Ford CEO Says Bankruptcy Isn't an Option
04-05-06, 03:42 PM
#1
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Ford CEO Says Bankruptcy Isn't an Option
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Associated Press
Ford CEO Says Bankruptcy Isn't an Option
By DEE-ANN DURBIN , 04.05.2006, 03:19 PM
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Ford Motor Co. Chairman and CEO Bill Ford said Wednesday that bankruptcy isn't an option for the nation's No. 2 automaker, which is struggling to return its North American division to profitability.
Ford said the company has strong liquidity - with about $20 billion in cash - and that regions outside North America are performing well. Ford earned $2 billion last year, down 42 percent from a year earlier but still its third consecutive yearly profit.
Nonetheless, Ford's North American division lost $1.6 billion last year, and the automaker's debt rating has been slashed to below investment grade. Ford also is steadily losing U.S. market share. The company now has around 18 percent of the U.S. market, down from 26 percent a decade ago.
"We're acutely aware of the state of our industry, of the state of a lot of the companies we do business with, and frankly, our own deteriorating ratings with the ratings agencies, and so we're working very hard on the fundamentals of our business," Ford said at an awards luncheon sponsored by the Automotive Industry Action Group. "We've got one big problem and it's the U.S. auto business, and we're going to fix that, and when we fix that, this discussion will disappear."
Ford said the company is moving ahead with its North American restructuring plan, which calls for cutting up to 30,000 jobs and closing 14 plants by 2012.
"The first thing we have to do is get honesty on the table, honesty about our competitive position, the strength or lack thereof of our products, the robustness or lack thereof of our processes, and really deal with each other with true honesty," Ford said. "It doesn't matter how good a plan you put together. If it's not based on cold reality, if it's not based on facts, it's not going to succeed."
General Motors Corp. also has said it's not considering a Chapter 11 filing despite a $10.6 billion loss in 2005 and the possibility of a strike at its biggest parts supplier, Delphi Corp., which has asked a bankruptcy court to throw out its labor contracts.
GM also is in the midst of a restructuring and announced this week that it sold a 51 percent stake in its profitable finance division for $14 billion.
Ford said he wouldn't comment on GM's situation, but said the challenges facing the U.S. auto industry are unprecedented.
"We've never had these kinds of winds buffeting us," Ford said.
Ford is the great-grandson of company founder Henry Ford and the scion of a family that still owns a significant share of the business. The Ford family owns an estimated 5 percent of Ford shares but controls 40 percent of voting power through its ownership of Class B stock.
Ford shares fell 11 cents to $7.57 in afternoon trading on the New York Stock Exchange. Its shares are near the lower end of their 52-week range of $7.39 to $11.48.
Associated Press
Ford CEO Says Bankruptcy Isn't an Option
By DEE-ANN DURBIN , 04.05.2006, 03:19 PM
Related Quotes
F 7.57 - 0.11
GM 19.91 + 0.37
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Ford Motor Co. Chairman and CEO Bill Ford said Wednesday that bankruptcy isn't an option for the nation's No. 2 automaker, which is struggling to return its North American division to profitability.
Ford said the company has strong liquidity - with about $20 billion in cash - and that regions outside North America are performing well. Ford earned $2 billion last year, down 42 percent from a year earlier but still its third consecutive yearly profit.
Nonetheless, Ford's North American division lost $1.6 billion last year, and the automaker's debt rating has been slashed to below investment grade. Ford also is steadily losing U.S. market share. The company now has around 18 percent of the U.S. market, down from 26 percent a decade ago.
"We're acutely aware of the state of our industry, of the state of a lot of the companies we do business with, and frankly, our own deteriorating ratings with the ratings agencies, and so we're working very hard on the fundamentals of our business," Ford said at an awards luncheon sponsored by the Automotive Industry Action Group. "We've got one big problem and it's the U.S. auto business, and we're going to fix that, and when we fix that, this discussion will disappear."
Ford said the company is moving ahead with its North American restructuring plan, which calls for cutting up to 30,000 jobs and closing 14 plants by 2012.
