Ford Jellymoulds Posted January 29, 2009 Share Posted January 29, 2009 DEARBORN, Mich. - Ford Motor Co. said Thursday it lost $5.9 billion in the fourth quarter, but also said it has no plans to seek federal aid unless economic conditions worsen. The second-largest U.S. automaker says it burned through $5.5 billion in cash during the quarter. CNBC LINK Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 29, 2009 Share Posted January 29, 2009 On the bright side ( :lol: ), the cash burn-through was far less than I thought it would be. Quote Link to comment Share on other sites More sharing options...
F150 Man Posted January 29, 2009 Share Posted January 29, 2009 Why would you believe the cash burn is going to be less in 2009? I would say we are off to a very dismal start. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 29, 2009 Share Posted January 29, 2009 Why would you believe the cash burn is going to be less in 2009? I would say we are off to a very dismal start. Who said it would be less in 2009? I said it was less in the 4th quarter than I thought it would be. And well, the cash burn could very well be less in 2009 anyway, as the cost-saving measures implemented throughout 2008 will continue to save the company even more money in the long term. I'm not saying the cash burn will be less, but it could be. Quote Link to comment Share on other sites More sharing options...
Pioneer Posted January 29, 2009 Share Posted January 29, 2009 Why would you believe the cash burn is going to be less in 2009? I would say we are off to a very dismal start. Because Ford's CFO said so. Ford’s cash burn rate slowed for the fourth quarter from $7.7 billion in the third quarter. “We are confident that our burn rate will be substantially slower in 2009,” Booth told reporters Thursday morning. Quote Link to comment Share on other sites More sharing options...
LSFan00 Posted January 29, 2009 Share Posted January 29, 2009 I am going to post this from a non-professional journalist who no doubt is not nearly as smart as the folks Richard Jensen prefers to get his news from, but I think she is spot on; The automaker reported a $5.9 billion dollar loss in the fourth quarter, hemorrhaging even more money than gloomy analysts had been expecting: Ford Motor Co., which has already slashed thousands of jobs, will cut even deeper and draw on available credit lines after the auto maker burned through $5.5 billion in cash in the fourth quarter and posted its third consecutive annual loss. For the fourth quarter, Ford recorded a net loss of $5.9 billion, or $2.46 a share, as its full-year loss ballooned to $14.6 billion compared with $2.72 billion for 2007. Ford, which succeeded at easing its cash burn during the fourth quarter, now has $13.4 billion on hand to get it through 2009. Keep in mind that this is the auto company in the best shape of all the US domestics. Whether through luck or wily strategy, Ford managed to mortgage everything but the little blue logo before the financial crisis hit. They're drawing down about $10 billion in credit to supplement the $13 billion worth of cash they finished up the fourth quarter with. Meanwhile, back at the ranch, GM has announced that it's putting an end to the program that has annoyed anti-union forces more than any other: the jobs bank. About sixteen hundred workers are going to have to go on unemployment, which GM will top up to about 72% of salary and benefits. There's little realistic hope that those people will ever work as auto workers again: The automakers instituted jobs banks at a time when they were modernizing their factories and needed to win labor support for innovations that would mean a loss of jobs. The auto companies provided nearly all of an autoworker's pay and benefits when he or she was put into a jobs bank. UAW members went into a jobs bank if they remained laid off beyond 48 weeks. Jobs bank compensation is different from the money the company pays workers who are laid off -- which is known as sub pay -- to offset government unemployment benefits. "There's a huge difference in terms of what the supplemental unemployment -- the sub pay -- was doing and the jobs bank. The jobs bank was when they completely eliminated your plant and they had almost no hope of ever being called back," said Arthur Wheaton, a labor expert from Cornell University. "Sub pay was: You're on unemployment and it's going to have all of the same rules and requirements, you're only allowed so long, and there's a big component in there to say, 'OK, you've got to go back and get some retraining or you've got to get some education or do something to get back to work.' " The elimination of the jobs bank was one of the conditions that were placed on government money. Though I don't think the defenders of the UAW were correct to say that labor relations aren't a serious problem at the Big Three, they are right that cuts like this will not be enough to save the firm. The credit contraction has been catastrophic for auto sales--I don't believe, as some news reports claim, that no one with a sub-800 credit score can get a loan, but there's no denying that the cutoffs for credit quality are locking a major percentage of potential buyers out of the market. How long until Ford has to step up to the government handout window, and start dancing to Uncle Sam's tune? They say they have at least enough money for a year, but I don't see how they make it. The folks in the finance divisions at Chrysler and GM have got to be talking seriously about the attractive prospect of a competitive bankruptcy to shed debt and contracts--they're only held back now because of warranty worries. And if they don't go to a bankruptcy judge, the signs are very clear that they'll be heading back to Uncle Sam. Even though its operations are in better shape, and its management has a much firmer tether to reality, Ford cannot compete indefinitely against free financing from the Feds. Megan McCardle Quote Link to comment Share on other sites More sharing options...
