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What did I miss? Why are GM and Chrysler asking for money and not Ford?

It’s as if Ford did not even exist – not in any headline

Two main reasons.

First…Ford is doing better then GM or Chryco and will be able to handle the recession better. Sales are down, but not as much as the other two.

Second…There’s conditions attached to the Federal money…like restrictions on Executives salaries and bonuses. Upper management doesn’t want to give that up.

When Ford’s new CEO took over from Bill Ford, he faced a severe cash and operational situation. When the economy tanked, he immediately pledged the entire Ford assets for a very large line of credit; sort of like pledging your whole house as collateral for a personal line of credit. He also agressively started cutting costs and non-core activities. Selling Jaguar, Land Rover, Aston martin and other money losing activities got the company a better bottom line focus. Getting out of the rental business was a wise move as well. Ford still has a lot of bagage, but the recent sale of most of their Mazda shares generated more money for working capital. Ford wisely did not terminate their design and development sharing with Mazda.

Ford will also likely dispose of Volvo soon, either to the Swedish government or an Asian buyer. But it will likey retain access to Volvo leading devlopement talents in safety.

You are right that Mullally did not want to tie his business plan to congressioanl approval. This had nothing to do with his salary or bonuses, which he voluntarily reduced. He did want to have access to a government line of credit, if necessary. Ford may or may not need that. Mullallly’s turnaround at Boeing post-9-11 demonstarted that he can make deep cuts and keep the company viable.

He’s a very different person than the Chrysler president (who was fired from Home Depot) or the GM president, who is a corporate plodder afraid to make radical changes. Mullally was passed over for the Boeing presidency, so he sought new challenges.

In addition to what others have said, Ford has also moved some of its plants to Canada, where it doesn’t have to pay for health care for its employees.