"The first thing we have to do is get honesty on the table, honesty about our competitive position, the strength or lack thereof of our products, the robustness or lack thereof of our processes, and really deal with each other with true honesty," Ford said. "It doesn't matter how good a plan you put together. If it's not based on cold reality, if it's not based on facts, it's not going to succeed."
General Motors Corp. also has said it's not considering a Chapter 11 filing despite a $10.6 billion loss in 2005 and the possibility of a strike at its biggest parts supplier, Delphi Corp., which has asked a bankruptcy court to throw out its labor contracts.
GM also is in the midst of a restructuring and announced this week that it sold a 51 percent stake in its profitable finance division for $14 billion.
Ford said he wouldn't comment on GM's situation, but said the challenges facing the U.S. auto industry are unprecedented.
"We've never had these kinds of winds buffeting us," Ford said.
Ford is the great-grandson of company founder Henry Ford and the scion of a family that still owns a significant share of the business. The Ford family owns an estimated 5 percent of Ford shares but controls 40 percent of voting power through its ownership of Class B stock.
Ford shares fell 11 cents to $7.57 in afternoon trading on the New York Stock Exchange. Its shares are near the lower end of their 52-week range of $7.39 to $11.48.
04-05-06, 04:26 PM
#2
Originally Posted by 1SICKLEX
"The first thing we have to do is get honesty on the table, honesty about our competitive position, the strength or lack thereof of our products, the robustness or lack thereof of our processes, and really deal with each other with true honesty," Ford said. "It doesn't matter how good a plan you put together. If it's not based on cold reality, if it's not based on facts, it's not going to succeed."
04-05-06, 08:04 PM
#3
Lexus Fanatic
iTrader: (20)
While Ford has real problems I'm impressed by everything I've read from and about Bill Ford. Most importantly their PRODUCTS are improving.
Even if it's not everyone's thing, the new Mustang is WAY better than the old one.
The F-150 is WAY better than the prior generation and doing very well, despite intense competition. No doubt the new Tundra's a significant threat, but then maybe Ford has something coming relatively soon. Plus mainstream truck buyers are pretty brand loyal.
The new Fusion and brand siblings have done well in reviews and are selling well.
The 500 is bland but quite refined, HUGE inside, and a bargain.
Ford's hybrid offering is weak though and they know it.
They must, as Bill Ford is saying, face cold reality to see where they're doing well and where they're weak and rapidly improve. The challenge is you don't know what your competitors have in the works so you may be reacting to 'today' and get blindsided by a competitor's moves. So Ford must innovate as well.
I think they're going to be ok though.
Even if it's not everyone's thing, the new Mustang is WAY better than the old one.
The F-150 is WAY better than the prior generation and doing very well, despite intense competition. No doubt the new Tundra's a significant threat, but then maybe Ford has something coming relatively soon. Plus mainstream truck buyers are pretty brand loyal.
The new Fusion and brand siblings have done well in reviews and are selling well.
The 500 is bland but quite refined, HUGE inside, and a bargain.
Ford's hybrid offering is weak though and they know it.
They must, as Bill Ford is saying, face cold reality to see where they're doing well and where they're weak and rapidly improve. The challenge is you don't know what your competitors have in the works so you may be reacting to 'today' and get blindsided by a competitor's moves. So Ford must innovate as well.
I think they're going to be ok though.
04-06-06, 05:19 AM
#4
Lexus Fanatic
Originally Posted by bitkahuna
Even if it's not everyone's thing, the new Mustang is WAY better than the old one.
.
The 500 is bland but quite refined, HUGE inside, and a bargain.
Ford's hybrid offering is weak though and they know it.
I think they're going to be ok though.
.
The 500 is bland but quite refined, HUGE inside, and a bargain.
Ford's hybrid offering is weak though and they know it.
I think they're going to be ok though.
The new Mustang, yes, LOOKS good....but materials-wise and fit-and-finish IMO it is a piece of junk. Check it out for yourself, if you want......and look at the way it is built and the materials they use.
True...the 500 is a nice machine, ( see my review ), especially with the AWD.....but the long-term CVT transmission durability is a question mark.
The Escape hybrid is not really Ford's...it is a Toyota hybrid system built under license.
