Refusing to take Bailout Money, Ford Continues to Stay on TopCatch-All

Times have been tough for the automotive industry over the past few years. While some have resorted to taking government bailouts to stay afloat, there has been one company, in particular, that has changed their business strategy and relied on innovation to push ahead. Ford Motor Company did not take any money from the government, and they have profited from this move by placing more of an emphasis on innovation and marketing. One marketing approach has been their ads, which focus on real Ford owners saying why they have purchased from the company. The below ad features a new F-150 owner, Chris, who purchased his truck for the fact that the company was not bailed out by the government.

His name is Chris. After he sits down the “reporters” bark “Chris, Chris.” One asks him to explain why “was buying American important to you.”
Sitting and looking sincere and serious, Chris says: “I wasn’t going to buy another car that was bailed out by our government. I was going to buy from a manufacturer that’s standing on their own: win, lose, or draw. That’s what America is about is taking the chance to succeed and understanding when you fail that you gotta’ pick yourself up and go back to work. Ford is that company for me.” [Source]

Now, why would I focus on Ford so heavily? Maybe, it is because I am biased. My father was a former Ford mechanic and I drive a Ford, which I love due to obvious reasons. Another reason is that taxpayers will be losing money to the government bailout of GM and Chrysler at the tune of $14 billion, and this is not chunk change by any means. It is not the government’s role to bail businesses or industries out when they are failing, rather it is up to the CEOs of the organizations to refresh their business strategies and focus on new ideas that will appeal to their consumer base.
Cross posted at Crystal Clear Conservative

  • HisRoc

    Good post, Krystle. Chris is far from alone. If we can ever sell our house in Fairfax County, we are planning to re-locate to western Loudoun County and will be in the market for a truck. (I understand that there is a zoning ordnance out there that requires one pick-up truck per family, at least in the western half of the county.) I have already decided to buy a Ford F-150 for exactly these reasons.

  • Steve Vaughan

    Eh. Ford was in a better position to start with, that’s why they didn’t take the bailoout money. So, it stands to reason that they’d be in better shape now. We’ve got a Ford and a Chevy. Pretty happy with both. Bailout won’t end up costing the taxpayers anything close to $14 billion, if it costs them anything at all.

  • HisRoc

    Steve,

    Ford was in a better position because they realized back in the 1980′s that the Japanese were going to eat their lunch of they didn’t change their ways. GM and Chrysler didn’t get that memo.

    Remember, the advertising slogan, “At Ford, Quality is Job One”? The Defense Department did a survey of the commercial manufacturing sector in the late 1980′s on quality assurance, what we call RAM or Reliability, Availability, and Maintainability. We found that Ford had a failure rate of reparable components of about 90 per thousand. Chrysler and GM had a rate of about 250-300 per thousand. Toyota was running about 15 per thousand and Nissan was 5-6 per thousand. Ford understood their competition; Chrysler and GM didn’t.

  • Steve Vaughan

    HR-Okay.
    We’ve discussed this before. I think America’s better off with GM (and Chrysler, though that’s a lesser concern) than without it. So I’ve got no problem with the bailout… certainly find it less offensive than the Wall Street bailouts. Chrysler and GM may have, as you say, shown poor business judgement, hopefully they’ll learn a lesson from it. About half those folks in the financial industry were engaged in fraud and theft and they knew it.

  • Mike Barrett

    Well Krystal, perhaps you have forgotten that the bail out and the subsequent stimulus stopped the nation from going into depression, and while we are now in a period of slow growth, it is, afterall, growth. The so called bail out will essentially be totally repaid, and the stimulus kept citizens working so the economy did not deteriorate. You may even still have a job becasue of the effects of the stimulus, even though republicans find it in their political interest to condemn government intervention to stem fiscal collapse. Your ideology trumps your common sense, and while it is easy to condemn the bail out and the stimulus now that we are growing again, I suspect your own personal financial status, like that of most americans, is better off because of both.

  • HisRoc

    Mike,

    “…perhaps you have forgotten that the bail out and the subsequent stimulus stopped the nation from going into depression..”

