WSJ has a great report on how Ford Motor Co., who has been trying to do the right things to trim costs, take care of its labor force, and not take a financial bailout, is facing serious consequences if Chrysler and GM declare bankruptcy, as President Obama is suggesting.
A bankruptcy reorganization by either General Motors Corp. or Chrysler LLC — as suggested by President Barack Obama this week — could damage the networks of suppliers and dealers shared by Detroit’s three auto makers, throwing uncertainty into Ford’s parts deliveries and its retail operation.
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Ford, which is trying to engineer a turnaround on its own, has already reached agreements with its union to reduce wages and restructure retiree health care costs. It also offered bondholders a deal to shed some debt. The company has said the steps will put it in a better position than competitors to ride out the recession.
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“I think the Obama announcement is a near-term depressant on auto sales and the economy,” said one Ford official Tuesday. “It introduces uncertainty and confusion among most consumers. And it’s the uncertainty that’s driving consumers into the cave.”To reassure jittery customers, Ford on Tuesday introduced a plan that will cover car payments for up to a year if a customer loses his or her job. Under the program, Ford also is offering 0% financing on some vehicles. The job-protection program started at Hyundai Motor Co. and was quickly matched Tuesday by GM.
To be sure, Ford has been able to move much further and faster in trimming costs and debt than its two domestic competitors, which are propped up by $17.4 billion in U.S. loans approved in December. And it also has started to see some promising sales trends, with more consumers gravitating from the other car makers toward Ford’s vehicles.
Folks…this is why centrally-planned economies are bad! Here’s a company doing all the right things getting punished because the government intervened. All I can say is “BUY FORD!!!”
