Ford CEO Worries Detroit Rivals Won't Survive

[2005Explorer]

Ford Motor Co. Chief Executive Alan Mulally said Wednesday he was increasingly worried about the fates of General Motors Corp. and Chrysler LLC after Detroit's Big Three submitted detailed plans to secure up to $35 billion in government-backed loans.

 

Quote 1:

In an interview with The Wall Street Journal in Washington, Mr. Mulally said he was "very concerned" about the financial health of GM and Chrysler after the auto makers told Congress they needed the immediate infusion of cash to survive...

 

Quote 2:

The company now plans to sell its five aircraft and Mr. Mulally's $2 million salary will be reduced to $1 if Ford accesses government loans. Mr. Mulally arrived in Washington this time inside a Ford gas-electric hybrid SUV.

 

"We are a in a different place" than other auto makers, Mr. Mulally said. "We believe we have sufficient liquidity to get through this recession. But if the economy continued to deteriorate and the industry continued to deteriorate, then even Ford might have to need a bridge loan also."

 

Quote 3:

Speaking about his upcoming testimony before Congress on Thursday and Friday, Ford's chief executive said he was enthusiastic to demonstrate how different his company is from its competitors. He also admitted Ford learned a lot from the skewering Mr. Mulally received for traveling to Washington on a corporate jet and the size of his multimillion-dollar pay.

Read entire store including a comparison of the automakers plans.

Edited December 4, 2008 by 2005Explorer

[theoldwizard]

Backing up what Mulally is saying is that both GM and Chrysler have both said they need cash before the end of December 2008 !

 

Wagoner and Nardelli need the proverbial "glass belly button" (because their head was so far up their ...) to have not seen this situation coming 9 months ago.

 

Ford, especially Bill Ford and the top management, should get accolades for going "all in" last year. Now their only concern is the whirling vortex that might suck them in if GM or Chrysler go under.

Edited December 4, 2008 by theoldwizard

[TStag]

Backing up what Mulally is saying is that both GM and Chrysler have both said they need cash before the end of December 2008 !

 

Wagoner and Nardelli need the proverbial "glass belly button" (because their head was so far up their ...) to have not seen this situation coming 9 months ago.

 

Ford, especially Bill Ford and the top management, should get accolades for going "all in" last year. Now their only concern is the whirling vortex that might suck them in if GM or Chrysler go under.

 

 

It's looking more and more like Ch11 for GM and Chrysler everyday. I can't really see how Ford can avoid the same fate if those two go under.

[98GMLS]

Sine Ford has enough cash to survive into 2010. When the GM and Chrysler stock are in the pennies, make a bid and take over both of them.

Eliminate most of the GM brands and only keep, Chevy and Cadillac. Sell the rest of the names to the Chinese.

Chrysler, keep Dodge and Jeep. But retain the Chrysler name for future use.

 

The would all operate under the Ford banner. It would be a merger of sorts, but Ford has control.

 

Of course this would be impossible under UAW/CAW contracts.

 

Yes I know it will never happen. But desperate times call for desperate measures. So I thought for today lets stir the pot a little.

[Ralph Greene]

The current administration has the power to get them some cash to tide them over, no matter what Congress decides.

 

Congress seems to think Ford, GM, and Chrylser cannot realy compete with the more "southern" auto manufacturers with their current cost structure, no matter how much they tighten their belt. So Congress favors a structured bankruptcy.

 

I wonder about the relavancy of the auto industry. When I was a kid, I dreamed of my future cars. My Dad wantd the car he drove to say something about his status in life. He drove Chryslers. My kids think of their cars the same way I think about our refridgerator. And that may be an even bigger long term problem. Times have changed.

Edited December 4, 2008 by Ralph Greene

[grbeck]

The current administration has the power to get them some cash to tide them over, no matter what Congress decides.

 

Congress seems to think Ford, GM, and Chrylser cannot realy compete with the more "southern" auto manufacturers with their current cost structure, no matter how much they tighten their belt. So Congress favors a structured bankruptcy.

 

I wonder about the relavancy of the auto industry. When I was a kid, I dreamed of my future cars. My Dad wantd the car he drove to say something about his status in life. He drove Chryslers. My kids think of their cars the same way I think about our refridgerator. And that may be an even bigger long term problem. Times have changed.

 

People still care about their cars and the "image" they present to the world...one reason for the success enjoyed by Honda and Toyota is because they have become the "smart" choice for the middle and upper-middle classes. Like it or not, the domestic brands have a terrible image. You wouldn't believe the negative reactions I get from people when I tell them that we have a Focus (which has been very reliable, by the way).

 

Regarding how people view their cars - the times really haven't changed all that much. It's just our perception of them. Despite what you see at classic car shows, most people in the 1960s and 1970s drove full-size and intermediate sedans, hardtops and wagons with mid-level V-8s, power steering, power brakes (most likely drums up until the early 1970s) a bench seat and and AM-radio. Those cars just aren't worth all that much anymore (or after the odometer hit 100,000+ miles), so no one bothered preserving them, and no one spends money restoring them.

 

Hemi Mopars, Cadillac DeVille and Eldorado convertibles, and Corvettes were very rare when I was growing up in the early 1970s.

 

Any Mustang was more likely to resemble the "secretary special" that Mary Tyler Moore drove in the opening credits of her television show than a Boss 302.

 

My young friends and I thought it was a big deal when someone drove a Continental Mark III or IV.