    Says who? There are just as many economists who maintain that our slow recovery is caused by the high government debt created by the bail-outs (and ‘stimulus spending’) and the resulting uncertainty about future government taxation policy. And BTW, two UC-Berkeley economists (not exactly a conservative think tank) published a study last year that maintains that FDR’s government spending actually prolonged the Great Depression rather than easing it.

    Talk about ideology trumping common sense…

  • Jamie Jacoby

    I will never own a Chrysler or GM product.

    Mike: It is true, rather, that many Americans who are still unemployed continue in that sad state precisely BECAUSE of all the interventions. Labor is mispriced, assets are mispriced, raw materials are mispriced. Not only is capital mispriced due to Fed printing and artificial interest rates, but it is subject to being destroyed by government action, such as the government’s smash and grab of Chrysler. The Chrysler Senior Secured Bondholders were smashed, then the company was grabbed and given to a political supporter: UAW. How much of this money got recycled into Obama contributions? After all, the union army is ready to march, right? That is why capital has gone into hiding. I know that socialists don’t understand how economies work; that is exactly why ours is in such a funk and cannot seem to recover.

    Mispricing of assets makes everyone who still has money hesitate to buy them and put them back into play. The economy shuts down, just as it is right now. Long term, Mike, we are all worse off because of the bailouts. They make things worse, not better. They delay the inevitable, and make the pain, when it finally does come, much more unbearable. Keynesians, and increasingly the MSM, blame the Tea Party. Let’s do another poll and show how it’s the Tea Parties’ fault, and then we can get back to printing and deficit spending.

    This government is deliberately destroying what’s left of the economy with a series of carefully constructed moves intended to send messages: business is not welcome here.

    Steve: I, too, find the Wall Street bailouts to be offensive. I would use stronger words than that. What can we do about it? What are our elected officials, either D or R, doing about it? Seems to be nothing at all. There is ample and public evidence of wrongdoing; the vaunted regulators are silent, as is Congress.

    The economy is not a pump that needs priming. It needs to have its productive forces unleashed. And the only way to do that is to get government out of the way.

  • Jamie Jacoby

    Mike: please read Mises’ excellent “Economic Calculation In The Socialist Commonwealth” for a brief explanation of what happens when price signals are thwarted by government intervention. It is available online free, and is short enough even for the economically challenged.

  • Steve Vaughan

    HR-while we can debate the effectiveness of the stimulus, or the auto bailouts, in helping the economy to recover…there’s not too much doubt among serious people that TARP..the last piece of legislation passed in this country negotiated in genuine partisan good faith…forestalled a depression.

  • Tim J

    “TARP..the last piece of legislation passed in this country negotiated in genuine partisan good faith…forestalled a depression.”… We keep on hearing that from the faithful, but what is your definition of a “depression”? Could it be when the riots begin and martial law is declared?
    http://www.nydailynews.com/ny_local/2011/09/16/2011-09-16_mayor_bloomberg_predicts_riots_in_the_streets_if_economy_doesnt_create_more_jobs.html

  • HisRoc

    Steve,

    Agree. TARP was necessary to provide relief and restitution for criminal activities and I have never criticized it. Government Motors and the Porkulus Bill were totally different matters. MB and the other Ocarter apologists would want us to believe that, despite TARP, the country was plunging into a depression when the Democrats increased the national debt by $1.5T. Those assertions are not supported by the facts in evidence.

  • jamie jacoby

    “there’s not too much doubt among serious people that TARP..the last piece of legislation passed in this country negotiated in genuine partisan good faith..forestalled a depression.”

    It would have gone further towards that end if it had been given directly to people to pay down their mortgages (not that I am advocating that). Instead, $a8 Billion of it was given to AIGFP so that AIGFP could pay off Goldman’s otherwise-worthless credit default swaps at 100 cents on the dollar, and then so that Goldman could pay out $11 Billion in bonuses. Winner! In 2008, Goldman’s total lobbying bill was about $3 Million, making their lobbying ROI an astounding 3600X! Winner!

