California Autos Examiner

Thursday, January 29, 2009

Billion Here, Billion There: Ford Has a Rough Year

Ford had a tough time in 2008 as did most other auto manufacturers. The difference for Ford is that it setup its credit facilities under much better conditions and is now at liberty to draw down another $10 billion in cold, hard cash. This new infusion "should" help Ford stay away from the hangman for the rest of 2009. However, if things don't improve after that, then all bets are off.

Personally, I'm curious to see what will happen with Volvo. If Ford does end up unloading the brand, it will have to repay some of the loans it has secured by using the Swedish manufacturer as collateral. Certainly Ford would want to get more meatballs for the brand than it is going to have to pay back to lenders. In this economy, who has that kind of meatballs?

"'Ford and the entire auto industry faced an extraordinary slowdown in all major global markets in the fourth quarter that clearly had an impact on our results,' said CEO Alan Mulally. 'We continued to take the decisive actions necessary to lower production to match the lower worldwide demand and reduce costs, which we expect will allow us to significantly reduce negative operating cash flow in 2009 and position Ford for growth when the economy rebounds.'"


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