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Ford's (F) ability to avert bankruptcy and its recovery are due to its "One Ford" strategy in...
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Thursday, November 22, 2012, 9:00 AM ETFord's (F) ability to avert bankruptcy and its recovery are due to its "One Ford" strategy in which it sells the same products globally. However, the policy has had mixed success in China, where GM and VW dominate by selling cars that cater to local tastes. One problem is that Ford's cars are expensive, although the company is developing a "Value B" sub-$10,000 compact. Still, Ford's David Schoch worries that the company isn't moving fast enough.
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Anyway Ford's global product development centers are not just entrenched in Dearborn Michigan, working with blinders on and forcing American tastes on the Asians; they are also in Europe, Mexico, South America, and yes even in India and China. The global expertise is highly diverse, and they know a thing or two about what the local folks want, although they certainly have some catching up to do in terms of production capacity.
It is not about selling "the same products globally". Ford has reduced the number of Platforms, but not the number of Products, per se.
As an example, while Ford discontinued the very outdated American Ranger platform, which also underpinned the Bronco II and then the original Explorer over 20 years ago, the new "Global" Ranger (not available in the US) is much more suited to folks in South America, Asia, Australia, Africa, etc.; rather than the US F-Series or the old Ranger.
Ford also sells a wonderful B-Max minivan and EcoSport utility (based on the B-segment Fiesta) abroad, whereas the US gets the slightly larger, but similar looking, Focus-based C-Segment C-Max and Escape. The even larger C/D-segment Fusion/Mondeo-based S-Max, Edge, and Galaxy vans, wagons, and utilities are yet to be shown, and of course the D-segment Taurus-based Flex and Explorer are out there. The Mustang remains on its own unique specialty platform, and the F-Series and Expedition share a truck platform.
Ford has reduced the Platforms from around 20 globally, to something like 8 now, and the goal is to get down to around 6. Two unique platforms were "let go" in just the last year or so: the Ranger and the Crown Vic. But at the same time, the number of unique bodies on each of the remaining platforms is dramatically increasing, more than doubling.
The sale from Daimler to Cerberus happened long before the bankruptcy.
It appears you have not done your homework.
Ford took $5.9B and has yet to have paid back a cent
http://onforb.es/POf2oi
"Ford took $5.9B and has yet to have paid back a cent"
False. According to the 3Q12 SEC 10Q Report, Ford made a $148M installment payment in September on the DOE loans, and another $591 is due by next September.
http://bit.ly/Qe5NiN
"It appears you have not done your homework."
The difference between Ford and GM/Chrysler is that Ford will pay back every cent of the $5.9B owed to the taxpayers, plus considerable interest, while GM/Chrysler will leave the taxpayers holding the bag for many billions in unpaid pre-bankruptcy loans, along with shares that are worth about a third of what they need to be to just break even on that portion of the bailout.
I ended up being sold on the 2013 Hyundai Sport. I think Ford has come a long way, but the new Escape is not quite spacious enough and the Taurus/Focus/Lincoln collection are nice, but in not comparable to the Hyundai Genesis.
The GM products were lackluster at my price point. Chrysler/Fiat/Jeep was styled a bit better, but I have always had problems with the reliability, fit and finish on that brand.
Just my opinion. And no reason to buy any securities of the above.
So were the profits realized in Detroit because GM Cn is a joint venture primarily between GM and SAIC (Shanghai Automotive Industry Corporation) a separate corporate identity.
Whether you can bring the profit back may not be important in the short term as long as it is recorded in the global financial statement and this is what the stock investors look for. GM USA has not been doing good, but China's joint venture is.
Both Alan Mulally and Bill Ford freely admit that they were really lucky to have closed on that $23.5B "home improvement loan" (to go along with the $5.9B DOE fuel efficiency loan), shortly before the banks and commercial lenders started collapsing under the weight of bad sub-prime mortgages.
GM and Chrysler may have both been just fine if they had done the same thing in the same time frame.
By the way - Ford has paid off that $23.5B bank debt, with interest.
