Post by TonyV on Jan 27, 2010 1:03:13 GMT -5
Posted: 11:28 a.m. Jan. 26, 2010
Ford: Benefits outweigh disadvantages of not taking aid
By Justin Hyde
Free Press Washington Staff
Ford Motor Chief Executive Alan Mulally said today the automaker faced some financial handicap against General Motors and Chrysler thanks to their government-sponsored bankruptcies.
Mulally, speaking to reporters at the Washington Auto Show, said the benefit to Ford from avoiding the nearly $80 billion in aid taken by GM and Chrysler from the U.S. government "far outweighs the disadvantages."
But Ford also now faces higher costs than its Detroit competitors, who were able to rework $227 billion in liabilities they took into bankruptcy court. Upon emergence from bankruptcy last year, Chrysler was debt-free, while GM owed $6.7 billion to the U.S. government and $1.4 billion to the Canadian and Ontario governments, loans it said Monday it would pay back by June.
The Obama administration also provided aid to GMAC to lend to GM and Chrysler consumers and dealers.
Meanwhile, Ford held $26.9 billion in automotive debt at the end of the third quarter, and paid $214 million in interest costs during the same period.
"We are paying back our loans," Mulally said, repeating the line for emphasis. Against GM and Chrysler, "we are at a little bit of a disadvantage on the cash side."
Mulally said as Ford's profitability and cash flow improve, "we'll accelerate the improvement of our balance sheet."
Contact Justin Hyde: 202-906-8204 or jhyde@freepress.com
Ford: Benefits outweigh disadvantages of not taking aid
By Justin Hyde
Free Press Washington Staff
Ford Motor Chief Executive Alan Mulally said today the automaker faced some financial handicap against General Motors and Chrysler thanks to their government-sponsored bankruptcies.
Mulally, speaking to reporters at the Washington Auto Show, said the benefit to Ford from avoiding the nearly $80 billion in aid taken by GM and Chrysler from the U.S. government "far outweighs the disadvantages."
But Ford also now faces higher costs than its Detroit competitors, who were able to rework $227 billion in liabilities they took into bankruptcy court. Upon emergence from bankruptcy last year, Chrysler was debt-free, while GM owed $6.7 billion to the U.S. government and $1.4 billion to the Canadian and Ontario governments, loans it said Monday it would pay back by June.
The Obama administration also provided aid to GMAC to lend to GM and Chrysler consumers and dealers.
Meanwhile, Ford held $26.9 billion in automotive debt at the end of the third quarter, and paid $214 million in interest costs during the same period.
"We are paying back our loans," Mulally said, repeating the line for emphasis. Against GM and Chrysler, "we are at a little bit of a disadvantage on the cash side."
Mulally said as Ford's profitability and cash flow improve, "we'll accelerate the improvement of our balance sheet."
Contact Justin Hyde: 202-906-8204 or jhyde@freepress.com