Ford reacts to Chrysler bankruptcy
Although the automotive industry has been bracing for a Chrysler bankruptcy for some time, last week's official announcement of a Chapter 11 filing still came as a shock. One of the long-held assertions about bankruptcy was that once one domestic automaker filed, the others would eventually be forced to follow suit. The other belief was that bankruptcies would hamper the supply chain, which would in turn hurt other automakers besides the other Detroit 2.
Ford is out to assure its fans and stock holders that Chrysler's bankruptcy isn't going to hamper its supply chain or restructuring efforts. While Ford has planned its way around any problems with Chrysler, the company still wants to see a speedy recovery for the Pentastar. Ford's open letter to the public is a show of support for Chrysler, but it's even more an announcement that the Dearborn-based automaker is going to be largely unaffected by its competitor's bankruptcy. Hat tip to Thomas!
[Source: The Ford Story]
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Reader Comments (Page 1 of 1)
Kumar 9:04AM (5/04/2009)
So did Ford just vote GM off the island? ;)
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Jei 10:38AM (5/04/2009)
No, I don't think that was the intent. Rather, Ford is saying that they hate to see a legendary automaker and their cross-town rival get into this dire predicament. If one of the Big3 were to just be shut down, a lot of history and "money-making" rivalries would be gone as well.
The US Big3 seems to do well when they compete against one another. Their obvious financial & market share issues come from a history of not "seriously" competing against their foreign competition until it was too late. The Big3 have been so comfortable at the top, they forgot to be the best. Cadillac & Lincoln were the luxury standards, so to speak, but they were more like lessons in "how to ruin your legendary brand and take the other divisions with it..."
I can't imagine a Mustang without a Camaro or a Charger/Challenger. It really wouldn't be a competition to compare the muscle car trio to performance brutes like the 911, R8, or a 599 GTB. Muscle car interest was built on the rivalries of the 3 companies. And if one were to go, it would not be the same anymore.
John 2:07PM (5/04/2009)
What are you talking about Jei? The Mustang has been without the Camaro for seven years and without the Challenger for a lot longer and hasn't missed either one. The ladies still love their V6s, the rentals still love their convertibles, the retirees still love their collectibles, the kids love their added turbos and body kits, and the track guys love their Roushes and Saleens. Ford didn't get into the Koni Challenge, FIA GT4, drag racing, or the the Mustang Challenge series over the last few years just to beat Camaros. They did it because lots of Mustang fans love fast Mustangs, buy a lot of them, and love to see them race against BMWs and Porsches too.
I for one welcome the other guys back and look forward to seeing them compete in the Koni Challenge, but when they depart again, I know I will still love and be involved in the Mustang hobby without them.
Jei 3:25PM (5/04/2009)
@John:
You're right. The Mustang has been soldering on w/o the other 2, but it wasn't until rumors of the return on the Camaro & Challenger that the muscle car rivalry started to heat up again. Let's face it, the Mustang has been OK, but it hasn't really been interesting until Ford released the latest exterior update. There have been countless aftermarket, special-edition releases (which started to get very old after the 1st 10 special-eds), but not too many media outlets were buzzing about muscle car rivals during the Camaro/Challenger hiatus.
I know a lot of people love Mustangs, and that's why Ford continues to make them...seemingly with as little technological updates as possible; but people continue to buy them. It's just not as interesting w/o comparable competition.
tuxchown 9:52PM (5/04/2009)
I get jei's point. Very interesting analysis. ++
Carlos 9:15AM (5/04/2009)
That's awfully nice of them, I'm glad that Ford pulled their heads out of their butts and started making great looking products!
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DesiAuto 9:23AM (5/04/2009)
"Although the automotive industry has been bracing for a Chrysler bankruptcy for some time, last week's official announcement of a Chapter 11 filing still came as a shock. "
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Still came as a shock? To whom? Whoever that is needs to be fired, especially if they are in some management position.