    BTW, according to opensecrets.org, Goldman has apparently already picked another winner, having already given $290,000 to Mitt Romney, some six times more than they’ve given Obama. Should I mention the $15,000 to Cantor, whose efforts were instrumental in passing TARP? Cantor is the tenth highest recipient, according to opensecrets. Winner!

    Who says government can’t pick winners? And even if that isn’t relevant to you, what good is forestalling a depression if it is going to come anyway? Why send good money after bad, making the actual collapse, when it happens, that much worse? Are you familiar with the studies that have shown that FDRs vaunted depression-era programs merely prolonged the agony?

    Has ANYTHING been fixed? Have any actual market conditions been improved? Have any of the conditions that caused the crisis been corrected or made better? Has anything actually changed, or are we still in a holding pattern waiting for the inevitable?

    Hisroc: “TARP was necessary to provide relief and restitution for criminal activities and I have never criticized it.”

    TARP itself was a criminal act and an attempt to cover up other criminal acts (fraudulent lending, misrepresentation of credit quality of financial instruments, “that Timberwolf was one shitty deal”, “We knew that 60% of the loans were fraudulent,” etc etc).

    It’s truly shocking, given the revelations of fact over the past few years of the banks’ overt criminality, that anyone continues to support TARP. If anyone wants a list, please let me know.

  • HisRoc

    Jamie,

    We will let you know. In the meanwhile, please be sure to hold your breath.

  • William Bailey

    Maybe Ford didn’t take the money because they closed the #1 F150 truck plant in the world and moved those jobs to Mexico spending billions to build a new plant. So much for American workers…

    But it is good to see you all support Ford’s UAW workers and still by “union” goods…

  • Tim J

    Sounds like a prudent business decision instead of choosing ownership and control by the US Government. Ford is also building a $2B plant in India which means thousands of jobs over there in addition to no unions and US Govt regulations. Just took delivery today of a new F-250 “dualie” diesel to pull my 5th wheel and I feel like I must be in redneck heaven!

  • http://tidewaterliberty.com Britt Howard

    Remember, Ford already HAD it’s financial crisis before GM and Chrysler. Their adjustments were obviously better that Government Motors and Fiat/Chrysler. Fiat……it kinda reminds me of our currency. The not so almighty dollar.

    I used to be Chrysler all the way. Mopar! Not anymore. I bought a 2011 FORD Fiesta. It does get 40 mpg as advertised btw. Yes, it was built in Mexico. I have no problem with that. I do have a problem with the bailout car companies. I won’t buy from them. I would buy a Japanese or Korean car first.

    I am proud to have bought my first brand new Ford vehicle. The bailout had a huge effect on the consumer’s perception of GM/Chrysler. Anyone thinking otherwise is kidding themselves.

  • https://www.facebook.com/pages/Draft-Bob-McDonnell-for-President-in-2012/182559595128064 James “turbo” Cohen

    Ford is recovering because the family and the board of directors vetted proven world class executive talent before voting him in. A company can only be as good as its CEO when the chips are down. Ford had multiple issues to face but they had a ginormous retiree and healthcare issue as did all of the big 3. Bill Ford was shrewd to turn over control when he did for the betterment of the company to a proven executive from Boeing who knew where to find the people needed to make the numbers work and had the trust of major lenders. Alan Mulally treated the company to a false bankruptcy and cut the waste and inefficiency that normally does not get cut until after a bankruptcy. (They did this to protect their investors and to restrain white and blue collar abuses, William.. The UAW did not screw Ford alone in alkl fairness.) In the end it provided enough comfort to enough lenders and intitutional investors and the rest is recent history. More jobs will leave the unionized locales because thugs never quit.. But, Ford will prevail because the excecutive has the leeway to act in the stockholders best interests.

    America needs this caliber of leadership in the public sector but still none of the candidates come anywhere close to this dude.. A book should be written.

    The man is to CEO talent what Bob McDonnell is to our state and that makes all the difference.

  • Greg McKay

    Im proud to drive a Ford they have shown they can stand tough times without a handout.

