Ford will be next for the following reasons:
By Daniel at 1 June, 2009, 11:51 pm
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1. The recovery will be long and slow. Car sales will not recover to old levels for a very, very long time.
2. The market will be inundated with hugely discounted cars from GM and Chrysler and their disenfranchised dealers.
3. Ford will have difficulty competing with a GM and Chrysler’s deep government pockets and tax breaks and their government warranties.
4. Inflation will raise commodity prices squeezing margins.
5. Ford is surviving on cheap credit. When the current loans come due, and interest rates are much higher they will not be able to service those loans.
6. Ford will need to file for bankruptcy to get the same “deals” GM and Chrysler got with their dealers, creditors and unions.
and finally, Bankruptcy is the new black. Very trendy. Companies are born a new fresher and stronger.
Since Ford is still family owned, and that family won’t want to give up their shares look for some shenanigans first. For example the family might try to turn their shares into some type of secured credit line so that they can then convert this obligation into stock in the new company.
Also, It is patently unfair for Ford to have to compete with car companies subsidized with tax money. The Bush administration should have let GM go to bankruptcy and restructure into a smaller car company unfettered by heavy legacy costs. Instead they kicked the ball to the Obama administration which rather than allowing GM and Chrysler avail themselves of bankruptcy protection instead used tens of billions of our dollars to rescue the UAW. Now they have engineered a restructuring where the government owns GM and they also control the rules by which cars are designed and built. the added cost and reduced market share of the industry is borne 100% by Ford and is subsidized forever by the US taxpayer for GM.
This goes against all free market rules and is guaranteed to produce the highest cost least value automobiles in history.
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