Ford Worries About Competing

[JerryW Gilliland]

GM and Chrysler Bankruptcies Cause Ford Worries About Competing

By Rex Roy June 2nd, 2009





If you've thought about the General Motors and Chrysler bankruptcies for even a minute, ramifications for Ford Motor Company quickly surface as a big, "Hmmmm, wonder how that's gonna work out."



Certainly, the folks at The Glass House (Ford's Dearborn, Michigan HQ) have been wondering. And wringing their hands. As reported in Automotive News, Ford is calling for the U.S. government to maintain a level playing field for all auto manufacturers. It may be too late for that.





"The reality is, if you're competing against a company that's majority owned by the U.S. government, that does raise certain concerns about what the competitive dynamic will be for the industry," Ford spokesman Mark Truby said. "So we're hoping we can work with the administration and the task force to be heard on those issues as this progresses." Making sure that the government's ownership of GM is just a short-term proposition is one important consideration, Truby said.



Other reports about the GM bankruptcy have cited government officials, including President Obama, as stating that the U.S. Treasury will divest its GM holdings as quickly as possible, thereby relinquishing the most public (visible) level of control. That would help bring the competitive situation back into a more natural free-market balance, but for now, Ford is definately on the up side of the tetter totter with its feet dangling in the air.



Ford is particularly concerned about:



The health of its supply chain; if key suppliers who service Ford and also GM and/or Chrylser tank, this negatively impacts Ford by stopping their production

GM and Chrysler's lower cost of financing because of TARP dollars that have bolstered GMAC's ability to offer low-cost financing that Ford's credit arm can't match because it didn't take federal funds

GM and Chrysler's ability to funnel taxpayer money into bigger incentives

Mega dealers who own multiple franchises of all brands; with GM and Chrysler shedding so many stores, this may also force the closing of some Ford dealerships because the larger dealership holding companies may be forced to close. Between GM and Chrysler, close to 2800 dealerships could be shuttered.

Going-out-of business pricing by closing GM and Chrysler dealerships impacting short term sales

"We want as level a playing field as possible, and we want to make sure we're as competitive as we possibly can be," Truby said. "And if that's the case, with our new products, we'll be fine. We can win as long as there's a relatively level playing field."



Unfortunately, the playing field isn't level now. Things are tipped in favor of GM and Chrysler. And the scales will tip more out of Ford's favor after GM and Chrysler emerge from their individual chapter 11s. Both companies will have lower cost structures than Ford, giving them a huge edge going forward. Ford continues to introduce new and improved products as they march forward. On their own.



[Automotive News]



I personally feel that Ford lawyers need to attack this head on. If a foreign government were doing this it would be called dumping and wouldn't be cool.

 

[Kevin Lang]

I agree.



Obama is forcing out anything not government controlled. We need to only have econoboxes.



and for whatever reason, healthcare must be expanded to cover the 46 million Americans who don't have it. The fact that many don't have it by choice is notwithstanding. The fact that some don't want it is ignored.



But Big Brother knows best.

 

[A K]

Cue Frank in 5... 4... 3...

 

[Bill Barber]

Thats an interesting read.

The feds will force green cars by mandate from G.M and Crysler, and than maybe run good old Ford out of business.

 

[TrainTrac]

Gov't takeover of banks and auto companies calls to mind some of these quotes.

Freedom is irrelevant. Self-determination is irrelevant.

You must comply.



You will be assimilated. Resistance is futile.



Why do you resist?

We only wish to raise quality of life for all species.



Negotiation is irrelevant. You will be assimilated.



We are the Borg. Resistance as you know it is over. We will add your biological and technological distinctiveness to our own.



You will become one with the Borg.

You will all become one with the Borg

 

[Kevin Lang]

I support that theory.



Will the British/German/Japanese/Korean cars produce vehicles that aren't green econoboxes, or will they continue to produce respectable cars?



If so, I'll have to make that switch over (plays taps)



The high gas prices of Europe that have everyone driving evolved Honda Fits hasn't beaten back the luxury car market over there, I doubt (hope) that obama's ridiculous fuel efficiency won't kill them over here.



EDIT: The borg are the embodiment of socialism. Without any free will at all, socialism just might work. As it is, even the Pilgrims gave up on socialism.

"I am obama, of Borg. You will be assimilated".

 

[J Piroth]

"...and for whatever reason, healthcare must be expanded to cover the 46 million Americans who don't have it. The fact that many don't have it by choice is notwithstanding. The fact that some don't want it is ignored."



KL, the problem here is that when people don't have healthcare it's not like they just hang around their house and die, thinking "Oh well, I didn't pay for it so I guess I just don't get it. My bad."



Instead, they end up in ERs where healthcare is the most expensive to administer and the taxpayers end up funding their care anyway.



Unless we're willing to let hospitals turn away dying patients due to lack of coverage, there's a financial incentive for all of us to have everyone covered.

 

[Bill Barber]

How can you expand healthcare, my blueshield is now 800 bux a mo. thats a weeks worth of work, being semi retired.

10K deductable, never had a claim, to young for medicare.

The system is busted, wife and I may join the ranks of the uninsured shortly.

Need to put food on the table.

 

[Dave S 2]

Mulally isn't stupid. He learned quite a bit about covert / subliminal messages while at Boeing.

Yes, he has done well for Ford.

Yes, they don't have a hand outreaching for stimulus $.

BUT, this (although valid) in my opinion, is Mulally's way of "priming the pump" for the future.

We didn't ask for $ and now look at the disadvantage you put us in against GM & Chrysler! We need compensation!!!

