Everyone knows that General Motors and Chrysler are in dire straits, seeking bail out money from the federal government. If their assertions are correct, neither automaker has enough cash on hand to make it through the next few weeks, perhaps finding themselves insolvent by early January.
Ford, on the other hand, isn’t in such a bad predicament having enough funds to see them through the end of 2009. Instead of obtaining loan money, the automaker has asked the federal government to extend the automaker a line of credit in the event that the company’s financial position worsens. There is a good chance that Ford will not only avoid having to borrow even a penny from the feds and, if things work out as planned in 2009, the automaker will actually begin to pick up business and market share during the coming years.
Why is Ford doing so much better than its crosstown rivals? For several reasons including the following:
Ford Family ? Unlike Chrysler and General Motors, the descendants of the founder of Ford are still firmly in control of the company. Now owned by the fourth generation of Ford family members (and independent shareholders), the family understands that shares are diluted if the federal government intervenes, with the good chance that dividends would stop being paid. True, Ford mortgaged the entire company two years ago, a move that raised billions in cash and kicked in a credit line before the market plunged.
Global Market ? Like General Motors, Ford has a strong presence beyond North America, selling many more cars overseas as it does in the US. But, unlike GM, the automaker has products that can be sold across many different markets and it is these smaller, European style products that are starting to find their way stateside, including the Fiesta and the all new Ford Focus. GM, on the other hand, doesn’t have quite the reach even with Opel in Europe and Daewoo in Korea ? few of these cars can be sold in America.
New Technologies ? Hybrid technology is spreading across autodom, but Chrysler is a bit player in this arena. GM has decided to go with its two-mode hybrid system, but it won’t compare to the hybrid system Ford is readying for the 2010 Ford Fusion when it debuts this Spring. That car will get 39 mpg in the city and 37 mpg on the highway, numbers which simply blow away the competition. Also, Ford is heavily invested in EcoBoost an engine technology that allows smaller engines to offer power equivalent to a larger powerplant. For example, the V-6 EcoBoost Ford has for the Lincoln MKS will still give excellent fuel economy while offering power equivalent to a V-8 engine.
Ford could still slip up and fail and they’ll still need to pay off their debt, but with new products on their way, new technologies in place, and no federal loan oversight to hamper their operations, the company could and should start seeing a sales increase in 2009 and build on its market share in the process.
Matthew C. Keegan is a freelance writer who resides in Cary, North Carolina. Matt provides magazine, web content, and article writing services to clients all over the world serving the automotive, human interest, and business communities. Matt’s Musings is his personal weblog.
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