Actually, the big problem for all of the US automakers were the many many decades of entitlement programs that were built into f, gm, and c.
By going bankrupt, and robbing the bond holders of GM from their rightful property, the US Govt has unfairly given GM a huge advantage. By wiping off the long term debt from GM’s books, GM is actually in a fairly good position right now. Meanwhile, F is still burdened by a massive amount of long term debt, and GM has a very strong balance sheet advantage.
On 150 billion of revenue, GM has only 17 billion of debt, compared to F’s 130 billion of sales, with 100 billion of debt. Using an interest rate of 6%, that means that F pays 6 billion in interest expense, to GM’s 1 billion in expense.
F is by that measure, in much worse shape going forward than GM.
” By going bankrupt, and robbing the bond holders of GM from their rightful property, the US Govt has unfairly given GM a huge advantage.”
Of course. Tantamount to grand theft.
Ford is well run by Mulally, but he retires at the end next year, and
Fields(age 51) is an unproven commodity.
You’re mixing Ford’s automotive debt with their financial services debt.
Financial services debt/assets need to be stripped out for a good apples-to-apples comparison. Ford has much higher debt and assets in financial services (car loans and dealer floorplan, primarily) than GM due to GM spinning off GMAC when they were in pre-bankruptcy trouble. What they have now is much smaller than Ford