Letters From The Forums: Ford Gets Help from U.S. for Exports

Aug. 13, 2010
First and foremost, Mr. Mulally, we don't have $3.1 billion to loan anyone! So, shame on you for taking the money.

Ford Gets Help from U.S. for Exports

Say it isn't so! I "desperately" wanted Ford (heck ... any large corporation) to say "No thanks, Mr. Obama ... we don't want -- make that need -- your help." And I really thought Ford might just be the one to pull it off. Sigh.

You see, I've been plugging Ford CEO Alan Mulally for months, using terms like "rogue" and "courageous" and "honest." But today I'm just a little saddened and deflated. Another leader joins the growing number of American embarrassments we call "CEO." Sigh, again.

First and foremost, Mr. Mulally, we don't have $3.1 billion to loan anyone! So, shame on you for taking the money.

Second, how much of it will be added to your salary? And don't play with us here, Mr. Mulally. Most of us aren't Ivy Leaguers, but we've stayed in a lot of Holiday Inn Expresses.

Finally, my good man, when might we expect you to pay it back? -- motorcycleboy

Ford did a lot of things right through a combination of good management, foresight and luck. Ford has benefitted greatly from good leadership from Mulally and Bill Ford. Ford, being smaller than GM, had less overhead and is more agile (in the relative sense for the auto industry).

They took steps to get their finances in order before the recession, unlike their rivals, and despite much criticism from cable news screamers and the business media.

Ford continues to have the No. 1-selling vehicle in the world that is also profitableF-Series truck. Ford of Europe remained profitable. Ford had a good product mix and new products in the pipeline. Ford rates high in safety and quality rankings. Ford Credit, unlike GMAC, stayed with car loans and didn't get mixed up in mortgages and subprime, again much to the chagrin of the news screamers.

And while it was a very good thing they did not need a bailout, it was clear that because Chrysler and GM did, in many ways it put Ford at a disadvantage financially.

Again we are talking about loan guarantees that will be paid back. In case you might have forgotten, Wall Street's meltdown cut off automakers' normal sources for working capital. Not only that, but coupled with the loss of consumer credit and speculation driving up gas prices, it put the hurt to the entire auto industry.

I see nothing wrong with Ford accepting help to export. For far too long U.S. manufacturers have had a strong headwind to fight to export, whereas importers have the tailwind -- due to years of bad economic and trade ideology. -- Abogle

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