Interesting Ford press release on GM BK

[kaisen]

http://media.ford.com/article_display.cfm?article_id=30468

PRESS RELEASE:

FORD STATEMENT ON GM BANKRUPTCY FILING

DEARBORN, Mich., June 1, 2009 – Today's announcement that GM is filing for Chapter 11 bankruptcy is another important development during this unprecedented period for the auto industry and the global economy.

The Ford team continues to monitor the industry environment and plan for all contingencies to ensure our transformation plan remains on track. At this time, we do not expect any major disruptions to our operations as a result of today's news.

We share President Obama's hope that GM's bankruptcy will be controlled and orderly, and we continue to believe it is important that our governmental leaders and the U.S. Automotive Task Force remain focused on the stability of the supply chain and on ensuring that a healthy U.S. auto industry emerges from this difficult economic period. We look forward to working with the Obama administration to ensure that the government's majority ownership of GM will not change the industry's competitive dynamics and that a level playing field will be maintained.

Ford remains absolutely committed to continuing to make progress on our transformation plan without accessing emergency taxpayer assistance from the U.S. government. We have been executing our plan for several years and now gaining market share and new customers with an unprecedented number of new high-quality, fuel-efficient vehicles, such the new Ford Fusion, F-150, Lincoln MKS and Lincoln MKZ. Coming soon are the highly acclaimed Ford Taurus, Lincoln MKT and Transit Connect.


*I added the bold

E

[Zeke]

Hey, no reason not to ride in on the coattails of the daily news with some gratuitous promotion.

[legion]

No, I think the meaning of the text in bold was that Ford worries that GM will be granted some competitive advantages that aren't available to privately owned car companies.

You know, the government is now in the business of picking winners and losers, and more often than not those that did the right thing are being punished (taxed) in order to save (reward) those who did not.

[jyl]

That is a concern for F. Even without any special treatment, GM now has a cheap source of capital. The key for F is it's cars. At the end of the day, if F has good cars it will do okay. And it's competition will be Toyota as much as GM.

[kaisen]

Originally Posted by legion

No, I think the meaning of the text in bold was that Ford worries that GM will be granted some competitive advantages that aren't available to privately owned car companies.

Bingo

[Z-man]

Originally Posted by legion

No, I think the meaning of the text in bold was that Ford worries that GM will be granted some competitive advantages that aren't available to privately owned car companies.

You know, the government is now in the business of picking winners and losers, and more often than not those that did the right thing are being punished (taxed) in order to save (reward) those who did not.

Good analysis.

Still, I think Ford can use this as an excellent marketting opportunity. Who would you rather buy a car from - a car company that is financially on it's own, or a company whose financial future is up in the air?

If Ford can continue to remain out of bankrupcy and produce good quality cars, they may just give the Asian and European car makers a run for their money. I hope they do. There was a time when Toyota and even GM were the kings of the hill. Looks like Ford is quietly moving up a couple of notches while other car makers are taking a few steps down.

-Z

[the]

Wouldn't it be a breach of the Fed govt's fiduciary duty to its constituency (the U.S. people, for whom the Fed Govt holds a 60% ownership interest in GM) for the Govt to buy ANY vehicle for the fed govt fleet that are made by anyone other than GM?

The Fed govt needs to take the steps that are in the best interest of the owners of GM.

That can't be good for Ford.

[Z-man]

Originally Posted by the

Wouldn't it be a breach of the Fed govt's fiduciary duty to its constituency (the U.S. people, for whom the Fed Govt holds a 60% ownership interest in GM) for the Govt to buy ANY vehicle for the fed govt fleet that are made by anyone other than GM?

The Fed govt needs to take the steps that are in the best interest of the owners of GM.

That can't be good for Ford.

Further proof that we aren't as 'democratic' as we once were.

Apologies for bringing politics into this thread....
-Z-man.

[mikester]

It IS an interesting conundrum that our government has gotten itself into.

The whole idea of 'too big to fail' bothers me to no end. If it is possible for a company to be 'too big to fail' then in my opinion - how did our regulatory environment allow a company to become so big that it is too big to fail. That's as bad or worse than allowing a monopoly to exist I think.

take for example our phone companies - cell phones in particular. Survey their prices - I just picked up a new plan for the wife - almost every carrier is withing a dollar or two of each other. There is no competition - it makes me ill.

I can never help but think 'Yugo' when I hear about how our government is propping up these auto companies.

