Will Ford Make It?

by Benjamin Jones on February 3, 2009

Ford Logo

I think so. At least in the near term.

A few weeks ago when the company was lobbying aside GM and Chrysler for federal funds, I was less sure about this. Most people agreed that Ford had done well to take out long-term credit before the markets shut down, putting them in the best position of all the automakers to weather the current recession, but none of the Big 3 really seemed ready for the change.

However, after initially lobbying the government for federal assistance, the company is saying it won’t need any money to keep them afloat through the next year. This is no doubt good news for stockholders and employees that might have feared the effects of a forced restructuring, but what does it really say about the viability of the company?

Sure, they might be afloat for a few more months than the competition because they had more money in the bank to begin with, but what indication is there they Ford, unlike its rivals, won’t run out of money eventually. Perhaps all they are doing is spending billions of dollars to delay the inevitable collapse of a company that has refused to innovate for decades.

Regardless of how you feel about the auto bailout, the big problem here for Ford and the other US automakers is that their continued success is predicated on a foreseeable end to this recession and an upswing in consumer vehicle demand. Certainly, the recession will end eventually, but America is already choked with cars and the environmental movement is gaining momentum.

Cities are starting bike shares, shutting down roads, adding light rail, and trying to prevent cars from entering downtown areas. With a majority of Americans living in the cities these days, this doesn’t bode well for the future growth of automobile sales in the United States. I’m not saying the market is already mature, but it is maturing and this recession, I think, will only speed the maturation process.

The Japanese automakers have already encountered a mature domestic market and have secured their mass sales globally by eroding the market share of companies like GM over the last 30 years both in the US and elsewhere. Unlike Ford and the rest of the Big 3, the Japanese automakers have shown themselves capable of innovating in a mature market as well as tailoring their cars to the needs of drivers from India to England.

What am I trying to say with all of this? It’s simple: Ford may have the money, and possibly the cars, but their success in the near term may fall prey to the slide of American cars from the top of a market that is increasingly being moved overseas. If Ford doesn’t change its global perspective, its viability over the next decade may not extend very far beyond then.

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1 Uncle B February 3, 2009 at 7:54 am

Post (GRD) great republican depression, the remaining working population of America will drive Buick LeSabres and Cavalier-like cars made in China. These cars are a current-day reality on the streets of China, and await export to the U.S. on the docks of Shanghai as we speak! The elitist uber-rich shareholders of GM had GM – America teach GM – China how to build these cars using 85 cent and hour, Chinese peasant women, the supply of which is unending and self-regenerating in China. The Uber rich chose these women over the North American car builders for quite apparent economic reasons! The current “bail-out bullshit” is a smoke-screen devised by the Uber-rich bastards, to foist liability for the large number of unemployed they intend to create, from the private sector, over to the public sector to relieve themselves of any undue expenses, before they collapse expensive North American operations in favor of highly profitable Chinese and Asian operations. Remember, they now own both, are dumping the American white elephant, and the workers, dirty thirties factories, liabilities and all, for more profitable Asian production centers, so that they can be truly competitive with Honda, Hyundai and the like! It is a good, sound business strategy for the uber-rich shareholders, and by selling American stock and buying Asian stock, they slide away to new fields of immense profits, liability free as they collapse American corporations, and Yankee doodle gets it up the brown spot, hard, once again, and is left, smarting and holding the bag! Any truly innovative and advanced ideas will be incorporated into the new Chinese built, highly profitable for shareholders, cars. The “Volt” is a 1969 chevelle body, complete with sheet metal and hydraulic support, engine removed, battery pack added, nightmare of 1930’s greasepit engineering – no servo’s, no drive by wire, no plastics, no carbon fiber, no magnesium parts, no aluminum, no advanced polymer composites – Hell, even Hyundai is trying to make better lighter bodies from recycled soda bottles, and Henry Ford did a number with Soy-plastics way back when! There is no way in Hell, that a major corporation in the country that put a man on the moon can be so backwards, unless they have other motivations.

2 sickpuppy June 15, 2009 at 3:56 pm

And how it hurts too!

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