An extensive piece at HuffPo:
DEARBORN, Mich. — By shunning government loans, Ford Motor Co.'s top executives say they hope to buff up the automaker's image and set it apart from its cash-starved Detroit competitors, General Motors Corp. and Chrysler LLC.
GM and Chrysler are in desperate need of government money and may not last until the end of the year without it. But Ford set up $23.5 billion worth of credit in 2006, and both Chief Executive Alan Mulally and Executive Chairman Bill Ford Jr. told The Associated Press on Tuesday they are confident that the borrowing, coupled with restructuring and new product plans, will get them through the recession without relying on the government.
Good news, but it comes at a cost:
Ford, he said, has cut its factory capacity to match demand, and it anticipates no further cuts will be necessary as long as the U.S. auto market doesn't worsen considerably. The company has announced the closure of 17 factories and eliminated 50,000 jobs since 2005, many through buyout and early retirement offers.
I'm sure that some of the 'early retirement offers' amounted to 'don't let the door hit ya in the ass on the way out'.
If I learned one thing from 40 years as a mechanic, it's that there is no such thing as 'job security'. It's why they put wheels on tool boxes. The difference being that motorcycle mechanics expect, almost demand, that they
The sad irony is that when bike wrenches start to settle down, family, mortgage, actual responsibilities, etc., they become auto mechanics at about three times the pay and steadier work. What with the closure of so many car dealers, a lot of them are now out of work when they don't want to be.
FoMoCo is wisely hedging its bets as well:
Ford wants to set up a $9 billion long-term line of credit from the government but would use it only if the U.S. auto market worsens or fails to recover. The company has said it has enough borrowed money to make it through 2009 without government help.
He said Ford would comply with all government conditions if it tapped the loans at a later date.
That's big of 'em!
This is a little disturbing:
Ford also said he'd like to see the government keep gas prices stable with taxes or a floor on crude oil prices so automakers can plan their models better.
Gasoline prices peaked at more than $4 per gallon during the summer but now are well below $2 per gallon in many areas of the country.
"We plan our vehicles three, four, five years in advance," he said. "It makes life very difficult if the market gyrates wildly over the course of several months, and that's exactly what we've seen happen."
Note to Ford: Plan for low supplies of oil at high prices, dudes. Sure, keep making a few Excessivecursions and Exploders. Some folks will always need the capacity. Most people that buy them don't and they may be starting to wise up after a few $100 fill-ups. Don't rely on the big gas guzzlers as your cash cow anymore. In other words, get with the fuckin' program and stick to it. Same goes for GM and Chrysler.
What we want is for gasoline demand to be so low that the price at the pump stays around $1 - 2 and the Saudis have to eat sand. Or pound it. I hope the day comes when we get all the oil we need from Canuckistan.
Other than that, good on yer, Ford. Even if eschewing an immediate bailout is only a PR move to keep auto buyers' confidence up so they'll be more likely to buy your products and, rightly or wrongly, expect a servicing dealer to be there for them down the road, it was a good move.
Then again, it may have been some good financial planning. Imagine that from a U.S. automaker! Or dumb luck. That I'd believe.
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