What the Democrats did, right or wrong, was to ensure that one particular union kept their pensions, but many other unions that represented thousands of employees were wiped out. I'm not sure that it was any more favorable either way since the money was taken from bond holders in order to fund the Union bailout. Bond holders might seem like a wealthy class, but they also represent retirement accounts of millions of Americans.
Republicans, including Romney, thought the US auto companies should go through a proper legal bankruptcy, should the direct emergency TARP loans, and any hypothetical subsequent indirect government-backed commercial loans, could not result in the businesses continuing as Going Concerns.
GM and Chrysler only wanted simple access to commercial loans (such as Ford received), except backed with government guarantees, to tide them over through the Great Recession, giving them time to restructure and return to profitability. Nothing unusual there.
GM and Chrysler even attempted to merge with Ford as a sort of New American Motors Company. But Ford wanted no part of that unless the government was going to guarantee billions more in commercial loans with substantially all the GM and Chrysler assets as security, and unless the government would allow Ford to take full charge in managing the businesses, and to quickly restructure and resize the US automotive production base as needed to return the conglomerate to profitability, with the prospect of spinning off redundant brands later.
But that was unacceptable to The Regime. Instead, The Regime unjustly fired the CEOs (two at GM), forced the businesses against their wishes into an unprecedented "quick-rinse" bankruptcy where previous debt holders and shareholders lost everything, and sold Chrysler out to Fiat on the cheap.
And Chrysler profits are now bailing out Fiat in Europe, rather than profiting American shareholders.
Unfortunately for them, the Republican politicians (especially Romney and the usual talking heads) were unable to properly elucidate and explain their Party's position, and the proper Conservative (and Tea Party) platforms, in dealing with a de-facto bankrupt GM and Chrysler in a proper Free Market Capital economy; and they paid dearly for it (and still do).
Well, I hope you had a nice holiday, and have a nice weekend and maybe next week we can get Ford moving in the right direction. I'll turn my charts upside down and you keep giving us the numbers - something has got to work!
But the US Treasury pumped hundreds of billions of TARP dollars into the banks, along with QE and QE2, with the intention of freeing up credit for "worthy" businesses like GM and Chrysler.
The Government and the Fed could have easily backed, guaranteed, and provided the funds for a few tens of billions in short to medium term loans to GM and Chrysler, through a consortium of lenders, at low rates. Which would have provided GM and Chrysler with emergency financing in lieu of the ghastly quick rinse bankruptcy, where shareholders and certain disfavored stakeholders were left with nothing, and the taxpayers were left with tens of billions in permanent losses for GM and Chrysler loans that predated bankruptcy (and the potential losses in the remaining Treasury-owned shares).
Government-backed commercial loans under TARP should have given GM and Chrysler sufficient operating funds to weather the recession and return to profitability, just as Ford did, with only a small advantage over Ford's loans which were without government backing, but rather secured by the "Blue Oval" itself, along with substantially all assets and shares.
The Big C is doing well - of course they got some offshore management that obviously knows how to run a car company.
""Ford did, with only a small advantage over Ford's loans which were without government backing, but rather secured by the "Blue Oval" itself, along with substantially all assets and shares.""
You can always tell who took "Creative Writing" and did well in it. Ford would have taken the bailout, but it had already used every nut and bolt it owned to secure loans from the banks just before the fall. There were no assets left to pledge or offer up for a bailout. You take the assets again you crushed the banks.
Ford took money to retool and redesign and from my perspective they did a nice job. But they have the same people building the cars they had before. Show me a union who makes the first order of business building better products instead of selfish gain and I'll show you a union that doesn't exist here in the states.
I'm just a guy who likes to put his blunt opinion on the table. And if I point out a number of problems, as I see them, maybe my frustrated negative observations are correct.
Every time Ford comes out with good news on Monday you can expect bad news on Friday. That's not my problem it's theirs. See the latest recall announcement from Ford over the weekend. Yeah, now we got cars that are catching fire. I better sell me Pinto.
And I was listening to the theme song from Dr. No when I read your reply - now is that ironic or what?
When you get a chance add something of value... ;-)