Ford does not need US government loans: CEO

[xrough]

Ford does not need US government loans: CEO


NEW ORLEANS - Ford Motor Co has enough liquidity to fund its restructuring plan and despite the deep downturn in auto sales still sees no need to ask for government loans, Chief Executive Alan Mulally said on Saturday.

"We don't want to borrow any more money. We have sufficient liquidity to fund our transformation plan, which means our business is in a relatively good shape," Mulally told reporters on the sidelines of the National Automobile Dealers Association convention.

Ford's US rivals, General Motors Corp and Chrysler LLC, won approval in December for $17.4 billion of government loans to avert collapse. Ford has asked for access to a $9 billion credit line from the U.S. government but has not sought loans. Washington has not yet responded to Ford's request.

Mulally said Ford was in a better situation than its rivals because it borrowed more than $23 billion in 2006, using most of the company's assets as security, including its well-known blue oval logo.

Mulally said US industry-wide sales in January had been similar to those in December, when they fell about 36 percent from a year earlier to 10.3 million units on an annualized basis.

Ford expects an economic stimulus package being pushed by new President Barack Obama to drive a recovery in auto sales starting in the second half and maintains its forecast of US auto sales at 12 million to 12.5 million units, he added.

The forecast represents the high end of prevailing expectations. Analysts have forecast US sales in a range between 10.1 million and 12.5 million units for 2009.

"Right now, I think with everything planned in the fiscal and monetary policy, I am very comfortable that we are going to start to turn things around through the second half of the year," Mulally said.

[kualaws]

so ford has done its job better than the other big-two

[GraniteForge]

so ford has done its job better than the other big-two

GM has a lot of money in the bank, and excess property that it could sell or lease to ease its money trouble. Chrysler is a unit of a privately-held multinational that runs deeply in the black.

Neither company actually "needs" any money from the government, the companies are just run by individuals who are just exceptionally greedy -- even for auto executives -- and put their own personal luxury above the financial health of the nation.

[antimony]

Facilitate hostile takeover of stupid companies

I am going a bit off thread, but GFs post leads me to believe that there is very good arguement of removing obstacles for doing a hostile takeover of such companies. The takeovers, in such cases would remove the bad management who tend to use shareholder property as their own.

Case in point, in April 2008 JPMC wanted to purchase WaMu at $8. The then CEO took the decision not to allow the sale. A few months down the line, WaMu folded, reducing shareholder value to zero.

This was not a hostile takeover case, just an illutration to show how incompetent management harm shareholder value by not moving out.

[gunnut]

I am going a bit off thread, but GFs post leads me to believe that there is very good arguement of removing obstacles for doing a hostile takeover of such companies. The takeovers, in such cases would remove the bad management who tend to use shareholder property as their own.

Case in point, in April 2008 JPMC wanted to purchase WaMu at $8. The then CEO took the decision not to allow the sale. A few months down the line, WaMu folded, reducing shareholder value to zero.

This was not a hostile takeover case, just an illutration to show how incompetent management harm shareholder value by not moving out.

Yahoo is another example.

Micro$oft offered $47 billion, or $33 a share to buy Yahoo. Yahoo CEO placed personal pride above shareholder return and wanted $37 a share. M$ said thanks but no thanks. Yahoo is now trading at $12 a share and the CEO resigned a few weeks ago.

[Johnny W]

But on the other hand, there are plenty of examples of takeovers that should have been resisted. Wachovia/Golden West for example. The CEO said lets do it, and the Wachovia Board and shareholders bent over.

[antimony]

But on the other hand, there are plenty of examples of takeovers that should have been resisted. Wachovia/Golden West for example. The CEO said lets do it, and the Wachovia Board and shareholders bent over.

JW,

Actually I think that this just proves my point that obstacles to remove incompetent management (in this case Wachovia's) should be dismantled. On the other hand Golden West shareholders got a pretty neat deal.

I think over the years, shareholders, instead of taking an active interest in company affairs have largely relegated to the decisions made by the company top management. That is probably what led to the current culture of super-CEOs, who act as virtual owners of the company

[Johnny W]

Golden West shareholders got a good deal if they immediately sold their wachovia stock. If they held on to it, they got shafted. Although with the real estate market collapse, they would likely have been shafted either way.

But you know, its hard to judge incompetent management. Ken Thompson (Wachovia's former CEO) could do no wrong up until the Golden West deal. He did three major deals before that (Wachovia First Union merger, South trust, and Westcorp), and they went well. Basically his ego got the best of him.

[Gun Grape]

Ford might need a loan with these numbers

DETROIT – Chrysler's U.S. vehicle sales plunged 55 percent in January, while General Motors' tumbled 49 percent and Ford's dropped 40 percent, starting 2009 at an abysmal pace for the whole auto industry as lower sales to fleet buyers like rental car companies weighed down the results.

http://news.yahoo.com/s/ap/20090203/...lzbGVyc2FsZQ--

[antimony]

Golden West shareholders got a good deal if they immediately sold their wachovia stock. If they held on to it, they got shafted. Although with the real estate market collapse, they would likely have been shafted either way.

But you know, its hard to judge incompetent management. Ken Thompson (Wachovia's former CEO) could do no wrong up until the Golden West deal. He did three major deals before that (Wachovia First Union merger, South trust, and Westcorp), and they went well. Basically his ego got the best of him.

Good point, but I think at least some of the top managers have recently emerged as beacons of incompetence/ inefficiency or at the very least supreme arrogance, like, for e.g., the million bucks spend by thain to redecorate his office at Merrill Lynch (I believe the US Prez has only a fraction of that to redecorate the WH at the beginning of a term). CNBC has an article where they compare each opiece that Thain bought with something that is available in the market. Definitely worth a look...
http://www.cnbc.com/id/28796511

If I was a shareholder of any company with any clout I would definitely like to know the Cost of Company for each member of Executive Management group

[Johnny W]

Good point, but I think at least some of the top managers have recently emerged as beacons of incompetence/ inefficiency or at the very least supreme arrogance, like, for e.g., the million bucks spend by thain to redecorate his office at Merrill Lynch (I believe the US Prez has only a fraction of that to redecorate the WH at the beginning of a term). CNBC has an article where they compare each opiece that Thain bought with something that is available in the market. Definitely worth a look...
http://www.cnbc.com/id/28796511

If I was a shareholder of any company with any clout I would definitely like to know the Cost of Company for each member of Executive Management group

Definitely agree with that last bit. In fact, I think that all to often, major shareholders do not do due diligence regarding voting for or against takeovers and mergers. The shareholders today are usually a rubber stamp.

[antimony]

Definitely agree with that last bit. In fact, I think that all to often, major shareholders do not do due diligence regarding voting for or against takeovers and mergers. The shareholders today are usually a rubber stamp.

One recent example of shareholder activism was when the WaMu Chairman and CEO Kerry Killinger went to pursue "private interests". I am not saying that shareholders should second guess management all the time, but definitely a more active interest is required.