Tumblr Icon RSS Icon

Ford Confuses Me

Posted on

"Ford Confuses Me"

Share:

google plus icon

I don’t really understand Ford’s position on the auto bailout:

Ford said in its plan that it could survive through 2009 with its current cash levels and by tapping its credit line with private banks, and that it could return to profitability by 2011. Even though it is better prepared for the downturn, Ford said it wanted $9 billion in loans to draw upon if necessary.

Ford’s chief executive, Alan R. Mulally, said the prospect of a failure of G.M. would cascade through the entire domestic auto industry and put millions of jobs at risk.

“We are very, very concerned, and that’s why we went with G.M. and Chrysler to Congress even though we think we have sufficient liquidity,” he said in an interview.

Ordinarily, you would think that having two of Ford’s largest competitors go out of business would be good for Ford (and Toyota and Honda and Nissan) since their failure would likely have only a small impact on the aggregate quantity of cars sold, leaving more sales opportunities for non-defunct companies like Ford. What could really drive Ford under, one might think, would be government support for otherwise-bankrupt competitors keeping an excess supply of cars on the market and driving down Ford’s sales and profit margins. Obviously, Ford doesn’t see it that way. But that’s a bit unusual, and I’d be interested in hearing the explanation in more detail than a vague metaphor about GM’s failure “cascad[ing] through the entire domestic auto industry.”

Tags:

« »

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.