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Originally Posted by ViperTomcat
Government backed loans is not the same as government direct supplied loans and money gifts.
Ford restructured prior to the industry collapse .. so they were actually worth something . That allowed them to borrow money against their assets (such as their buildings and plants) They were also smart enough to know that they needed to clean up their products before GM and Chrysler.
When GM and Chrysler stock collapsed, they could not borrow money at a reasonable cost because it would not be secured against assets. So they had to hope the gov`t would lend them money as rates reflective of being backed by assets.
Also..Ford was not GIVEN (no need to be repaid) money like GM was, which GM then used to pay back the loans. They are paying back the loans from the Dept. of Energy with PROFITS, which GM did not.
Using government backed funds? sure..but its completely different from being given money from the government directly, and then using that money to pay back loans. GM didnt EARN the money they used, they were given it.
I suspect this may be a huge shock..but big and small businesses use government loans and government backed loans all the time. Businesses however dont usually get a government check to payback their loans, which GM did.
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Purely the words you are using, but if I loan you $10 to get you through the week and you do really really well on your own and don't need the $10 and you give it back to me...................didn't you repay the loan easily due to your sucess? Does that somehow minimize your personal success and hard work?
Also, and I believe it is in the publice record, you should see the list of stuff Ford was asking for DOE loans for. Things GM had already had in production for years as far as technologies for FE improvement.
GMs list actually seemed pretty advanced for the technologies and the programs that increased FE by the specified amount.
Don't get me wrong, Ford has done very well, but they had their look over the cliff when money was available. I have close friends at FoMoCo and they were whistling a far different tune in '06.
It wasn't that Ford was worth more than GM and could borrow against it, they actually just had less debt than GM. But they got financing when money was available. When the old GM made it's last gasps the country was WELL into spiraling gas prices and a tanked financial picture. Remember the top banking leaders went to congress for the handouts before GM did. So there simply wasn't money to borrow at any rate.
So simply using the threat of a bankruptcy, Ford negotiated everything GM and Chrysler were able to except for one key thing........a NO STRIKE CLAUSE and we'll see how that goes.
They strong armed everyone they owed money to reduce debt obligations.
And now they are using money loaned by the governemnt under the pretense of developing fuel saving technologies to pay down debt. How does that smell any different than what GM was beaten up for when they payed back their government loans?