Detroit: How Ford Might Overtake GM and Chrysler | Newsweek Voices - Keith Naughton

Can Ford Pull Ahead?

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Mulally didn't sound any death knells for his company. On the contrary, he suggested Ford just wants a federal backstop—"$9 billion in bridge financing, something we hope we will not need to use." After all, he notes, Ford is not running out of cash and was actually making money earlier this year before gas prices spiked and credit collapsed. He figures Ford has the wherewithal to make it to 2010, when new small cars and electric vehicles arrive and labor savings kick in. By 2011, he predicts the red ink will stop flowing and Ford will be breaking even or back in the black.

Global Insight's Wolkonowicz isn't so sure Mulally won't need the government's money to help finance Ford's turnaround. He says Ford will be forced to dip into its federal loan because car sales won't rev up as much in 2009 as Mulally expects. "They're going to need to tap into that money by the middle of next year," predicts Wolkonowicz.

Economist Mark Zandi of Moody's Economy.com told the Senate panel Thursday that all three automakers are being overly optimistic with their $34 billion request, which is up from $25 billion two weeks ago. (GM is asking for $18 billion, Ford $9 billion and Chrysler $7 billion). Zandi figures the cost to save all three could run from $75 billion to $125 billion and predicted they will be back asking for more by next fall.

Mulally, though, has a powerful incentive to live up to his pledge not to touch Ford's federal line of credit. He promised to work for $1 a year—but only if Ford is forced to tap into that $9 billion loan. Otherwise, he can continue to be handsomely compensated (2007 take-home: $21.7 million). And as we learned from his testimony two weeks ago, Mulally is not eager to become a buck-a-year man. "I think I'm OK where I am," he said then. Now, he's willing to sacrifice, but only if Ford falters further. Lately, though, Ford is gaining on its rivals' misfortune.

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Several years ago, when car buyers were crazy about Ford Explorers, Ford earned several billions in profits. So this is the only key to their survival. And I got one for my family also. I thank God, I did. My wife drove the Ford Explorer to work and had a car accident; with God???s blessing, she suffered only a bruised left arm, while the SUV was a total wreck.

As mentioned earlier, our auto industry will only survive if the American people buy American cars. Billions of aid will not bring back our auto industry to profitability without the support of the American people.

Sure, this is free and open market. We have freedom of choice. We can buy the car we want. But there is this eternal law that govern everyone. ???For every action, there is an equal and opposite reaction.??? There is a consequence for every action we make. And this applies to our national economy. Too much importation results to trade deficits, sucking the dollars out of our economy. As a person becomes anemic and weak with the loss of blood in his body, so is the nation???s economy with the loss of dollar reserves due to importation and the loss of business activity and jobs.

But global trading is good, if it is fair and balanced. Other countries can export unlimited cars and other products to America, but will not import so much from us that it will result in trade surplus to them and deficit for us.

But everybody shares the blame for this problem. Our government allows unlimited importation, our businesses love to sell imported products and the people love imported products. Result ??? bankrupt America. And so the only way for America to produce the dollars is to print and print and print more money, resulting in inflation that will cause more damage to our economy.

Our economy is suffering because of the loss of patriotism in our country. As our country is a nation of immigrants, a nation of imported people, Americans love imported products. The immigrants still love their native cultures, their native food and other native products. Japanese cars are popular in their countries; and so when they come here, they buy Japanese cars.

But to restore patriotism, it is by persuasion and not by force. But they must understand that to continue buying foreign goods, will put their country???s economic security in peril. Americans working in other industries should support our auto industry, that, in turn, they may support us when we need them, too.

chrysler is a private entity, nardelie will take the money along with cerebus, 90% owned, and put it back into their pockets before filing for bankrupcy, gm has been giving in to the uaw for years, as well as taking nice fat bonuses for themselves, well, hopefully the game has ended for these two, chrysler is doomed, let it fall, sell off jeep, an amc product, someone will want it, and someone will buy off the van chain as well, ford will struggle for awhile, and perhaps make a comeback, but not without destruction of the union contract, and parts suppliers knowing the cannot make the profits they do if they wish to stay in business

new auto companies coming, we do not need the "garbage 3" anymore

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Posted By: joe_mama @ 12/12/2008 10:42:02 PM

I like how us senators making $160,000+ per year can tell people making $30/hr that they need to take a pay cut.

So sayeth the King (Don, that is), "Only in America!"

JM
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Posted By: er123 @ 12/09/2008 12:25:36 PM

Several years ago, when car buyers were crazy about Ford Explorers, Ford earned several billions in profits. So this is the only key to their survival. And I got one for my family also. I thank God, I did. My wife drove the Ford Explorer to work and had a car accident; with God???s blessing, she suffered only a bruised left arm, while the SUV was a total wreck.

As mentioned earlier, our auto industry will only survive if the American people buy American cars. Billions of aid will not bring back our auto industry to profitability without the support of the American people.

Sure, this is free and open market. We have freedom of choice. We can buy the car we want. But there is this eternal law that govern everyone. ???For every action, there is an equal and opposite reaction.??? There is a consequence for every action we make. And this applies to our national economy. Too much importation results to trade deficits, sucking the dollars out of our economy. As a person becomes anemic and weak with the loss of blood in his body, so is the nation???s economy with the loss of dollar reserves due to importation and the loss of business activity and jobs.

But global trading is good, if it is fair and balanced. Other countries can export unlimited cars and other products to America, but will not import so much from us that it will result in trade surplus to them and deficit for us.

But everybody shares the blame for this problem. Our government allows unlimited importation, our businesses love to sell imported products and the people love imported products. Result ??? bankrupt America. And so the only way for America to produce the dollars is to print and print and print more money, resulting in inflation that will cause more damage to our economy.

Our economy is suffering because of the loss of patriotism in our country. As our country is a nation of immigrants, a nation of imported people, Americans love imported products. The immigrants still love their native cultures, their native food and other native products. Japanese cars are popular in their countries; and so when they come here, they buy Japanese cars.

But to restore patriotism, it is by persuasion and not by force. But they must understand that to continue buying foreign goods, will put their country???s economic security in peril. Americans working in other industries should support our auto industry, that, in turn, they may support us when we need them, too.
- Reply
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Posted By: user7 @ 12/08/2008 10:07:26 AM

chrysler is a private entity, nardelie will take the money along with cerebus, 90% owned, and put it back into their pockets before filing for bankrupcy, gm has been giving in to the uaw for years, as well as taking nice fat bonuses for themselves, well, hopefully the game has ended for these two, chrysler is doomed, let it fall, sell off jeep, an amc product, someone will want it, and someone will buy off the van chain as well, ford will struggle for awhile, and perhaps make a comeback, but not without destruction of the union contract, and parts suppliers knowing the cannot make the profits they do if they wish to stay in business

new auto companies coming, we do not need the "garbage 3" anymore