Summary: For the first time ever, Ford is borrowing money under the cover of collateral. Already $154 billion in the hole, Ford is putting up its most profitable units - production plants, Volvo and Ford Motor Credit - to secure an additional $18 billion in funding. The additional funding will be used to lay off 40,000 North American workers and close plants - all part of Ford's plan to be profitable by 2009. the company has lost nearly $7 billion to date this year and has not turned a profit in eight of its last nine quarters.
Related links: Media coverage: WSJ • Reuters. Commentary: Ford Relying On Volvo Increasing Sales To Lift It Out of the Red • Highlights From Ford's Sales Conference Call: Inventories Not As Bad As They Seem? • Auto Nation: Detroit Needs To Get Real • Ford Expects to Slash 1H07 Production By 12%. Conference call transcripts: Ford Q3 2006.
Potentially impacted stocks and ETFs: Ford Motor Co. (F) • Competitors: General Motors (GM), DaimlerChrysler (DCX), Toyota (TM), Honda (HMC), Nissan (OTC:NSANY).
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