Ford Motor Company (F)
The Ford Motor Company plans to get about $18 billion in financing. This marks another blow to the U.S. auto industry. Ford’s negative cash flow and continuing balance sheet problems will not go away soon and the $18 billion is no panacea. Ford, General Motors and Chrysler all have to compete in the world automobile market in an era of globalization and free trade where most of their competition does not have to healthcare and pension costs that the Americans do.
Since the 1970s the manufacturing industry in the U.S. has become almost nil and the automobile industry’s issues are just another reminder. One way to help make U.S. automakers more competitive is not a Chrysler-like bailout, but having the federal government make some fundamental changes to our healthcare and pension systems. If the government could come to some solution for these country-wide issues it might bailout Ford, GM, etc. as well as many other companies that face the same issues our auto industry deal with daily.
Ford lost $7 billion during the first nine months of 2006 and has said it won’t return to profitability until 2009. I would say that is wishful thinking unless their pension plans are reworked and healthcare becomes universal in America. Bill Ford Jr. should be screaming to everyone that will listen that universal healthcare and reformed pensions are the way to save America’s failing industries.
Written by Nagel on November 28th, 2006 with
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