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Ford should focus on vehicles people want to buy now at prices that yield a fair profit. Otherwise Bill Ford and family may go down in history as a wealthy clan that owned, and lost, a car company. (http://www.bloomberg.com/apps/news?pid=20601039&sid=apNCKlNPvHjk)

http://www.cleanmpg.com/photos/data/501/Bill_Ford2.jpgDoron Levin - Bloomberg (bloomberg.com) - Dec. 1, 2006

Bill Ford addresses Employess at a Townhall meeting in Dearborn.

Henry Ford, founder of Ford Motor Co., famously hated and distrusted bankers.

One can only imagine how the man who pioneered the moving assembly line in the early 20th century might have reacted upon learning that his heirs were getting set to hock the company's assets to banks, private-equity firms and hedge funds.

The Ford family, led by Bill Ford Jr., chairman of the No. 2 U.S. automaker and great-grandson of the founder, has few options for raising capital to avoid bankruptcy, and none are attractive. They face the industrial version of handing the family jewels to a pawnbroker.

The family's control of Ford has never been so much at risk in its 103-year history. The founder's heirs own 4 percent of the equity and control 40 percent of the votes via a super-voting class of stock. The new financing means -- in essence -- that if Ford Motor can't rebound in the next few years, lenders will own Ford's key assets.

Bill Ford Jr. took the reins as chief executive officer in 2001 and held tight until two months ago. In part because he couldn't make Ford Motor perform, his family must bear the consequences of a distressed enterprise with net losses of almost $7 billion so far this year...

Instead, Ford is pledging most of its factories, machines, trademarks, brand names such as ``F Series'' pickup trucks, and other assets as collateral. They will secure a five-year, $8 billion revolving credit agreement, mostly with banks, and a $7 billion term loan, in part with private-equity groups and hedge funds.

The plus side is that so much cash will make bankruptcy less likely over the next three or four years... http://www.bloomberg.com/apps/news?pid=newsarchive&sid=apNCKlNPvHjk

On January 6, 2004, the CNN Money Online released an article quoting GM's Rob Putz: "Hybrids are an interesting curiosity and we will do some, but do they make sense at $1.50 a gallon? No, they do not."
[http://money.cnn.com/2004/01/06/pf/autos/detroit_gm_hybrids/index.htm]

That was three years ago. In that time, gas has seen $3.00+ a gallon.

And Ford is talking about about saving the company with a V8-powered truck three years from today? I don't get it.

Hi Tony:

___I am going to take a guess here but I believe Ford is still making $’s on its F-150 line no matter how much gas the darn things drink. It is losing money hand over fist on the FEH/MMH. The last I remember reading was Ford needed to sell 70,000 hybrids per year to break even. The last hard sales data from June 30 of this year showed the possibility of maybe 24,000 units through the 06 MY. Sales from Jan. 1 - June 30 of both the FEH and MMH were just 11,810 units. Ford is losing a lot of money on their hybrid program and it will not be long before they will have to pull the plug. Unless the Fusion Hybrid is a smash hit :(

___The only saving grace is that Ford will possibly use domestically produced NiMH batteries and possibly CVT transmission which should save them a bundle vs. what they are paying both Sanyo (NiMH packs) and Aisan (e-CVT) currently.

___This is just a guess and my personal thoughts. I just hope Ford can pull out of this because without them, the rest of us will pay more for every vehicle we purchase in the future.

___Good Luck

___Wayne

Wow.

Ford really did hate banks. He was rather well known for stating that a living should be earned through work, not through handling and trading of money; he bought several banks during the depression to keep farms from foreclosing, and paid for several farmers Model T's, which he could do without blinking, financially.

To think that they've come to this is really quite the downfall. I still don't understand why they don't get rid of some of their assets, like Jaguar, or Volvo. Why they continue to think that trimming the workforce rather then management will really make a difference (Yeah, like they'd do that.) That they think that by pushing into a single market area rather then diversifying is also a good solution. That they don't need to really advertise to sell their hybrids. That not really competiting with the majority of the market is a good way to stay ahead as long as you can sell a few very profitable models. Or that everyone loves their "redesigned" looks.

http://images.ucomics.com/comics/nq/2006/nq061129.gif

Hi Rich:

___A lot of good points. I can see attempting to keep Volvo under the Ford name because it is #1. profitable and 2. Probably the most safety minded car maker in the world.

___When we spoke to some of the Volvo managers at last years Chicago Autoshow, we were filled with all kinds of little tidbits. The one I remember vividly was about a $0.50 grommet that extends fire breach time through the fire wall from something like 3 minutes to 20 minutes. Ford would not place this grommet in their product line but Volvo sure did.

___As for Range Rover and Aston Martin, I would love to see those two marques disappear off Ford’s books. They overpaid for them using the big $’s they made when the Explorers were super hot and they are also a losing proposition overall. Sometimes you have to cut your losses.

___IIRC, Ford has trimmed something like 20 - 30% of it managerial workforce already. I will keep my eyes open for those numbers. Those guys and gals did not receive nearly the deals that the UAW workers received last week which is another area of contention. Is the UAW contracts structured to give away the store upon an announced layoff? Ford has to be hemorrhaging billions with some of the buyouts ½ their US UAW workforce accepted last week. I know accepted and actually walking through the gates for the last time are two different things but we shall see soon enough. Ford takes care of their own which is a good thing from the sounds of it but if the company goes bankrupt, there is nothing left for anybody anyway?

___And then the bailout $’s. If Chrysler could ask for a loan from the US government at what were decent rates back in the Iacocca era, why couldn’t Bill Ford asked the president for a similar loan of sorts? Allowing the money sharks to control your destiny if the restructuring plans head south is like buying them the gun to shoot you in the head with :(

___I do not know what the answer is but when I saw the US Focus was not going to receive the Euro update 3 or 4 years ago while the Mazda 3 did and seeing the Ranger languish with a 10 + year old design while the Tacoma was being updated at car like rates, it was only a matter of time :(

___I have some Ford Blue in me and it pains me greatly seeing this company go down the tubes as fast as it has … All of the above coming from an amateurish enthusiast at my best and a talking head without a clue at my worst.

___Good Luck

___Wayne

Hi All:

Looking back at this article from coming up on 5-years ago, Bill Ford and Alan Mulally were geniuses!

So much for us analysts including the Bloomberg writer ;)

Wayne

Times certainly change.

There's a great book called "Against the Gods." I forget the author but it has a wonderfully developed arguement that the predictability of mankind is terribly unreliable when looking at large complicated things - be it nature or manmade. It seems that "times change" a lot, just when we aren't looking.

Yikes!!!

I just started reading this thread- not looking at the dates- and I about swallowed my tongue!!

I'm more a GM booster than a Ford booster but reading that was REALLY DEPRESSING!

Weeeeeh- not a trip down memory lane I would like to take again.
I bet Ford STILL MAKES most of its money from light trucks-GM sure does.They- both of them- make pretty good light trucks.
Charlie