  • Jamie Jacoby

    HisRoc:

    You guys are on the wrong side of history, trapped in your once-comfortable paradigm which is shattering before your disbelieving eyes. Everything the establishment politicians and corrupt banksters do is OK with you as long as its goal is the preservation of the status quo with which you are familiar and within which you have operated for your entire lives. It’s really quite a sad spectacle.

    Ron Paul has won the California Republican straw poll. News anywhere of this? Nope, let’s hide this troublesome fact. Fox this morning is all about the Florida event and how it is the one that matters. “I can’t hear you I can’t hear you.”

    According to UK’s Financial Times:

    “Globally, central banks are set to buy more gold this year than at any time since the collapse of the Bretton Woods system 40 years ago – the last time the value of the dollar was linked to gold.”

    “We’re going back to a time when gold is seen very much as money,” Jonathan Spall, director of precious metals sales at Barclays Capital, told FT.com in a video interview. “It has been a complete reversal of the attitudes we saw during the 1990s.”

    The evidence of deep and radical change, a reversion to a genuine free market and a rebirth of genuine liberty, is mounting and is all around you, yet you guys stuff your fingers in your ears and shout “I can’t hear you I can’t hear you” while you cheer for establishment candidates and status-quo policies that anyone with their eyes open can see have totally failed. “More of the Same, Please! We’re sure it’ll work this time!”

    Adults should embrace reality. You guys, not so much.

  • Mike Barrett

    So James, are you suggesting that the key to executive action is to borrow to the hilt, raise tuition and fees at colleges and universities, cut payments to local government, allow the state’s infrastructure to deteriorate without propert maintenance and repair, and to focus instead on new regulations to fix problems that don’t exist? Frankly, in the private sector, he wouldn’t last long at all.

  • Jamie Jacoby

    Bill Black (of S&L Crisis fame) just did an interview with Jim Puplava of FinancialSense. The article is titled “Why Nobody Went To Jail During The Credit Crisis:

    “The Savings & Loan crisis was a tragedy in two parts. First part was not fraud, it was interest rate risk. But the second phase, which was vastly more expensive, was to defraud and the National Commission that looked into the causes of the crisis said that the typical large failure fraud was invariably present. And there were real regulators then. Our agency filed well over 10,000 criminal referrals that resulted in over 1,000 felony convictions and cases designated as nature. And even that understates the grade in which we went after the elite. Because we worked very closely with the FBI and the Justice Department, to prioritize cases—creating the top 100 list of the 100 worst institutions which translated into about 600 or 700 executives—and so the bulk of those thousand felony convictions were the worst fraud, the most elite frauds.

    In the current crisis, of course they appointed anti-regulators. And this crisis goes back well before 2007 and of course it is continuing, it does not end at 2009. So the FBI warned in open testimony in the House of Representatives, in September 2004—we are now talking seven years ago—that there was an epidemic of mortgage fraud, their words, and they predicted that it would cause a financial crisis, crisis being their word, if it were not contained. Well no one thinks that it was contained.

    All right so you have massive fraud driving this crisis, hyperinflating the bubble, an FBI warning and how many criminal referrals did the same agency do, in this crisis. Remember it did well over 10,000 in the prior crisis. Well the answer is zero. They completely shut down making criminal referrals and whichever administration you hate the most, you can hate because while most of this certainly occurred in the Bush Administration, the Obama Administration has obviously not changed it. Obviously did not see it as a priority to prosecute these elite criminals who caused this devastating injury.”

  • Tim J

    Of course they stopped the “criminal referrals”. If they had continued, there would be no campaign donors left.

  • John Madison

    Actually this article is NOT TRUE. Ford took 5.9 billion (Billion) from the Department of Energy under the guise of the “cash for clunkers” bill. This was to re-tool their plants in Illinois, Kentucky, Michigan, Ohio to make more fuel efficient cars.
    A loan they’ve not paid back as of April 11th, 2012.
    I appreciate Ford however let’s keep the FACTS STRAIGHT.

  • http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-on-bailouts/ Your mom

    read the article: http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-on-bailouts/

    then talk about ford not taking bailouts