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Here’s to You, Ford, for NOT Failing Miserably

ford-original-logoAn excellent Forbes article recently explains that, though Ford is tossed into the “Big 3” when everyone is talking about failing and government loans, they certainly aren’t in dire straits. With a number of smart moves by Alan Mulally, the chief executive imported from Boeing a number of years ago Ford is still in a relatively strong position compared to GM and Chrysler. Mulally mortgaged much of Ford’s assets (for $24 billion), signed up credit lines two years ago, sold Jaguar, Land Rover, Aston Martin, some of Ford’s Mazda ownership in the last two years. All this was way ahead of the current economic tribulations. Was it foresight into the future economic woes? I have a feeling it was just good business and focusing on what was important to Ford. Having a great business model makes them recession-resistance.

Another key to Ford’s performance is their European car lines and development of small cars:

Both Ford and GM are unlike Chrysler in that they have robust foreign operations. For Ford, Europe and South America earned $2.5 billion pre-tax in the first nine months this year. Those markets are slowing, yes, but they are strong businesses. Europe is providing the small-car knowledge and engineering that Ford needs in the U.S.

With the possibility of the government giving out money, can you blame them for at least asking for access to lines of credit? They are taking responsibility for anything that might put them in a position where they need more time to trim down operations and paying back anything they get from the government as you or I would with a line of credit as opposed to loans that give government partial control of operations and subject to congresses absurd whims. Ford One FTW.

Source: Forbes