How refreshing to see one of the Big Three automakers putting their economics where their mouth is. Ford, for the present time, is declining any government bailout aid. In a previous post, I made the argument that bailing out the Big Three would be simply a pass through directly to the United Auto Workers (UAW) labor union. By declining government bailout loans, Ford is avoiding the extra government oversight and restrictions that come with those loans. Ford has positioned itself to be in the best position of the Big Three to compete with the Japanese automakers in the long run and investment should start flowing to Ford right now.
Today's New York Times ran a story about the potential risks and upside to Ford's decision. In what seems to be the most subtlely underhanded compliment of the season, Ford's CEO, Alan Mulally, was quoted as saying, "All of us at Ford appreciate the prudent step the administration has
taken to address the near-term liquidity issues of G.M. and Chrysler."
By declining the government loans, Ford will be the only U.S. auto company able to negotiate its own labor contracts with the UAW without any democratically appointed "car czar" supervising the process. Ford will also have more freedom as to the types of cars it chooses to invest in. Ford will be able to choose to make electric cars or other "green" cars only if the market demands it.
The proposed auto bailout has been one of the most discouraging pieces of government action since the beginning of our current financial crisis. Ford's decision to stick with the market is one of the silver linings in the ominous clouds of the global recession. Ford does, of course, run the risk of not beeing able to compete in the short-run with GM and Chrysler and their new influx of government cash. But that's not really where the competition is anyway. The real contest is to see which U.S. company will be able to compete with their Japanese counterparts. I think the market will look favorably on Ford's long-run positioning.
By declining the government loans, Ford will be the only U.S. auto company able to negotiate its own labor contracts with the UAW without any democratically appointed "car czar" supervising the process. Ford will also have more freedom as to the types of cars it chooses to invest in. Ford will be able to choose to make electric cars or other "green" cars only if the market demands it.
The proposed auto bailout has been one of the most discouraging pieces of government action since the beginning of our current financial crisis. Ford's decision to stick with the market is one of the silver linings in the ominous clouds of the global recession. Ford does, of course, run the risk of not beeing able to compete in the short-run with GM and Chrysler and their new influx of government cash. But that's not really where the competition is anyway. The real contest is to see which U.S. company will be able to compete with their Japanese counterparts. I think the market will look favorably on Ford's long-run positioning.
Just imagine I read it twice. While I am not as proficient on this subject, I harmonise with your determinations because they create sense. Gives Thanks and goodluck to you.