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Ford won't be joining General Motors and Chrysler on any return trips to Uncle Sam's Bailout Buffet. The automaker plans to stay in Dearborn and cook dinner at home, so says CEO Alan Mulally, who told reporters at the NADA convention, "We don't want to borrow any more money. We have sufficient liquidity to fund our transformation plan, which means our business is in a relatively good shape." While GM and Chrysler were approved for over $17B in bailout bucks and are already well into the cash pile, Mulally had instead requested access to a $9 billion line of credit (you know, just in case). The difference: the feds have yet to move on Ford's request.

Ford's decision to basically mortgage everything it owns during a $23 billion borrowing spree in 2006 has become the catalyst for a significant and ongoing PR victory. Those actions are what let Mulally distance himself from his counterparts during the Capitol Hill bailout hearings, and they're paying dividends again now as Mulally tells the world that Ford doesn't intend to look for any more dough. We've talked to plenty of friends and relatives – people who don't otherwise follow the auto industry – who view Ford in a more positive light specifically because they didn't take bailout money. Yeah, Ford is in debt up to its eyes, but it made its moves on its own, long before the Detroit death struggle became C-SPAN programming. If Ford manages to pull this off, Mulally will have shown himself to be well worth every penny that Ford pays him.

[Source: CNN Money]


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  • 42 Comments
      • 6 Years Ago
      Good for them. Interesting to watch. Either way, hold on until summer, my dealer IS getting me a Raptor as soon as available. Can't wait!


      "Ford's decision to basically mortgage everything it owns during a $23 billion borrowing spree in 2006 has become the catalyst for a significant and ongoing PR victory. "
      • 6 Years Ago
      Congratulations and thanks to Mr. Mulally and his team for not stealing from me. Also, thank you for excellent products like the Fusion while the rest of your Detroit brethren attempt to sell whatever it is they claim is a world class car.
      • 6 Years Ago
      Great pic. The hood scoop on my Mustang GT is fake too and I hate it.
      • 6 Years Ago
      As it stands, Ford is already functionning with the liquidity acquired from mortgaging all of their assets. At the time, some bankers were foolish enough to lend money against asset that they will be hard pressed to sell if Ford goes belly-up.

      Do not forget that they still have to repay over 2B a year interest on this. They also burn cash pretty fast. Remember GM had over 22b or 25B at one point in time. With the economy in such a bad state, it will not be long before they reach a critical level.

      As far as public relation goes, I don't know anybody in my surrounding (who is not in the automotive sector) who does not put Ford in the same Detroit's bandwagon.

      Last, they want to import the Europe production in US. Viable plan if the oil goes up. Otherwise, I doubt that the US citizens will downsize that much.

      • 6 Years Ago
      At a baby, Ford. Mulally, I respect you. You are proving Ford to the world that you guys are the best of the Big 3.
      • 6 Years Ago
      loans...bailout...whatever ford was smart enough to dump aston martin, landrover and jag while they had the chance. gm should have done the same with their useless brands. to late now
      • 6 Years Ago
      This is good news for the US and even better news for Michigan.
      The only thing that I don't understand is the value of Ford's Stock. It would seem that Wall Street would pay more for Ford Stock than for GM stock based on this information, but GM's stock rallies when it gets Fed money and Ford's stock slips. What gives?

        • 6 Years Ago
        Don't worry about what gives, just go buy some Ford shares and be prepared to profit.
        • 6 Years Ago
        Maybe those Wall Street slimebags had written off Ford and thought they could make more money with GM. So they have a vested interest to pump and dump or shortsell GM stock.
        • 6 Years Ago
        There are 4.3 Billion Shares of Ford stock, compared to 2.13 Billion Shares of GM Stock. That is why the price is lower. There is more of Ford out there to buy so demand is less than supply. Also, you have to consider that the values of these companies are about the same right now.
      • 6 Years Ago
      Ford just couldn't resit... they had to add a hood scoop.

