What About Ford?by Tim Manni
You’ve heard about the possible merger of GM and Chrysler, and their impending bankruptcy by 2009 if no financial action is taken, but what about the other Detroit automaker — how is Ford making due, what does their future hold?
Ford says they can weather the financial storm on their own, without government assistance, without help from a merger:
Ford is gearing up for a new-product blitz that will replace 40 percent of its production with fresh models by next year. And the company — sandwiched between the bigger G.M. and the smaller Chrysler in Detroit’s traditional Big Three — hopes to take advantage of the potential merger of its rivals and the distractions that come with it.
Despite losing $8.6 billion in the first half of this year, Ford took advantage of Federal lending before the credit crisis kicked into full gear:
Ford also borrowed heavily to improve its cash position before the credit markets collapsed. At the end of June, Ford had $26.6 billion in cash while the much larger G.M. held $21 billion.
Ford’s “bread and butter,” the F-150 pickup, has seen its sales diminish by 27% this year, yet still remains the top-selling vehicle in the U.S., according to the New York Times. With economic conditions declining as the days go on, Ford can continue to expect weak sales, yet has prepared with additional production of mid-size and fuel-efficient vehicles. No matter which company, the next year or so will continue to be a struggle for every automaker.