J-150 Posted January 29, 2009 Share Posted January 29, 2009 the more of an effort Ford makes to go it alone without help, the less strings the goverment will have when they finally do ask for money (if they do) So far, they have shown the government they are doing everything right. Great product. Restructured workforce. Quality up. Class leading fuel efficiencies. If in 12 months Ford does ask, no senate committe can say they need to do things differently. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 29, 2009 Share Posted January 29, 2009 (edited) LSfan00: "I'm going to keep having things spoon fed to me by people who think like me, because it's much easier than dealing with cold hard facts" Edited January 29, 2009 by RichardJensen Quote Link to comment Share on other sites More sharing options...
one2gamble Posted January 29, 2009 Share Posted January 29, 2009 meh kind of ugly Quote Link to comment Share on other sites More sharing options...
Deanh Posted January 29, 2009 Share Posted January 29, 2009 Why would you believe the cash burn is going to be less in 2009? I would say we are off to a very dismal start. updates and more desirable product for one......realize December is ALWAYS a burn off to an extent due to REBATES aimed at moving the last of the model year vehicles to make way for the 09's, and in our case some 2010's..... Quote Link to comment Share on other sites More sharing options...
blazerdude20 Posted January 29, 2009 Share Posted January 29, 2009 lsfan: that lady is misinformed. ford is drawing the 10b asap because they are worried the banks wont actually have it if ford needs it later. please read more than one source Quote Link to comment Share on other sites More sharing options...
LSFan00 Posted January 29, 2009 Share Posted January 29, 2009 RichardJensen: The most condescending poster on the internet. Quote Link to comment Share on other sites More sharing options...
Bored of Pisteon Posted January 29, 2009 Share Posted January 29, 2009 Cash burn... Let's thrown another one on the fire guys... IT'S DAMN COLD OUTSIDE! Quote Link to comment Share on other sites More sharing options...
Bored of Pisteon Posted January 29, 2009 Share Posted January 29, 2009 LSFan00: The most condescending poster on the internet. Fixed it for ya' Richard. Quote Link to comment Share on other sites More sharing options...
battyr Posted January 29, 2009 Share Posted January 29, 2009 RichardJensen: The most condescending poster on the internet. He likes to use big words too. Quote Link to comment Share on other sites More sharing options...
battyr Posted January 29, 2009 Share Posted January 29, 2009 LSfan00: "I'm going to keep having things spoon fed to me by people who think like me, because it's much easier than dealing with cold hard facts" Often you can't trust the press. They don't state the facts, they just quote people or other sources that may or may not be right. Quote Link to comment Share on other sites More sharing options...
mlhm5 Posted January 29, 2009 Share Posted January 29, 2009 (edited) There is no sugar coating the worst performance in the history of Ford. Ford has less than $15 billion of credit left and current or near current losses are unsustainable. "Ford’s full-year loss of $14.6 billion, or $6.41 a share, was more than five times larger than its 2007 loss of $2.7 billion, or $1.38 a share. It is the equivalent of losing about $2,700 on every car and truck sold worldwide and more than the 105-year-old company’s 2006 loss of $12.7 billion, the previous record." - NYT No one is projecting USA economic conditions to improve in 2009, and Ford told Congress that if industry wide domestic sales are at 11MM, they would trigger $13 billion in loans. Analysts are forecasting that number at 10-10.5MM while Ford is at 11.5MM. Ford will need federal money by the beginning of the third quarter. Edited January 29, 2009 by mlhm5 Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted January 29, 2009 Share Posted January 29, 2009 Often you can't trust the press. They don't state the facts, they just quote people or other sources that may or may not be right. Or plain just fuck up the facts... Back in the day when Edison was building Cars and Trucks, the stupid local paper stated they where closing down forever during their summer shutdown :rolleyes: Quote Link to comment Share on other sites More sharing options...