I agree they will probably be OK in the end....but a lot of Ford employees may lose their jobs, and that will work against Ford.....people out of a job usually cannot buy or lease new vehicles.....INCLUDING Ford products.
Last edited by mmarshall; 04-06-06 at 05:28 AM.
04-06-06, 06:18 AM
#7
Lexus Fanatic
Originally Posted by Shawnmack
I think American car companies should Just stick to suv's and trucks because these latest retro crap just plain out suck this ain't the 60's and 70's.
And...before you pan the 60's and 70's........back then you could get in your car and actually DRIVE somewhere. Now, you get in your car and sit still....or just stop-and-go everywhere with traffic lights, speed bumps, and stop signs.
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04-06-06, 08:10 AM
#10
Lexus Fanatic
iTrader: (20)
Originally Posted by Pearlpower
If my Fusion is a indication of how well Ford is doing then they should pack up their bags ahead of time. Needs to go back in the shop again! 3rd time-6 problems. 13k miles. Not too mention the dismal safety scores it just received.
Last edited by bitkahuna; 04-06-06 at 08:15 AM.
04-06-06, 08:17 AM
#11
Originally Posted by bitkahuna
What are the problems? My GS was probably "in the shop" 3 times for problems in 13k miles too.
Transmission replaced
Updated software to fix hesisation
Front right door speaker replaced
Front left door speaker replaced
Left door aligned-typical Ford problem
Stereo/cd unit replaced-just went out.
and now-A/C compressor makes a loud whirling sound each time it is engaged-not the belt
Ah, almost forgot, 3 times now the car would not start up while cold.
Had to crank the sucker for over 5 minutes each time in several intervals to get it to kick over.
Ford says everything is ok. 
None of which is surprising to me. My expectation on receiving a Ford was not high anyhow so I am not that dissapointed.
Keep in mind that I paid nothing for the new Fusion anyhow-company car so I do not lose sleep over it.
Otherwise a nice car.
Now the Mazda 6 rental I had uses the same drivetrain though a tad lower in power was very nice. But then with it's Ford ties-who knows. I am going to dump the Fusion once we move and get settled and get something nice and reliable that I can throw a ton of miles on as a beater. Not sure what it will be yet.
Last edited by Pearlpower; 04-06-06 at 08:26 AM.
04-06-06, 11:38 AM
#13
i have meet LOTS of people saying that they will only buy american. what will happen when one day an american auto maker goes belly up? then 2? then nothing left. what will they do then...
04-06-06, 12:06 PM
#14
Hybrids
Ford to Offer Interest Free Loans Nationwide
The automaker is hoping to boost hybrid sales by offering interest-free loans on its Escape hybrid and Mariner hybrid.
April 6, 2006; Posted: 11:50 a.m. EDT (1550 GMT)
DETROIT (Reuters) - Ford Motor Co. said on Thursday it is offering interest-free loans to consumers nationwide on its Escape hybrid and Mariner hybrid sport utility vehicles.
The automaker earlier offered the cheap loans only in California and Washington, D.C.
"We saw a tremendous response from that and saw double digit sales increases," Ford spokesman Monte Doran said.
Sales of the Escape hybrid, which was launched in the fall of 2004, increased 17 percent to 1,441 in March from the previous month.
Overall, sales of Ford hybrid SUVs rose 7 percent during the first quarter compared to a year ago.
Ford is far behind leader Toyota Motor Corp. in hybrid sales in the United States, but is planning to increase production of the gasoline-electric hybrid vehicles tenfold to 250,000 by 2010.
Doran said the program went into effect Monday and will expire on July 5.
In addition to rebates, Ford is also spending on advertising campaigns, featuring Kermit the Frog, that tout the company's commitment to hybrids.
04-06-06, 12:13 PM
#15
I seriously doubt Ford would go under any time soon. They are not in the middle of a parts/labor fiasco as GM is caught up in.
On their Hybrids, more power to Ford. The more Ford sells, the more they will pay Toyota from where they licensed the older hybrid technology.
On their Hybrids, more power to Ford. The more Ford sells, the more they will pay Toyota from where they licensed the older hybrid technology.