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Nellydesign 9:29AM (5/04/2009)
I think they mean shock as in "I can't believe such a historic company has gone bankrupt. What a challenging time for our industry." Not "shock" as in "WHA WHA WHAT??? WHY DIDN'T ANYONE TELL ME THIS WAS GONNA HAPPEN OMFGLOLBBQZORZ!!!"
tuxchown 9:55PM (5/04/2009)
A shock. Not a surprise, but a shock. It's like someone who fears a needle. No matter how prepared the person is, he's still going to be shocked when he gets poked.
dereksawyer 9:32AM (5/04/2009)
i'll still buy a honda lol
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chconline 10:52AM (5/04/2009)
I would too, but not related to Ford or this story. What's the point of saying that? :P
fixitfixitstop 11:46AM (5/04/2009)
Typing "lol" at the end of comments is about as lame as making firstie comments.
John 12:12PM (5/04/2009)
And I'm going to Subway for lunch. What does either have anything to do with the story?
Jon 9:35AM (5/04/2009)
People have equated the effect of a Chrysler reorganization with a GM reorganization. In reality we're talking entirely different beasts because of GM's considerably larger size. While the Chrysler reorganization will hurt the suppliers and push some over the edge, it is nothing compared to what would result from a GM reorganization.
Also - AB should get a lawyer or law student to do some informative commentary on these topics. A lot of the issues are, understandably, not entirely intuitive for corporate/bankruptcy lawyers.
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jpm100 9:40AM (5/04/2009)
Everyone, Ford included, has had 6 months to prepare. And the bankruptcy is managed and partial backed from the guberment. Totally different animal. Even if GM executes one although that will be felt more it won't be like if it occurred 6 months ago.
katshot 10:06AM (5/04/2009)
If this one goes as well as the last one, everyone will make-out rather well. Too many people listening to the talking heads who play everything up for ratings and to keep their jobs.
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jhjacobson43 10:32AM (5/04/2009)
I know everyone responding to this piece is smarter than the first few posts. This is nothing more than a PR note from Ford. Read between the lines. Their saying, We're Americans, we're all in this together, blah, blah, blah, but under it all the point is, "Hey, were Ford, we haven't declared C11 and we've got cars/trucks to sell." Gets the Ford name out front while all the attention is on the other two. I don't necessarily agree, but understand the approach.
I do have a question for this bunch tho.... Suppose both GM, along with Chrysler does a C11. They both restructure their wage profile, get rid of most of their existing retirement (gov't pension?) and health care costs and so on.... what will happen to the existing union contracts with Ford? What sort of position does this place Ford when dealing with the union? Strong or weak?
Certainly once GM & C restructure, and can presumably build vehicles for less, where does that put Ford?
Seems like - if the union doesn't agree to the same deal with Ford - that Ford will find itself in the same position as GM & C. It will just take a little longer to get there.
As a taxpayer, why do I feel like - once again - I'm being asked to bend over? For all three companies the Gov't Pension Fund (that's you and I folks) is going to demand we grab our ankles.
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beowulf 11:00AM (5/04/2009)
You might want to do some googling to answer your questions.
Ford hasn't taken gov't money, so as yet you as a taxpayer aren't having to assume the Limbaugh.
Furthermore, Ford and the UAW are doing just great re pensioners, thank you. The Blue Oval didn't embezzle, excuse me, raid, their pension fund and were able to essentially sell it (and most importantly, the responsibility for it) to the union. GM and Chrysler busted their respective retirement piggy banks years ago, so they have nothing with which to make a deal with the unions.
xuyen 9:41PM (6/03/2009)
The retirees are the ones who will take the worst of the bankruptcy deals of the Big 3. You work your whole life being told by the union that the reason you can`t get this or that is because you are getting a safe retirement package, then when you are forced out by the company and the union, they take away your safe retirement. Just walk in those shoes for a while.
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