Ford Motor Company ( NYSE : F ) Biggest Receiver In Stimulus Bill, Still Ahead of the Game
GM shares tumble again – Chrysler sold to Fiat after encountering various obstacles– but Ford ( NYSE : F ) still hopes to be in the best possible position, under the circumstances. After worries that government control could mean GM and Chrysler would be shown favoritism, that the restructuring and reorganization as allowed to GM and Chrysler by the significant government loans would leave them far more streamlined and efficient companies when they eventually re-emerge, optimism remains high for Ford, providing matters continue to run their desired course.
As regards the possible favoritism, the truth of the matter was altogether different to what popular opinion had pontificated, exemplified by the results brought on by the federal stimulus bill – which contained $300 million for the government to buy new fuel-efficient cars for it's fleet. Analyst opinion was largely that GM and Chrysler, as now largely government controlled and government indebted, would become the default issuers of government- issued cars. The biggest beneficiary however, was Ford, the only major car company not to receive government bail-out. $129 million in total was spent on Ford automobiles, almost $24 million more than was spent on GM cars, and more than double that was spent on Chrysler autos.
An amount that despite paling in comparison to the government bailout funds given to Chrysler and GM, nonetheless stands Ford in good stead, and further offers the possible opinion that Ford have themselves become the preferred choice, whether through diplomacy ( The government also did not receive any discounts from either GM or Chrysler, possibly lending further weight to this argument ) or as examples of how a business should be run, the end result remains positive for Ford.
Yesterday CEO of Ford, Allan Mulally, stated that the company would still be continuing efforts to improve their balance sheet for eventual profitability - cutting debts and halting cash reserve usage. Earlier this month they stated their plans to increase production in this and the next quarter, taking advantage of GM and Chrysler's bankruptcies. They also plan to meet with the Canadian Auto Worker's Association on Friday the 12Th, demanding ''parity'' in an effort to remain competitive after GM and Chrysler were both afforded concessions earlier this year.
The hope being that the various measures mentioned above will mean that their own reorganization will not just place them on a par with the renewed GM and Chrysler, but through taking advantage of their situation will leave them rather ahead of the game. Ford stock had surged after bottoming out in November where it nearly hit $1. They closed trading Thursday at $5.98.
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Ford Sees Further Effort To Cut Debt
