Chapter 11 for Ford ?

HighPlainsDrifter · #1 (**permalink**) 03-11-2003, 09:45 AM

Ford in trouble?
I just caught the end of a talk show saying Ford's cashflow was in trouble. Can anyone shed some light on this? Their trucks are good, but the car line is old and the new Focus is too tinny.

Perry.

Excaliber · #2 (**permalink**) 03-11-2003, 10:23 AM

Say it aint so! Impossible to imagine Ford going away. They may re-group at worst.

Ernie

Cal Metal · #3 (**permalink**) 03-11-2003, 10:41 AM

S & P did affirm their bond rating but they are bordering on junk status. James Grant who runs the "Interest Rate Observer" has been negative on Ford and thinks the major rating agencies, such as S & P, would have downgraded them had their name not been Ford. The problem with Ford, and many of the other auto companies for that matter, is not so much product related, but their escalating pension/health care liabilities, which are in the billions.

Carroll DeWeese · #4 (**permalink**) 03-11-2003, 10:45 AM

I did not see this thread and I just posted a thread on Ford and possible bankrupt status. It is a article from Forbes magazine. Check out my thread for lots of detail on this topic.

mr bruce · #5 (**permalink**) 03-11-2003, 11:39 AM

If you think the auto companys have a lot of pension debt, take a look at government workers pension debt,state, federal and even your local govt. This country is in BIG trouble!

HighPlainsDrifter · #6 (**permalink**) 03-11-2003, 12:06 PM

Thanks Carroll, good article.
Perry.

gsharapa · #7 (**permalink**) 03-12-2003, 07:11 AM

Keep in mind the pension problem is a result of Ford stock, like all stock, being low at $7.00 a share. Ford steered off course out of their core business (Thank you Mr. Nasser) which cost tons! However, Ford does has $ 26 Billion in cash right now and has been taking tons of expense out of the company. If the US could get past this Irac war and the economy would turn they would start selling vehicles at a hgher rate and recover faster. They actually are a head of schedule on their recovery plan. The new F Series pickup (due in June) is awesome and many more exciting products coming, like the 95 Mustang due next spring. I personally beleive the biggest concern most of these companies have, like the airlines, is the news media scaring the heck out of everyone most every day! Ford will be back and if you any cash laying around, it's a pretty good buy at $ 6.80!!!!!!When it takes off it will jump fast.......

4RE KLR · #8 (**permalink**) 03-12-2003, 07:57 AM

Gary,
Amen on the news & media. I wish they'd just shut the Heck up.

I was listening the other day and this NUT said he based his economic stratigy for "THIS COUNTRY" on how many people were in the line in front of him at the Krispy Kream store. What a frikking idiot! The whole country listens to this kind of Crap and doesn't invest in the economy because some moron gets to the Krispy Kream store only to find two people there on any given day, at the same time. I forget who it was who said this, but if my memory serves me it was one of our national economic stratigest.

Cal,
I know you heard this same remark, who was it that made that remark?

People if we do not reinvest in our own economy we all suffer, go out today and buy something for goodness sake, ANYTHING!

jhaynie · #9 (**permalink**) 03-12-2003, 02:41 PM

I can promise you that if DELTA is still flying, along with the other airlines that suffered after 9/11 and fare wars of the last ten years, Ford is going nowhere. The taxpayers may have to bail them out and Mr Ford work for $1.00 per year (ala Lee Iocca/Chrystler), but they are too big and employ too many people for them to suffer too long before the government (and our GNP) start to notice.

Satanpez · #10 (**permalink**) 03-12-2003, 02:51 PM

I thought Ford didn't take a salary last year. Am I wrong on that? (I was pretty sure he kept stock options)

-steve in nj-

(Edited, I wrote stop options instead of stock)

pderouss · #11 (**permalink**) 03-12-2003, 03:21 PM

Santapez.

You are right. His salary is Zero and, like all Ford's senior management, he received no bonuses this year or last. IMHO if more US CEOs had been similarly driven by a desire to do what is right for their companies rather than just lining their own pockets the whole world economy would be in a better state today.

aumoore · #12 (**permalink**) 03-12-2003, 07:11 PM

Quote:

Originally posted by jhaynie

I can promise you that if DELTA is still flying, along with the other airlines that suffered after 9/11 and fare wars of the last ten years, Ford is going nowhere. The taxpayers may have to bail them out and Mr Ford work for $1.00 per year (ala Lee Iocca/Chrystler), but they are too big and employ too many people for them to suffer too long before the government (and our GNP) start to notice.

Jhaynie
I agree to what you are saying but I wonder where the Government was when all the textile mills got shipped abroad? Paper Mills are not far behind and I just read a report where a lot of Hi-Tech jobs(accountants, engineers, architects etc) are now being e-mailed to other countries where the pay scale is 8 to12000/year vs $50000 and up in the States. This will not stop until someone figures a way to get politics done overseas....come to think of it we have that now with the U.N.

Do I own foreign products yes but I do try to make a pro American buying decision when I buy products. I figure that if I buy from Americans they might return the favor. If you buy a car made in Korea do you really think they will drop by your shop and buy your product or service?

I own the following vehicles
2001 F150 Supercrew(bought new)
1999 Nissan Quest Van(bought new and assembled in the states with half the parts stamped ford...engine and tranny is Nissan)
1996 V6 Mustang(bought used) sons car
1993 Mazda MX(true Jap car, bought used) At least ford owns most of Mazda
2001 ASP(what the hell is that? In Florida they issue a "assembled from parts" VIN to kit cars.
1998 Murry lawn mower

Now if I can find some real american clothing.