[Shaun @ Tru6]

The PR and marketing departments at Ford must be psyched.

[legion]

Exactly.

Too big to fail is too big.

Any company that is considered too big to fail should have been broken up under existing anti-trust laws decades ago.

***

But as a couter-point, foreign companies will allow their companies to get too big as well and gladly prop them up.

[mikester]

Most foreign companies are in socialist countries - up until recently we were not one of those.

[rick-l]

Originally Posted by mikester

I can never help but think 'Yugo' when I hear about how our government is propping up these auto companies.

I keep thinking Trabbi http://en.wikipedia.org/wiki/Trabant


http://hubpages.com/hub/GMs-New-Communist-Economy-Car-2011-Trabant-2

[Christien]

Ok, I know this isn't PARF, so keep that in mind as I ask, what would you guys who are saying "too big to fail is too big" have said if the Reagan gov't stepped in years ago and said to GM 'you're getting to big, and we have to stop that'. Wouldn't that have been a complete slap in the face to the free market ideal?

I guess what I'm saying (and again, it's not PARF - I'm really trying to be as apolitically as possible, and certainly as bi-partisan as possible) is that the laissez-faire system created this monster, and now must deal with the consequences of that. You can't have it both ways. You either impose limitations and restrictions on size and market dominance, or you deal with the monstrosity that's allowed to grow in the absence of those limitations and restrictions.

[kaisen]

Originally Posted by Christien

I guess what I'm saying (and again, it's not PARF - I'm really trying to be as apolitically as possible, and certainly as bi-partisan as possible) is that the laissez-faire system created this monster, and now must deal with the consequences of that. You can't have it both ways. You either impose limitations and restrictions on size and market dominance, or you deal with the monstrosity that's allowed to grow in the absence of those limitations and restrictions.

When a company gets that big, laissez-faire is an impossible ideal. One way or the other they will answer to socio-political influences.

Perhaps if the government had used $50B to 'socialize' health care several years ago, GM (the nation's largest health care provider) would be in a much different position today.

GM did this to themselves, but it has much less to do with the cars they produce and much more to do with decisions about unions, healthcare, and pensions. Decisions made decades ago when GM was a very strong company.

I'm not sure that the BK proposals do enough to address legacy costs, union contracts, and healthcare costs.

[Shaun @ Tru6]

Originally Posted by kaisen

Perhaps if the government had used $50B to 'socialize' health care several years ago, GM (the nation's largest health care provider) would be in a much different position today.

Health insurance is almost certainly the largest "tax" a company pays in the normal course of business.

Socializing healthcare, removing it from the P&L will dramatically increase corporate profits and spur new growth.

[dad911]

Originally Posted by legion

Exactly.

Too big to fail is too big.

Any company that is considered too big to fail should have been broken up under existing anti-trust laws decades ago.

***

But as a couter-point, foreign companies will allow their companies to get too big as well and gladly prop them up.

So how do you choose?
Break up Microsoft (with 90% of OS market share).... ? What other companies should be carved up?

[dad911]

Originally Posted by the

Wouldn't it be a breach of the Fed govt's fiduciary duty to its constituency (the U.S. people, for whom the Fed Govt holds a 60% ownership interest in GM) for the Govt to buy ANY vehicle for the fed govt fleet that are made by anyone other than GM?

The Fed govt needs to take the steps that are in the best interest of the owners of GM.

That can't be good for Ford.

I agree. Ford will be getting the shaft.

[pwd72s]

One of the reasons I chose Mustang over GM or Chrysler was that Ford did not become a willing ward of the state.

Now that I've driven it a few miles? A warning to most older 911 drivers...beware of the new Mustangs...in a dice you'll be looking at a Mustang rear end. I'm talking BOTH straight line & twisties. Get the latest Car & Driver comparison test...new Camaro SS, Mustang GT, Dodge Challenger. King of the skid pad was the Mustang with it's "antiquated" live rear axle.... .93. 13.5 in the quarter. What's not to love?

[Deschodt]

Originally Posted by pwd72s

King of the skid pad was the Mustang with it's "antiquated" live rear axle.... .93. 13.5 in the quarter. What's not to love?

The hard plastics interior, dash, door, seats, tractor transmission... But other than that, I agree they are impressive... Methinks that just like the Corvette, a $1000 investment in each car to make a more Audi-like interior (to a degree) would reap big time rewards !