1000 or so per car.

 

The Ford family would have lost everything if they declared bankruptcy. No way that was/is going to happen before all hope is lost.

 

Believe it or not, if Ford had filed for bankruptcy, it almost definately would have NOT been approved.

First, Bankruptcy isn't something that a company can just simply state and therefore it happens. It has to file this with a court which looks at many things to decide that the company truly needs bankruptcy protection from it's creditors and it's financial and legal obligations (including both debts owed and labor contracts).

Second, Ford clearly had plenty of operating cash as well as cash to fund it's operations for the forseeable futureimply having debt is not a sure thing for bankruptcy. Keep in mind, creditors and those that have contracts with the company declaring bankruptcy are going to fight to prove that the company does have the ability to pay. Bankruptcy either erases all of that ability to collect or forces those debtors and contract holders to accept a fraction of what is owed.

Again, what seems to have been forgotten here is that the General Motors Corperation lost it's ability to pay it's creditors and meet it's financial obligations years before it filed for bankruptcy. Banks quit loaning GM money early in the decade. Even prior to bankruptcy, GM was unable to get certain loans and grants because it was judged not to be financially viable. GM still holds the record of having the biggest losses of any corperation in history over a single quarter.

GM could have easily had a bankruptcy petition granted in 2006 if not earlier. However, GM kept what little cash they had by selling bonds. Bonds that had a very sizable negative value by the time GM went into bankruptcy.


Chrysler's issue was entirely different. Their issue wasn't that they couldn't run themselves. Their issue was that to stay a full line automaker they needed to find a global partner to hook up with. They had enough money to do good trucks, Jeeps, and a car line. But they weren't doing enough cash flow to support updates on an entire line of vehicles. With Chrysler, it was far more important in finding a way to get mid and small cars on the cheap than getting big cash loans (hence why Chrysler was saved with a scant 8 billion that came almost entirely from the UAW...keep in mind some vehicle programs alone cost nearly that...while GM needed over 100 billion).


Ford had global reach, Ford had a hoard of cash, Ford also was doing extremely well as far as developing future products, and Ford walked the thin line in keeping labor at bay while keeping relations somewhat cordial (though GM and Chrysler going under later served as a wakeup call).

If Ford had filed for bankruptcy, not only would it had been rejected, it would have seriously soured it's relations with creditors, the UAW, as well as the general car buying public. It would have been a disaster for Ford.


If the economy tanks, GM is still highly venerable. Congress isn't going to give GM any more breaks. Chrysler at least has Fiat to draw on (so far, Fiat hasn't spent a dime on Chrysler... they are sharing hardware and running product coordination. Chrysler is essentially funding itself).

However, Ford still has not only a healthy sized cash war chest. Ford is actually making sizable money from the production of their cars and trucks. If that isn't enough, Ford still has a pretty big line of credit and loans that they haven't even used yet.

If they had tried the bankruptcy route, they wouldn't likely be in the enviable position they are today.

 

Of course not. But if they hadn't borrowed all the money a couple of years earlier, they might have had to.

In general, bankruptcy isn't something that an entity chooses to do. It's something the entity has to do. If Ford continues to pay down the debt, they'll end up where they need to be.

 

Ford is profitable for all the right reasons:
they sell cars, they innovate, they constantly improve products, they fire bad people, they manage by objectives, they benchmark the competition, control expenses, etc. ...GM in China is big and has the FEDs giving them 0% to .25% financing and that is an unfair advantage in the short term. GM is still mis-managed and must copy Ford's profile to sustain and survive. Long term they are repairing their balance sheet and I hope they survive by similar means. America is tired of bad management. Alan Mullaly at Ford is a terrific CEO and GM must find one...but why bother?....the US Government will buy stufff and prop 'em up for a long time.

 

Well spoken, maddog.

 

Why all this positive talk about Ford?

Did they not accept help too? Years before GM and Chrysler?

Their product is selling well at the moment not because it's good, but because it's new. They have all the same problems they've had for the last 10-15 years, but because they're put into vehicles that look different with new names that don't have the poor quality legacy. Give it a year or two when the warranties run out and they have to pay for the same repairs their Fords from 10 years ago needed.

 

Wrong. Their product is actually very very good. You might want to stop by a showroom and see it.

 

 

Total investment in GM, if you include GMAC was about 60billion. Maybe 65. It was not 100 billion. Not the first time you have posted this. But you didn't respond to the other posts saying that you were wrong.

 

No need to stop by a showroom. I've got more than enough in the shop. How about YOU do a few repairs on the "newer, better product" and tell me they're doing something right then. Same old, same old... now with a little Volvo flair. And you think you judge the quality of their cars by what you see in the showroom?

 

No, I judge it by the cars I have in the garage and driveway. And again, its very very good.

 

Heh, I know a mechanic on another site that feels the same about GM. You guys could make for an epic octagon style showdown as you battle it out for which manufacturer stinks the most

Not that I'm bitter about the clutch problem in my GT500 or anything like that, but I'll agree when it comes to Ford and 8.5 cermet double disc clutches and cast iron flywheels

 

Entertain me... what do you have?