      Nonetheless, pretty glad Ford will manage to hold its own.
        • 6 Years Ago
        stupid scoop. they dont work unless your going 350- 400 mph anyway. But good for ford. I know which direction I would go if I were buying a muscle car.
        • 6 Years Ago
        Uh....Subaru says you are wrong.
      • 6 Years Ago
      Mullaly managed to turn Boeing around. Now he's doing it for Ford. Midas touch, anyone?
      And kudos to Ford for realizing he couldn't handle the company and being humble enough to turn it over before he ran it into the ground.
      Well done, well done.
      You're my boy Blue (Oval)!!!
        • 6 Years Ago
        @LS:
        the problem at BA is exactly like the problem with GM's Volt: expectation mismanagement. Great products (in 787 case, best selling passenger aircraft before 1st flight), great strategic visions, compelling competitive advantages. However, in both cases, the expectation communications have been poorly managed for the sake of garnering publicity. Volt's desired specs were brandied around only to be revised repeatedly on every major auto shows. A shell of an aircraft was hastily assembled just so they can roll it out on 2007-08-07 (7-8-7), only to be reworked later.
        At least one of those products, however, is pretty much guaranteed to be a great success already.
        • 6 Years Ago
        Yeah, dressing up the books is certainly what he did. That's how they got from near bankruptcy to leading Airbus again. Dreamliner delays are generally caused by suppliers, but the Dreamliner is much more in line with the current climate than the A380. If the books were just cooked, Boeing would sure be a lot worse off than the are now (see: Merril Lynch, etc.). Cooking of the books just doesn't last.
        Regardless of where the Dreamliner is now, it was ahead of it's time and fits perfectly with the current climate. Airlines are still buying this plane, so it will be a success.
        "SEATTLE, Oct. 15, 2008 -- The Boeing Company [NYSE: BA] is pleased that American Airlines has reinforced its long-standing relationship with Boeing by announcing its intent to purchase 42 Boeing 787-9 Dreamliners." Many more airlines are buying..if you care to read: http://www.boeing.com/commercial/787family/news/index.html

        What he did with Boeing is very similar to what he's doing with Ford. He took PROactive, not REactive, measures.
        • 6 Years Ago
        I have a Dreamliner as my desktop. I like the plane. But it was going to be years ahead of its time, and now it's just barely going to beat the A350XWB out the door, and barely beat it on fuel costs. And that's if it retains its current schedule, which we just don't know until it flies. And the 787-9 (which competes more directly than the A350XWB) is another year behind even the 787-8!).

        I don't know where you get your info, but Airbus has led Boeing in orders for every year for 5 years running (units, not total value).

        I never said Mullally cooked the books. I said he dressed up the books. He made the company look better and took a lot of preorders for the 787 that will now never be delivered (note Airbus does this too).

        He didn't turn the company around. Until the 787 gets out the door, they're not in great shape. And even then they won't come out smelling like a rose.
      • 6 Years Ago
      Ford hopefully will start producing better and better products(that people actually want) to back that remark especially in their U.S. small car sector (the old car-new clothes Focus is a mistake). I wish them the best. GM looks like it is run by Bush...living in La-La land....the $40,000 Chevy Volt electric car is not going to save them and they are putting all their eggs in the basket on that car. GM needs to folow the Toyota/Honda business model....and Chrysler should have died gracefully not pushing back their death with Fiat!
      • 6 Years Ago
      Ford's doing a nice job.They're pretty underrated considering they offer a good size car(the Fusion 2.5 I4 )that gets 34 MPG HWY.
      Pretty good.
      • 6 Years Ago
      It really was a genius move, from a financial perspective, to mortgage everything when there wasn't a credit crunch. And it really seems to be paying off for them. Hopefully everything works out. With any luck and a little more saving I'll be able to afford the 2010 Fusion. Yeah!
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