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Ford set to retake Auto market supremacy…

January 17, 2009

A brief history of the beginnings of the Ford Motor Company

Why now? When the auto industry is floundering from lack of consumer spending and the highest rate of unemployment since the Reagan era? Why is Ford showing no signs of needing relief in the near future in lieu of promises made of lifting a staggering economy by a new administration and the Big Three Auto Makers receiving a Bail-Out?

Come to think of it. Ford was the only automaker refusing Bail-Out money during the last round of Congressional hearings. The memorable questions asked of GMC and Chrysler CEO’s would you leave your private jets for sale in DC and drive home from Washington? The unanimous response was negative.. much to the horror and anger of an outraged public seeing the CEO’s bad management practices were the direct result of their financial bind.

Senator Dodd deftly skirted the obvious cost cutting measure of trimming CEO’s mind boggling salaries in the 10′s of millions of dollars as a viable option aiding the auto industry keeping it afloat.

With little fanfare coming today from news outlets when:

Government Loans Chrysler $1.5 Billion to Get Credit Moving Again

The U.S. Treasury Department announced Friday that it has made a $1.5 billion loan to Chrysler Financial in an attempt to loosen a nationwide credit squeeze that has slowed auto sales to near-record lows.

The move follows a similar, $6 billion investment in General Motors’ lending arm, GMAC.

The money for the new loans comes from the $700 billion Troubled Asset Relief Program TARP originally authorized by Congress to help rescue the troubled financial industry — a move that has some Congressional Republicans upset. Some see it as an attempt to circumvent Congress, aiding the auto industry with money designated for other purposes, just days before President Bush leaves office.

The five-year loan will be secured against new auto loans — a move that should help Chrysler financial begin loaning the money to buyers quickly. Although no new finance-related incentives have been announced, we expect to see an announcement from Chrysler Financial within a few days.


Link

Finally, the U.S. auto industry can claim to be number one at something. Unfortunately, that number one position is as the industry hardest hit by the economic downturn. Reuters reports that a study by bankruptcy and restructuring professionals released Monday shows the auto industry leads housing and retail as the most distressed industry in the U.S..

“As the nation has slid into recession, auto and auto parts makers have been slammed by dropping sales, pushing industry stalwarts such as General Motors and their suppliers to the brink of bankruptcy. more at Reuter’s link.

So what is it about the Ford Motor Company that it was able to give itself safe harbor during the ravages of a depressed economy? Any ideas?

FOR THE LATEST ON THE BERG V. OBAMA CASE click here..Many thanks to Puma for Life.

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3 Comments
  1. January 17, 2009 5:15 am

    “The five-year loan will be secured against new auto loans — a move that should help Chrysler financial begin loaning the money to buyers quickly. Although no new finance-related incentives have been announced, we expect to see an announcement from Chrysler Financial within a few days.”

    Sweeeeet! I LOVE creative financing! Just when you think you’re stuck in a hole…a brilliant plan pops up out of nowhere.

    Now, why wasn’t something as creative devised for the economic bail-out passed by Congress?

    Intra Banking lending interest is at O%… and the public has an 8O% stake in bank ownership. In what world environment does an investor go into an investment deal of loaning money without at least expecting a return on his money?

    This is the basic deal Congress had voted on to be in the best interests of the People? Obama himself has stated we will be paying off these Trillions of dollars of debt for many generations to come…

    Why is that? In a year or two when banking problems are stabilized why wouldn’t the People’s money be collecting interest (never mind repayment) on the money used for the Bail-Out?

  2. January 17, 2009 10:44 am

    I am thinking, regarding Ford, that it is their European division that is carrying the rest of the company. Just a thought.

  3. January 17, 2009 12:53 pm

    Hi, Puma for Life,

    To date, I haven’t done much digging except for the fact it strikes me as an anomaly Ford Motor Company has outdone the other three Automakers with such phenomenal auto sales over the last two years, they are without serious credit problems.

    Doesn’t quite pass the sniff test..imo

    I remember a stretch with Ford, where every other minute they were announcing recalls on the Explorer for attention to safety factors. A defective wiring harness that could burst into flames, defective F150 trucks…, valve stem leaks….. Recalls are a big loser for any company

    Now they are expanding manufacturing Ford Autos in China and later on in Mexico.

    A few years back, we bought a VW Jetta that was wired in Mexico. When you pressed the cigarette lighter, the sun roof opened up. When the security alarm went off, we discovered it could only be shut off by unlocking and opening the trunk.

    (By that time, we were looking for tools to disable the thing)

    Any info you find into recent activities or plans of the FMC will be welcome here.

    I’m going to do more digging after the installation on the 20th.

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