 

Prior to 1955, Ford had better styling than Chevrolet in every year except 1941-42, and maybe 1932. And Ford had the hot performance reputation with its flathead V-8. Ford also was more consistent in offering open cars, which were the "glamour" cars of the day, and its wood-bodied station wagons were coveted by the wealthy and Hollywood stars.

 

But Chevrolet easily outsold Ford in virtually every one of those years by offering what was the Toyota Camry of its day - it had inoffensive styling, very good workmanship, low running costs and decent fuel economy. But it certainly wasn't very fast, sexy or "youthful." That didn't come until the 1955 models.

 

The kids may have lusted after flathead V-8 Fords, but mom and dad bought Chevys. Considering that mom and dad actually had the money to spend on brand-new cars, it's obvious that GM was on the right track.

 

Things really haven't changed all that much.

Edited December 4, 2008 by grbeck

[forddaughter]

What the heck are we going to drive if they all go under? I will NOT buy/ride/drive in a foreign piece of crap car!

Edited December 4, 2008 by forddaughter

[grbeck]

What the heck are we going to drive if they all go under? I will NOT buy/ride/drive in a foreign piece of crap car!

 

All three aren't going to go under. Chrysler may be parted out, but Ford will survive, and I'll bet GM does, too (just not in its present form).

[DUCKRACER]

Ford Motor Co. Chief Executive Alan Mulally said Wednesday he was increasingly worried about the fates of General Motors Corp. and Chrysler LLC after Detroit's Big Three submitted detailed plans to secure up to $35 billion in government-backed loans.

 

Quote 1:

In an interview with The Wall Street Journal in Washington, Mr. Mulally said he was "very concerned" about the financial health of GM and Chrysler after the auto makers told Congress they needed the immediate infusion of cash to survive...

 

Quote 2:

The company now plans to sell its five aircraft and Mr. Mulally's $2 million salary will be reduced to $1 if Ford accesses government loans. Mr. Mulally arrived in Washington this time inside a Ford gas-electric hybrid SUV.

 

"We are a in a different place" than other auto makers, Mr. Mulally said. "We believe we have sufficient liquidity to get through this recession. But if the economy continued to deteriorate and the industry continued to deteriorate, then even Ford might have to need a bridge loan also."

 

Quote 3:

Speaking about his upcoming testimony before Congress on Thursday and Friday, Ford's chief executive said he was enthusiastic to demonstrate how different his company is from its competitors. He also admitted Ford learned a lot from the skewering Mr. Mulally received for traveling to Washington on a corporate jet and the size of his multimillion-dollar pay.

Read entire store including a comparison of the automakers plans.

I think his REAL concern is this. Ford, GM, Chrysler all buy millions of car parts from other, smaller companies. If the other two go under, the drop in demand will go down by 2/3 so the prices will go up and Ford may not be able to make enough of a profit to survive.

[NickF1011]

I think his REAL concern is this. Ford, GM, Chrysler all buy millions of car parts from other, smaller companies. If the other two go under, the drop in demand will go down by 2/3 so the prices will go up and Ford may not be able to make enough of a profit to survive.

 

I don't think the price of the parts is an issue if the companies who previously supplied you with those parts can't stay in business to supply them anyway.

[igor]

in an interview in Washington Post he said, that he cannot imagine how bad economy would have to be for Ford to need $9bn from the line of credit .. and if they need all $13bn, we would be in a full on "depression economics" - I think that is very well put.

 

Igor

[theoldwizard]

My take away from the Senate hearings today is that GM and Chrysler will get the money they are requesting because letting them go Chapter 11 (pre-packaged or not) would be much, MUCH worse ! The problem now is how to get GM the $4B they are requesting before the end of the year. (And another $4B be the end of January.)

 

Of course, look how fast they acted for AIG, Citi and the TARP. Definitely a double standard between Wall Street and Detroit.

 

Still nice to hear Mullaly say they don't think they will need the money !

[Philgag]

what are you toughts on the hearings today? I tought the guy that made the pannel raise hand and all made and excelent point and his speech was fabulous. I think people were more positive today and open to a bailout. I hope at least Ford and GM dont go down. That would really badly hurt the economy, and the pride and history of america. I am unsure about buying an escape 09 in case ford goes under in the mid term....

Edited December 5, 2008 by Philgag

[FordBuyer]

My take away from the Senate hearings today is that GM and Chrysler will get the money they are requesting because letting them go Chapter 11 (pre-packaged or not) would be much, MUCH worse ! The problem now is how to get GM the $4B they are requesting before the end of the year. (And another $4B be the end of January.)

 

Of course, look how fast they acted for AIG, Citi and the TARP. Definitely a double standard between Wall Street and Detroit.

 

Still nice to hear Mullaly say they don't think they will need the money !

 

It has been reported that GM has a plan B if Congress doesn't come through and it is looking more and more like Bush will do nothing as usual, and Congress doesn't want to do anything and just shoves it to Bush who doesn't want it. So that's what you got. Anyway, GM reportedly will just shut everything down, turn off the lights, pay their help nothing and defer payroll, and wait for next Congress and President to do something. GM figures they can hang in there another month if they do that. Nothing will be selling in January anyway. This will be worst January coming out on record. I wouldnd't want to be in retail this January or own a restaurant.

[ehaase]

I found this blog several months ago, always respect the perspectives of the author, and found the article on yesterday's hearings very helpful for someone like me unable to watch them on TV:

 

http://www.christonium.com/automotive/ItemID=12284939913205