Is Ford's Refusal Of Bailout Money Going To Be A Decisive Advantage?

Ford Motor Co.'s newest idea is using the "B" word to undermine the competition, quietly.

Is it akin to kicking a brother while he's down, in this case Chrysler LLC? Of course it is. But it's also seizing a business opportunity -- yet one more example showing how Ford is driving an increasingly tight line between exploiting its advantage and joining a pile-on that could engulf the automaker if things economic don't go just right.

Rival General Motors Corp. could be weeks from bankruptcy, nationalization or both. Chrysler is rushing to complete an alliance with Fiat SpA of Italy. GM and Chrysler are living off a federal lifeline while Ford goes it alone, an advantage in bailout-weary Bailout Nation. And Ford, with two consecutive quarters of retail market share gains, is fielding its strongest lineup in a decade or more.


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Joe_Limon - 4/16/2009 1:11:15 PM

+5 Boost

All the more power to ford. I sure hasn't stopped Toyota from stooping that low.

neutral - 4/16/2009 8:41:30 PM

0 Boost

Advantage? Probably not. If anything, it may be a disadvantage. In the coming years, things will return to normal, GM most likely isn't going anywhere, Chrysler will most likely still be around in some form.

Only difference will be that GM will have nearly no debt and will be very streamlined. In this respect, GM may be better off in the long run. People will quickly forget the whole "bailout" deal which was completely blown out of proportion by an out of control media. Does anyone remember Chrysler in 1979? Did anyone not buy Dodge products in the 1990's because of what happened in the late 1970's? Short answer: No.

LauderdaleDriver - 4/16/2009 10:36:33 PM

+1 Boost

When Toyota stops benefitting from a manipulated ¥ value, and Japan stops forcing all consumers to dump their cars every four years (and maybe really opens their markets), I'll consider that they don't get massive, constant stimulus.

Meanwhile, if GM goes bankrupt, and takes suppliers with it, we'll see how long deeply levereaged Ford can go without bailout loans.

Ford's decision to eschew bailout money was practical, not philosophical. Having seen the lights at the end of the tunnel sooner, they borrowed money back when you could. Period. It has nothing to do with philosophy, and everything to do with dumb luck.

Obliv - 4/17/2009 2:27:24 PM

+1 Boost

It depends on how you answer this question: Do you view Ford as a stable company compared to the other Detroit competitors and even in the auto industry as a whole? My answer would be yes.

woood - 4/17/2009 11:34:59 PM

+1 Boost

IMO Ford is in a good position now because they have money and don't need bailout for now. Secondly, they will emerge as the lone Big 3 company that wasn't bankrupt and they can brag about it in the years to come in their ad campaigns and Third, their reputation will not be tarnished as they continually roll out good world class products. Both GM and Chrysler have to go through the stage of conditioning consumer's minds in the future that they have recovered and that they are here to stay etc. For Ford, its like business as usual. Lastly, Ford will benefit from what GM and Chrysler has negotiated with UAW, creditors, suppliers, etc. by following what they have agreed on without being in the limelight and under government control.