Ford set to retake Auto market supremacy…
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.
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?