Ford's turnaround edging ahead of GM's

[Noah Harbinger]

GM quality what? inferior at best how many of their cars made the top ten list for complaints per 100 guess what it,s a big fat ZERO!! those old diehard chevy fans out their don,t want to face the facts.

 

 

Someone interpret this for me, please.

 

My best interpretation:

 

"There are no independent sources claiming that GM cars have improved in quality, despite what their fans are saying."

[salsakingcpa]

I saw this one too, and truly believe that Ford is far ahead of GM, and the stock market confirms it too. In the last 6 months, Ford's market capitalization has been equaling, and now it is over 2 billion dollars greater than GM's.

http://finance.google.com/finance?client=ob&q=F

14.26 (Ford) vs 12.22 billion (GM)

 

GM turn around is really hollow as it basically sold everything that it owned: GMAC-51%, GM's transmission unit, it's heavy duty trucks unit, a stake in Fuji/Isuzu?, and now it is bringing cars from China, and in the process teaching a future competitor SAIC how to produce good cars. It's many divisions and subdivisions within GM has caused it downfall. Technically, GM is insolvent as its net worth is a negative 30 billion dollars. I think its management is thinking GM is too big to fail, and that uncle sam is going to come to its rescue, and who knows what's going to happen. GM just want to be number one car producer in the world, and not worry about making a profit, sales don't pay bills in the end; profits do. GM has never made profit in its Swedish division, if I were GM, this should be just closed, along with its European division because it almost never made any money.

 

Ford turnaround is almost done; I think. It is too bad that US is in a recession; otherwise, Ford would become number one in the US in one or two years? Ford finance really screwed up because it did not refinance its debt when ford had investment grade rating from S&P and Moody's. This is the reason that Ford Finance Division in Japan called Primus just sold its majority stake to Sumitomi? Just google it and you'll see it. It is trying to raise cash by selling financial assets but it's going to lower its earnings.

[RichardJensen]

Ford =did= refinance its debt when it was still investment grade. 10 year notes for $7B back in 2003, IIRC.

 

Regarding Primus, the article says their asset portfolio is worth ¥200B, which equates to a little under $2B at today's exchange rate.

 

It's not a major player in the captive credit market. And one way or another, about 18% of Primus profits will end up on Ford balance sheets, and a further 26% will remain under the company's purview.

[salsakingcpa]

Ford =did= refinance its debt when it was still investment grade. 10 year notes for $7B back in 2003, IIRC.

Regarding Primus, the article says their asset portfolio is worth ¥200B, which equates to a little under $2B at today's exchange rate.

It's not a major player in the captive credit market. And one way or another, about 18% of Primus profits will end up on Ford balance sheets, and a further 26% will remain under the company's purview.

 

$7 billion is a chop change; Ford needs $5 billion of fresh capital every month in order to have good sales each and every month. Please look at this article: http://www.banknet360.com/blogs/Item.do;js...1&biId=1316

 

Last year it raised 46 billion dollars in fresh capital through a variety of means, and this year it needs another 16 billion bucks.

[RichardJensen]

$7 billion is a chop change; Ford needs $5 billion of fresh capital every month in order to have good sales each and every month. Please look at this article: http://www.banknet360.com/blogs/Item.do;js...1&biId=1316

 

Last year it raised 46 billion dollars in fresh capital through a variety of means, and this year it needs another 16 billion bucks.

Actually, the article said Ford C-R-E-D-I-T anticipates raising between $20 & $40 billion.

 

What do they use this money for?

 

They buy car loans from car dealers.

 

This side of Ford's business has NOTHING to do, financially, with Ford's automotive operations.

 

=====

 

And please, if you're going to insist that I'm wrong, could you stop using 'cash' and 'capital' interchangeably. They're not the same thing, you know.

 

BTW, take a look at this:

 

http://www2.standardandpoors.com/portal/si...rchValue=395367

 

You'll need an S&P account, but they're free.

 

Just search for Ford, and notice the ratings on the Ford Credit ABSes

 

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And, FWIW, $7B was about 1/4 of Ford's cash & cash equivalents in 2003. It's not chump change.

[theoldwizard]

I have been saying this since 2005 - Hate Bill Ford as much as you want, but he fixed the structure of the company to an incredible degree.

I like Billy and I believe that most working level engineering folks were happy to see a Ford in the driver seat. Much, MUCH better than Nasser. We all loved the way it was handled (Sorry you missed the board meeting at my house where we decided to fire your A__ !).

 

I just don't know where you come off saying he "fixed the structure". Basically, he unwound everything that was done during Ford 2000 and put thing back the way they were !

 

There were things he simply could not grasp or finish, but he layed an incredibly solid foundation for Alan to work with.

Sorry, I just don't see it.

 

He was "handled" by the old guard. "Tell him what he wants to hear, his name is on the building !"

 

He just doesn't have much business acumen. as Jacques would say.

 

The Escape Hybrid has gotten lots of positive press, but the engineering costs have been outrageous. Then being caught having to pay battery "licensing fees" at the 11th hour (because you didn't know you were violating someone else's patents) and not properly lining up suppliers to a growth strategy that you announce in public. Inexcusable !

 

Well, I hope he has fun playing with the Detroit Lions. Raising ticket prices 18% after 7 consecutive losing season sounds like a great idea !

Edited April 4, 2008 by theoldwizard

[theoldwizard]

Actually, the article said Ford C-R-E-D-I-T anticipates raising between $20 & $40 billion.

 

What do they use this money for?

 

They buy car loans from car dealers.

 

This side of Ford's business has NOTHING to do, financially, with Ford's automotive operations.

Credit USED TO BE the most profitable part of the company. The joke was "We build cars so that we can sell consumers credit !"

 

While technically your statement about the "Credit Company" has nothing to do with the "Motor Company" is accurate, you can't sell cars these days with out credit (except to me). Ford will do everything it can to save that part of the company with hopes of it returning to it previous profitability.

Edited April 4, 2008 by theoldwizard

[RichardJensen]

Credit USED TO BE the most profitable part of the company. The joke was "We build cars so that we can sell consumers credit !"

 

While technically your statement about the "Credit Company" has nothing to do with the "Motor Company" is accurate, you can't sell cars these days with out credit (except to me). Ford will do everything it can to save that part of the company with hopes of it returning to it previous profitability.

The way I see it, Ford Credit is a tool for recovering advertising expenses (incentives) on vehicle sales.

 

And FMCC is really not in that tough shape. With lowered interest rates, it should be able to swing to more profitability. Historically, loan companies clean up when interest rates fall.

[mkaresh]

Joining this thread a bit late, but anyway...

 

Maybe Ford has better product coming in terms of styling and general appeal. With the possible exception of the Flex, haven't seen it yet.

 

On the quality front, they've definitely made huge strides based on TrueDelta's results. The Five Hundred, Fusion, and Mustang continue to impress. GM, on the other hand, has had a string of messy launches.