Of course, as CEO, that's what he is paid to do!!!

 

[Kevin Lang]

Some people can pay for the ER, gasp. Rates would be lower without malpractice and insurance actually driving up the prices. The stories of 25 dollar bandages at the pediatrician, since it just gets charged to insurance, arise so often that they no longer seem apocryphal.



If you really really really want provided health care THAT much, just go get a part time job at UPS. They WILL give you health care as a part time employee. They WILL pay 1,500 a semester for school. They WILL give you advancement.



And even working at the lower levels (box throwers) they WILL give you a raise annually, guaranteed. People I worked with there had been box throwing for so long that it actually provided more money than their normal jobs, or gave them a fair bit of extra money to play with.



So there were benefits in addition to healthcare.



Just 4-5 hours a night, 4-5 days a week, and you can get healthcare.



Don't moan that Obama needs to give it to you--employers will.



Or, you could buy it yourself...or do without and just save up in case you do need to pay the ER.



Doing something yourself--ambition--that was the American way. None of this bogus "I need a Handout!" crap that we spout today.



Additionally, the ER problems are also largely due to illegal aliens soliciting them.



DaveS, while I don't want Ford begging for scrap money from the obamanation, unless Ford does something I cannot see them remaining competitive (Which is the obama point, so I'll assume). American Companies were struggling against the foreign-subsidized asian car manufacturers; having to contend with them AND massively subsidized competition AND new nigh-on-impossible MPG regulations will crush them. The playing field is not level at all.

 

[Thomas Rogers]

Bill Barber,



You are kidding, right? You live in a upscale hood. You have rich man toys. You seem to have retired early, and you are complaining about having to pay ~10k a year for health coverage?



You or the wife could always go back to work, working a job that provides benes.



Sorry, but I'm really not feeling sorry for you. From where I'm sitting you are living the dream and living it well.





But, yes, the system is broken. The reason it is broken, in short, is because people have paid TOO LITTLE for TOO LONG to receive TOO MUCH.



Granted, some have no insurance and pay nothing. Others pay only some small co-pays and a little towards their premiums jacked out of their paycheck before ever seeing it. Both of these types of people, and they are the majority (you that pay it all are the minority) , use the healtcare systems resources like they are going out of style. Mom's with coverage take their kids to the doctor's office on average something ridiculous like 6 times, per year, per kid (pulling that out of the air...but I bet I'm close).



Kids don't need to go to the doctor's that often. Healthy people don't need to see their doctor that often. But we do, all because it only costs us $10, or $25 for a co-pay here and there. We have insurance, so we use it. Or, we have no insurance so we go to the ER. The net result is an entitlement mentality where people use a lot and pay a little.



If car insurance were like health insurance you would be able to get a fender that has a door ding on it fixed and repainted for a $25 co-pay. Of course, car insurance would cost 10x what it does now, but those that are getting that insurance paid by their employer would be the first in line at the body shop with minor scratches, dings, and the like.



What is broken is that we have made it too easy and too cheap (relatively) for those with coverage to get and abuse (over-use) healthcare.



TJR

 

[Gavin Allan]

Ford is going to be OK - just watch. Obama Hussein is going to force GM and Chysler to make little Prius imitators (except they will be junk). (Remember the "K-cars" that Chysler made to save itself from the government loan?). Anyway, GM and Chrysler will be run into the ground making government-mandated electrical green car econocrapboxes that no one will want to buy. Obama will drive GM and Chrysler totally out of business in four years, and then Ford will be left standing as the ONLY REMAINING US Automaker.

 

[Kevin Lang]

You seem to have retired early, and you are complaining about having to pay ~10k a year for health coverage?



You or the wife could always go back to work, working a job that provides benes.

Once you stop working and get freedom, who would want to go back in? I read a recent readers' digest where a woman in her 70s said she was going to work a few more years before retirement.



What is the point? Working after you retire is not retiring. You're going to be dead by then, not be able to do anything, and be on a ticket straight for the home.



"Work sucks, and then you Die" is not a motto to live by.



10k a year is a beaucoup of cash even when you're reaping in money hand over fist.



Maybe I'm just too frugal for the modern time; the idea of "credit" scares me.



I thought K-cars were those ultra small cars in Japan that got special license plates? I missed something lol.



I really don't think Obama will let GM & Chrysler die. People believe that the "jobs" created by keeping the companies alive are a good thing, and Obama would take a leak on the third rail for letting them die. The fact that these "jobs" are going to continue to be paid by our taxes as no one will buy a POS econobox that today's econoboxes will laugh at, doesn't enter their minds.



@ 40+ required MPG, these new cars are going to be so pathetic I'll have to rescind my anti-ricer commentary and relocated it on them. A collision with a motorcycle will be fatal for the car.



Penn & Teller equated the poor Prius 0-60 times as being due to having "2 extra lesbians in the trunk"...these new rides won't even hold 2 non-extra ones without crumpling/wheeley-ing.

 

[Bill Barber]

TJR

Try getting a job, that provides benis, when your in your early 60s, not going to happen.

You are clueless

 

[Thomas Rogers]

Bill Barber,



Thanks a lot. But I am not clueless. That's an insult.



It may not be easy, but there are jobs out there. San Jose job market can't be that bad. Then again, if it is, there are other places in this country that the COL and job market may be better suited for retirement.



For that matter, self-employment is always an option, then you get to write-off all your healthcare premiums. The first 9k you make a year you can make tax free. Pretty sweet option there if you ask me.



Like I said, from where I am sitting, it looks like you are a long way from eating cat food.



TJR