December 19, 2008 10:33AM
How Ford Was Bailed Out, Too
By Ray Hennessey
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Ford's statement notes that the government gave emergency funding to GM and Chrysler, and not Ford. That is true: it did not receive the short-term loans from the government. But, it would be inaccurate to say Ford was not bailed out like the other two. Here's why:
- Ford is still seeking a $9 billion bridge loan from the government, though it notes it “hopes” it doesn't need it
- Ford also has said the failure of one or more of its competitors would also possibly lead to its own bankruptcy, so preventing such failures helps them
- Any concessions from the UAW on wages would benefit Ford.
So, while Ford did not get cash in this latest round, they, too, were essentially bailed out by the White House and Treasury.
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How many dollars would be pulled from the economy if any of Detroits automakers went under: advertising, charities, R&D, mortgages, services, taxes, gasoline usage and just the purchase of their own cars and trucks. People, the only fault the unions have commited is that they have been around decades longer than the others and the automakers are locked in to take care of all the retirees. I’m a manager and I would not be where I’m at were it not for the unions. I think everyone needs to believe that.
If they would build cars worth a crap they would not be in this mess.
Let them go under,,,I now drive nothing but foreign cars,,a honda ridgeline and a honda civic,,,you can’t beat their reliability,,besides, when I returned from Iraq, some piece of crap in Florida decided I was coming home in a body bag and stole my identity,,when I went to buy a new car,Ford and GM would not give me a loan..Funny thing thought, Honda saw my service of 23yrs to my country and exteneded me a loan for 23,000..I bought my first Honda in 06, and just bought my second last month,the Ridgeline…I will NEVER buy another American,union built car again….GM and Ford dealerships said to hell with me,,well backatcha….I hope you Fail Hard..
Wake up Ford Girl – they’re in such bad shape & you really believe they are going to give the money back. They won’t even give up a little (i.e., the UAW) to stay in business. Quit living in the dream world. Taxpayers are the ones who will be giving up everything.
Ford is requesting that the money be there for them “if they need it” Now some back story. If GM, Chrysler, and if Ford goes too, then even Nissan, Toyota, and Honda are going to be hurt bad. This is because alot of manufactures (Sylania, Siemens, APC) are suppliers to all of these companies. All of the Asian automakers that have plants here are going to feel the lost of parts for their cars. All of them are intertiwhined with each other.
So don’t bash the one that is having alittle more fore site that the others.
Go Daewoo
LOL
First of all we would buy American products if they were of good quality. The big3 build crap. I would love to buy a Ford/GM product but I have already been suckered into it before…therefore never again.
I think that the whole deal was to give union payoffs in trade for the killing of the GM Volt. George W, B. Obsoma, nor any other power brokers want an electric car in production…to many lobbist, the ones that own Washington, don’t want the Volt….
Anybody see the movie “The Death of the Electric Car”???
i think all three have hadd it hard on and off ever since 70s when america allowed japanese cars in the market. what is funny is bush gets on a podium claims capitalism is working that is so much bull. has never worked 100%. if it did we wouldnt be where we are, capitalism has only worked for top 2%of the people in every govt, who use s it.i believe capitalism as we know it should be overhauled do not confuse democracy with capitalism they are not the same .besides the crooks in washington are the only one makng out again,while us poor 98% of the world suffer under capitalism so isay too all of you stop going intoo these boring blogs go too beach instead enjoy life put your money under your mattress this is all a good reason why you might need it for a rainy day.
My husband works for Ford. He feels management could do a better job. HE feels that yes, the corporate people SHOULD take pay cuts including bonuses. He’s willing to take a cut if needed. He works very hard at his job. He is laid off frequently. He doesn’t ask to be out of work so often, but we are fortunate that he receives 95% of his pay during those times, or we would be homeless. And that’s the truth. He gets unemployment, plus a sub pay. Ford doesn’t have to do that, but they take care of their own. And he wouldn’t BE laid off so much if PEOPLE BOUGHT AMERICAN! like they should. If American people supported their own… instead of China or Taiwan or Japan or Mexico, and BOUGHT AMERICAN PRODUCTS we wouldn’t be in the situations we are in. We are a country that does not look at the real problems. We’re always looking to blame someone else. Maybe all of us should start looking at the things we own, where they were made, and why we have them. Maybe we should be stay in the USA to vacation and cut down on out of country vacations and SUPPORT OUR OWN PEOPLE! Maybe we should start attending worship to God and learn that all of the money we have isn’t ours but HIS! And what terrible stewards we are with it! HE just lets us have it. But we’re supposed to use it for Good; not corruption or selfishness or un=necessary “wants”.
Yes, this “bailout” is a loan from the people to the people. Buy Ford, or GM or Chrysler and stop whining.