Bored of Pisteon Posted January 29, 2009 Share Posted January 29, 2009 There is no sugar coating the worst performance in the history of Ford. Ford has less than $15 billion of credit left and current or near current losses are unsustainable. "Ford’s full-year loss of $14.6 billion, or $6.41 a share, was more than five times larger than its 2007 loss of $2.7 billion, or $1.38 a share. It is the equivalent of losing about $2,700 on every car and truck sold worldwide and more than the 105-year-old company’s 2006 loss of $12.7 billion, the previous record." - NYT No one is projecting USA economic conditions to improve in 2009, and Ford told Congress that if industry wide domestic sales are at 11MM, they would trigger $13 billion in loans. Analysts are forecasting that number at 10-10.5MM while Ford is at 11.5MM. Ford will need federal money by the beginning of the third quarter. Quote Link to comment Share on other sites More sharing options...
Edstock Posted January 29, 2009 Share Posted January 29, 2009 Ford will need federal money by the beginning of the third quarter. Like, sacks of money? Quote Link to comment Share on other sites More sharing options...
TStag Posted January 30, 2009 Share Posted January 30, 2009 Will the American tax payer have had enough by then? I mean how much is GM going to need, never mind Chrysler and Ford.... Quote Link to comment Share on other sites More sharing options...
Deanh Posted January 30, 2009 Share Posted January 30, 2009 Will the American tax payer have had enough by then? I mean how much is GM going to need, never mind Chrysler and Ford.... Chrysler weakest of the three, followed closely by GM....Fords got a ways to go before in the same scenario.... Quote Link to comment Share on other sites More sharing options...
LSFan00 Posted January 30, 2009 Share Posted January 30, 2009 Or plain just fuck up the facts... Back in the day when Edison was building Cars and Trucks, the stupid local paper stated they where closing down forever during their summer shutdown :rolleyes: Everyone should keep that in mind I think, but some folks only like their favorites discussed. Ms. McCardle rarely comments on the auto industry but she's generally a pretty bright news observer. In particular (though I didn't bold that part), she's wholly correct about the impact of the credit crunch on auto sales I believe. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 30, 2009 Share Posted January 30, 2009 Everyone should keep that in mind I think, but some folks only like their favorites discussed. And your cherrypicking of 'facts' in support of the laughable assertion that CRA caused the mess at Countrywide........ Countrywide being a company that was not subject to the CRA.... :hysterical: Quote Link to comment Share on other sites More sharing options...
xr7g428 Posted January 30, 2009 Share Posted January 30, 2009 And your cherrypicking of 'facts' in support of the laughable assertion that CRA caused the mess at Countrywide........ Countrywide being a company that was not subject to the CRA.... :hysterical: [/ Richard, Countywide could never have done what they did without the CRA. Get your facts straight. Keep in mind that I was then, and am now, a supporter of the CRA objectives, but at least I can admit that good intentions can produce unintended results. You have to follow the legislation over time. The early years of the CRA produced almost no changes to lending. In order to really get the ball rolling, the GSE's Fannie and Freddie were mandated to begin buying non conforming or sub prime loans in 1992. CRA was never a quota driven system, but Fannie and Freddie both had to meet set aside requirements. It was very clear that to business with the GSE's that they needed to hit their goals, which meant that lenders needed to play along. The GSE's were the instrument by which CRA was implemented. Without them buying up and bundling the risky mortgages, none of this would have been possible. They made it possible for banks to make loans that were simultaneously risky and low interest. Freddy and Fanny then then sold those mortgages for full price as if they were not risky. The entire market proceeded as if this were true and the risk were virtually non-existent. What was good for Fannie and Freddie looked good to every one else, and soon everybody was bundling sub prime and calling it good. As it turns out, bundling 1000 leaky boats together isn't the same as having one good one. The problem was that there was no way to lend to one targeted group (inside the red line) without collapsing the standards for the entire industry. This happened and pretty much everyone piled on to get at the free money. 10 years later, here we were. Read the 1992 legislation. The congress knew it was risky to put the GSE's in the sub prime business and they created a new bureaucracy to regulate the GSE's: too bad what they really did was to insure that the GSE's bought too much sub prime. And by the way, Countrywide was the poster child for meeting CRA objectives, and held up to other institutions as a shining example of how things should be done. Finally, Country wide DID own a bank, and the bank was subject to CRA, but the vast majority of loans were not originated by the bank, but by the separate mortgage company. No one ever said that the situation was not complex. No where this ties back to Ford is obvious, the lowest cost financing for new car purchase has always been the home equity loan. The deductible interest and the low rates were irresistible. New cars are not bought by poor people, and the tax advantage was important. With leasing looking tough and no HELOC money, my biggest concern for Ford is where will the buyers find the credit at rates they accept? Tax deductible interest is just as addictive as rebates to consumers. Quote Link to comment Share on other sites More sharing options...
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