UPDATE: FEB 2nd 2009 NEW YORK (MarketWatch) — Barclays Capital cut its rating on shares of Ford Motor Co. to underweight Monday, citing cash concerns and deteriorating international business. In a note, analyst Brian Johnson pointed to worries that Ford could require government assistance late this year. Barclays also lowered its price target on Ford to $1. Shares of Ford were lately down about 2% to $1.83.
There is no doubt this will be a TERRIBLE quarter for Ford Co. (F). They could lose $3 Billion which would get them close to $7 Billion in losses for 2008. They turned down the Treasury for Billions but did get approved for $9 Billion line of credit in case the industry crisis deepens. These results will show whether or not Ford (F) can pull through this storm.
Now the Billion dollar question. Should we let the autos including (F) fail?
If we bailout the company we are putting a band-aid on a gunshot in my opinion. Don’t get me wrong I am a Ford guy and plan on purchasing a 2009 F-150 but there is alot at stake here. You either let them fail now and start healing or we pay for it big down the road. I am not taking the loss of jobs and income lightly but if I screw up my company the Government will not be here handing me any cash. I assure you someone will come along and build up another auto company and run it right. These maniacs should have had their business retooled years ago. Don’t you agree we should let the markets sort through this all on its own?
On Monday President Obama directed the Federal Department of Transportation to tighten fuel-efficiency standards. Why is the Federal government mandating any type fuel standard? Why not let consumers determine what type of vehicles they want and then let the auto companies make products to satisfy consumers? How about getting the various units of government (federal, local, and state) to start buying only high mileage cars/trucks/suvs, all made in the USA, by American workers. If the big goal is to reduce its dependency on fossile fuels then just change the current federal gasoline tax. They use these higher taxes in Europe and F and GM are doing extremely well.
OK, OK, OK, maybe raising taxes while the economy is in the tank isn’t the best idea. A problem that will exist is when the economy turns and we head back to $3+ gas the effects of “Helicopter” Ben Bernanke’s $Trillion$ dollar printing press will push us dangerously close to the edge.
Wait, doesn’t Ford (F) make the EDGE?
Until we get more people buying the high MPG models, it makes no
sense for the automakers to build more of them.
The domestic auto industry did not create the credit crisis and the economic contraction that followed. The auto companies did not create a tax system that allows foreign competitors to subsidize the vehicles they export to the USA but prohibits a similar subsidy on our exports. They did not create an energy policy (or lack there of) that made the USA dependent on foreign oil rather than exploiting our own resources,
So to say that the domestic auto industry is total y responsible for the current contraction in WORLDWIDE demand for automobiles is myopic. The auto industry is a major engine of prosperity in our economic system and is a creator of wealth. Allowing Ford or GM to collapse would plunge the US into a depression on the scale of the 1930′s.
So, bad as things are currently, the industry should not be forced to fail. There are things that need to be resolved to improve competitiveness and minimize the market distorting influence of government.
Take that 25 billion and put it towards helping all the people who are going to lose their jobs. Bailing them out will save jobs in the short term but be detrimental to the industry in the long term. What they need is bankruptcy and then a massive restructuring. Adaptation and evolution will make the WHOLE American auto industry stronger. Giving them free government handouts as we are will destroy them.
Ford’s CEO earns 28M in 4 month…wtf?
28,000,000 for 4 months on the job, let’s do the math.
28,000,000/4 = 7,000,000,000 a month
7,000,000 mo / 4 weeks = 1,750,000 week
1,750,000 week / 5 days = 350,000/day
let’s just assume he’s a hard worker and puts in 10 hour days (highly doubtful)
$35,000/hour
Source:
http://money.cnn.com/2007/04/05/news/companies/ford_execpay/index.htm?cnn=yes
does this make sense to you?