Ford came closer to failing over a year ago and did (correctly I think) take steps to get their cash house in order by selling and mortgaging every thing they could while it still had some value. So they have bought themselves some months (or maybe even a year or so) more time that GM and Chrysler. If they don’t bring costs in line they will fail also as I suspect GM and Chrysler will. They only hope the US manufacturers have is to hold out till the new administration can get card check passed and force the Asian transplants into higher labor costs, not a good thing in my opinion. And that will only succeed if, some how, the rest of the economy gets cooking again, a real long shot.
BTW I don’t love the UAW but my wife is a UAW retiree (Dana) and we’re dealing with the issues of Dana’s bankruptcy now. How about a bailout for past failures too .
….I have even seen people make lame excuses for problems they were having with their imports rather than admit that the car wasn’t as great as it was made out to be. Yet, others that bash American cars will do so because of stupid things like the plastic tab breaking off that holds the sun visor in place, despite the fact they never had a lick of mechanical trouble out of it.
As for American cars not being made here, that’s another big lie. The big 3 still have the majority of their plants in this country along with the majority of their parts suppliers. Just think about what all goes into a car – glass, plastic, oil, rubber, wiring, fabric, steel, aluminum. They make hundreds of thousands of cars every year so they use countless tons of these materials that other Americans produce for them all over this country.
The American automobile is a huge piece of this country’s heritage and history. I can’t for the life of me understand why Americans would be so willing to let these icons be lost forever. I would much rather my tax dollars go to help my fellow Americans stay gainfully employed than to allow the profits of import brands (regardless of whether they are made here or not) be sent back to their homeland to fatten their coffers, than for this country to loose the profits that could help provide way more Americans jobs here when the money stays here from companies that are based here.
While I think the UAW is going to have to make the biggest concessions, I can at least understand why they don’t want when they have good benefits. No one in their right mind would. However, as Americans we should show a little compassion and understanding to what is a difficult situation for everyone involved, and it will affect everyone in this country regardless of where you live or who you work for.
As for all the hype about import vs domestic quality, I think this has been one of the biggest lies of all time propagated by the media and peer pressure. I have driven Chrysler products for the past 22 years and found every one of them to be well made and exceptionally reliable – and in most cases, better built and more reliable than these so-called better quality imports from first-hand experience. In fact the worst car I ever owned was a Nissan. Not that the American auto makers haven’t made some bad apples themselves, but the imports are not nearly as great as they are made out to be. I have seen Consumer Reports make comments about American cars that I have owned that were outright fabricated lies. With the auto magazines, if they can’t find something wrong with an American car in a review, they will nit-pick it with comments about the gap between the fender and the hood, or they will balk at the texture of the plastic on the dash, and say other ridiculus things.
This thread sure is full of a lot of finger pointing going on here, and I am appauled at what seems to be contempt for American companies that have helped this country in it’s most desparate time of need (namely WWII) especially when they were asked to do so. I cannot understand why Americans think it’s okay for these companies to go under when so many of our fellow Americans are in some way or another tied to one of these companies. Have Americans lost all sense of national pride and compassion for each other? Do you not see how losing even one of these comapnies would result in a tidal wave of economic disaster that will no doubt affect each and every one of us, either directly or indirectly? What do you think would happen to the state of Michigan if it lost nearly 1 million jobs? If you think the economy was bad after 9/11 or if you thought the Katrina disaster was bad, those will no doubt pale in comparison to what WILL happen if we loose any of these companies.
I am sick of hearing so much bashing about the UAW and the big 3 execs when virtually every other company in this country, along with professional athletes and Hollywood actors, take advantage of the same things, yet we go right on supporting these people in their businesses. I say let those that would cast the first stone at the UAW make huge concessions and wage cuts. Would you be so willing to make these kind of sacrifices? ….continued
Big Three, Big Deal.
Sadly, that’s the attitude of many Americans who have no brand loyalty to Detroit. Yet, these same people will carp about the bad economy and blame everyone but themselves.
As for quality and overall satisfaction, I’ll put my Chrysler minivan up against any foreign competitor. In fact, I’ve rented all of the rest of them and there is no comparison. Chrysler invented the minivan and still leads in innovation, yet its market share continues to decline.
HONK if you’re tired of hypocrite whiners in their Asian SUV’s.
Don’t bail out the Big Three – BUY their products!!
Now is the time for to shine above the other two. They can take the lead and cut cost where they can, (have workers that can do more then one thing) make a quality car that will last for a while, get good gas mileage. Now is the time to work on the hybrids car and truck produce some that will get 40-60 miles peer gallon. Then they will be king of the mountain. These is not the time set on their cans and do nothing, this is the time they need to get on the stick and make every step count toward some that the company and worker can be proud to make and sell to the world. If their European counterparts can do they can too.