My big fear is that one day we will all be just consumers, marketers, service techs, doctors and lawyers with no manufacturing base. Remember without a manufacturing base we all might be speaking German or Japaneese right now or maybe not be here at all.

excuse me while I step off my soapbox.

kobrabob · #13 (**permalink**) 03-12-2003, 09:46 PM

Ford is here to stay. If their automotive division is suffering, their financing arm more than makes up for it. In fact, Ford's financing division makes more profit than all others.

Another reason Ford isn't going anywhere is that Bush, or any intelligent Republican president, would not dare give up the infrastructure Ford has and it's military capabilities. Remember that 's why we bailed out Chrysler and old Lee. Not to save American jobs.

During WWII, all American auto manufacturers switched gears and started producing war machines. And it just so happens that we are at war. I know tht most of the country still says that we may be going to war but it's not so, we haven't found the last of the bastards responsible for 9-11. Until we do, we are at war. Iraq is just another battle.

Just a side note; my ex-wife's (pitooey) birthday is, guess what, Sept 11th. I laugh every time I think about it.

Getting back to Ford, it wouldn't take much to outfit Excursions with a machine gun and maybe some armor and you have a ready made tank.

Put a couple of wings on the GT40, paint it black and you got a low flying stealth machine.

I'm sure you guys can think of many other alternate uses for Ford vehicles.

bob

jhaynie · #14 (**permalink**) 03-13-2003, 06:57 AM

Aumoore,

A lot of textile mills in our area of the country closed. The paper mills are still open but face more competition. The airlines, on the other hand, have no viable foreign competition and are serving the direct end user. Now I would bet that most of the supplies the airlines are using are imported.

John

Zderf · #15 (**permalink**) 03-13-2003, 07:50 AM

Having been in the airline support business my whole life, I can assure you that the majority of the operating expense for our domestic air carriers is "domestic" in origin.

It might go something like this:
-Fuel (this would be more domestic if we could drill for oil)
-Labor (domestic)
-Direct Aircraft Maintenance (not much foreign content on Boeing and Douglas types, much more of course on Airbus and the growing fleets of regional aircraft) Still mostly domestic content.
-Contract maintenance (mostly domestic suppliers, but for N registered aircraft operating abroad, some foreign repair station support using domestic parts if Boeing or Douglas)
-Consumable supplies (mostly domestic, no Chinese toilet paper yet)
-Food/drink (foreign beer maybe, but Jimmy Carter peanuts)

We haven't seen anything yet. The commercial air transport system is changed forever. This is not a cycle, but a new reality...... Our old major airlines simply do not have the culture that will allow them to face the new realities and do something today to change it. On the other hand, Jet Blue, Southwest, AirTran, Frontier, and HOOTERS have the culture that will allow them to quickly recognize needed changes and implement them.

GM, Ford, and Daimler Chrysler are no different. But their advantage is that vehicle travel is somewhat less discretionary than air travel, and the terrorists haven't figure out how to fly them into sky scrapers.

Be absolutely certain, that is our air transport system continues to melt down, everyone's lives will change to some degree. And sans competition, air fares will eventually follow the escalation curves enjoyed in the insurance industry. You'll need your Cobras, as they will be far more economical for transcontinental travel than by air.

Regrets....

Zderf

Cal Metal · #16 (**permalink**) 03-13-2003, 08:04 AM

Steve:

Roseanne Barr?

4RE KLR · #17 (**permalink**) 03-13-2003, 08:27 AM

Cal,

No I am serious. This statemant was made by one of our political economist in Washington. I am totally serious on this. I could not believe he made such a stupid statement.

One does not run the economic statigies of a country based on how many people are in the line at Krispy Kream on Saturday morning.!

Turk · #18 (**permalink**) 03-13-2003, 08:54 AM

If they can offer round trips fares from NY to London for $250.00, and San Francisco to Boston for $229.00 due to excess capacity and under the pretense of being competetive...they SHOULD go out of business.

Who in here can't get a flight to where they want to go because all the seats are gone? That's what I thought.

Airlines have done it to themselves. It will all settle down with supply and demand. There will be less of them flying, and prices will go up.
I never felt $49.99 each way was the right price to go anywhere on an airliner. You couldn't walk there for that amount.

We have been spoiled with unrealistic low fares while the Airlines beat each other into black and blue.
9/11 did not help but it also gave them the excuse they needed.

They want my tax money to help them so they can offer another businessman and his company a $69.00 fare to somewhere.

TURK

coyled · #19 (**permalink**) 03-13-2003, 09:11 AM

If the cost of air travel goes up, less people will fly. Who really needs to fly anyways. Its a luxury. Company's like southwest will continue to figure it out, and thus prices will continue to be reasonable. The automakers are in a box. There fixed costs of labor, pension and benefits are way to high. Unless they have volume, they will continue to loose money. How long is zero down, zero payments for 90 days going to last. And, you can't borrow your way out of debt. A chapter 11 would force a renegotiation of these costs that won't happen otherwise. Ask United how it works. Bottom line is that old cost structures don't work anymore. scott

M & M · #20 (**permalink**) 03-13-2003, 09:20 AM

Turk,

You took the words are right out of my mouth. I have been saying this for years about the airlines.

The poor management of the big US corporations are driving me crazy. I say this in broad terms because there are a few "who get it." Most are run with self served and missguided goals. I will smile the day some of these a$$'s are in jail. I will smile even more when the workers those executives screwed are compensated back for what they have lost.

I can't tell you how many times I herd Mr. Jac Nasser speak of "shareholder equity" and "shareholder value." Well how's the value now Mr. Jac? Your head was in the toilet. The same place the stock value went on all those diverse companies you bought.

Like some have pointed out, Mr. Ford and others have been volunteering their time to move the Ford Company back to where it should be. If progress is made, they will be rewarded for their efforts.

Be safe,
Mike