There are other industries that employee more people than Ford or Chrysler. Do they get a bail out too. Look at the food industry, the people that raise the food we eat. They have been hurt by high corn/grain costs along with high fuel prices. Ethenol support by the government has also hurt these companies. If we bail out the people who make cars we should also bail out the people who produce our food.
Reply to DB—
The Auto Makers are not asking for money to be “given” to them (unlike Wall Street that has received almost a trillion $ in unfettered funds). They are getting LOANS that must be repaid to the tax payers. As American Consumer said above, it will cost a lot more if they are allowed to fail and/or are forced into bankruptcy. Look at this aid package as an investment by Americans for Americans. The words “given” and “bailout” have no place in these discussions.
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(Comment by Tiberius
December 19th, 2008 at 11:27 am
Put a lid on it Hennessy. You know nothing about the car business, much less Ford.
Also, Dan you are correct about the UAW, remember they are blind devotees to the Democrats, hence that is why they are not being hauled behind the wood shed and given the switch!!)
More like Pelosi and Reid will take them (UAW) behind the wood shed and give them a hand job.
Wow, a blogger that actually gets the situation.
For those that state it is an Bailout of only the 2 don’t get the industry in the US.
If GM and Chrysler go into bankruptcy (and perhaps even if they don’t at this point if the economy doesn’t turn around) the underlying supporting industry (suppliers) provide for the major 3 and even most of the foriegn transplants.
If orders drop significantly it will cascade to those and drive Ford into a supply gut and drive them into financial troubles. The blog is not bad mouthing Ford it is simply pointing that out. Further it would also hurt the transplant and reduce proction and cost jobs there also.
Does anyone understand that there are no billions to give. They are breaking the backs of the American Taxpayers. There is no money to give, it’s all a big joke and a ruse.
to US AUTO MAKERS…..
This is not about making fuel efficient cars!!! Anyone who believes that has been brainwashed by your local politician!! This is about properly running a business!! WE ASSUME that auto makers have the knowledge and abilities to manufacture, market and sell cars that Americans want. THATS YOUR BUSINESS, RIGHT??
In 2005 GM sold 9.17 million cars world wide. More than ANY other auto manufacturer.
Its NOT about selling the right vehicles…your selling more than anyone else!! Rather its about managements poor efficiency in running the business. Bluntly? Your costs are “out of control”…and that includes ALL “costs”….so bailout or not…GM WILL cut costs dramatically if they want to survive.
Reply to American Consumer-
I said it before and I’ll say it again… You should have written this article. Between your previous post and the most recent one, you have provided a far better glimpse into the true issues than the author could have.
Mr. Hennessey -
You have at best a naive understanding of competition (most liberals do), or at worst made a gross mis-representation of the underlying facts of the situation.
So, what is Ford suppose to do? Pay their UAW personnel more than what GM & Chrysler will be paying for the same work & be happy about it? Or, not ask for a federal back line-of-credit when government failed to act to prevent abuse in the financial markets until the credit market itself collaposed. Is Ford to sit by quietly as their dumb competitors are being provided below market rate loans by the federal government? (At least Ford’s management read the clear indications of this financial crisis a year ago and prepared for it while their competitors did little since they could wait & hope for the Congress to bail them out.)
Finally, why shouldn’t Ford benefit if their common suppliers survive? Surely, even you should understand that Ford had contributed to these companies’ revenues. Is Ford suppose to not do business with them because Ford didn’t ask for a federal bail-out loan?
Maybe you should take a course in high school business & economics before you step into this topic again. . .unless you just want to punish Ford for being competent, competitive, provided revenue to suppliers, and having posted profits during this year, & was taxed for such, which its American competitors haven’t done and probably will not be doing in the future as federal government welfare cases.
Joe – Newport Beach
Don’t journalist have to take a logic class in college? If not they sure should.
Guilt by association?? Why not write about how FORD ISNT in the same critical situation as GM and the steps they have taken to get where they are????
The above article is a waste of time…….must be jealousy here??…why are you so quick to drag Ford down to the depths of GM???
Sometimes I wonder why Ford gets so much heat. Ford which normally has the highest consumer confidence, Quality, Least Predelivery inspection problems, ect always seems to take a beating by the media. Pinto, Bronco II, Explorer, Crown vic, yada yada yada. Does anyone remember when the Toyota 4runners Front ends would become disconnected at highway speeds? New Tundra rear axle bearing issues, leading to the right rear tire and axle shaft coming out while driving? Honda’s fireball Civic hybrids? Nope but you’d be hard pressed to find some one who doesn’t know about the Ford Firestone crap. BTW The issue was Firestone not passing along the change in the PSI for the tires. Weird how that never made it to the news, even after Firestone publicly admited it. Now you can’t rent a trailor from Uhaul if you have a Ford Explorer….I blame the rise in reputation of Foreign auto makers on the Media. I have an Idea lets state a media group the only reports on Possitive stories, we’d have a niche market.