Ford & Government Funding

[The_Blur]

To those of you who claimed GM was wrong to use government money, I present you Ford, a company who is currently using government money to pay back government loans.

These loans are coming from various agencies in federal and state governments. Just because Ford was able to get around last year's economic does not mean Ford did it without help. The government had already helped Ford out a year earlier with loans that kept the company functioning.

Can we stop bashing GM for doing the same thing as other automakers now?

Autoblog reported. Discuss.

[wylde1]

I often bring this up when people wave the "Ford didn't take any handouts" flag and no one believes me.

They took government loans, just not on the hugely publicized "Government Bailout" plan. They actually took them earlier than that, people seem to forget that part, or choose to ignore it.

[ron10]

i had forgotten that.

[BackinBlackSS/RS]

WOW!!

[a_Username]

Well, last time I checked the phrase "Everyone else is doing it" doesn't really make the action any better. There are differences in Ford's and GM's financial crisis situations, considering only one company wasn't bought up by the Government(s). The only problem I have is with the media's "holier than thou" attitude towards Ford for them not receiving a direct bailout, and them neglecting the fact of Ford accepting government loans.

[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.

[Kyle2k]

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.

Your connotation is way off when you say stuff like this, slam slam slam on GM (We KNOW you have an opinion on these things, you don't need to keep at it). I also think you need to replace the word "smart" with "lucky" in the above post. Government money is government money whether it is a need or a want, earned or unearned. One could also argue, that as quickly as GM recovered, they might be worthy of the term "earn."

I truly hope you come by a situation when you need help and everyone refuses to do so because you are stereotyped into a category similar to what you and most of the American public are putting GM in.

[Georgie]

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.

good info

[ViperTomcat]

Originally Posted by Kyle2k

I truly hope you come by a situation when you need help and everyone refuses to do so because you are stereotyped into a category similar to what you and most of the American public are putting GM in.

Thats brilliant..equating personal need with a company need.

And I am generally supportive of all of the Big 3, including GM. I've never referrred to it on this site as "Government Motors" and they build great cars.

But I am also unwilling to blindly support any company and defend it to the end. I'm not happy or proud that Chrysler is controlled by Fiat and needed to be saved in that way. Nor am I happy to say that Ford isnt involved in government support in any way.

[Kyle2k]

Originally Posted by ViperTomcat

Thats brilliant..equating personal need with a company need.

And I am generally supportive of all of the Big 3, including GM. I've never referrred to it on this site as "Government Motors" and they build great cars.

But I am also unwilling to blindly support any company and defend it to the end. I'm not happy or proud that Chrysler is controlled by Fiat and needed to be saved in that way. Nor am I happy to say that Ford isnt involved in government support in any way.

I more-so mean the no one deserves a second chance mentality.

On the other points- thank you for the clarification. I was just lost on your connotation, which is already hard enough to interpret over the internet.

[ViperTomcat]

Originally Posted by Kyle2k

I more-so mean the no one deserves a second chance mentality.

On the other points- thank you for the clarification. I was just lost on your connotation, which is already hard enough to interpret over the internet.

Ah ok! I see what you meant, yeah..I understand.

The internet isnt the best way of communicating meaning, face to face cant be replaced!

[Number 3]

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.

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?

[Dakota Kid]

ViperTomcat nailed it.

[ViperTomcat]

Originally Posted by Number 3

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?

I understand what you're saying..but here's the thing..lets just say this..

Number 3: I'm going to GIVE you 20 dollars and loan you 10.

ViperTomcat: Thanks! I'm going to keep the 20 dollars and pay you back the loan for 10! We're even..

Number 3: Ok! wait a second...

All I've done is paid off your loan with the non-loan money you gave me. Yes I may have changed my ways to not need a loan in the future, or more money, but the fact is all I did was form a money circle.

I'm thrilled that GM isnt owing on a loan to the Federal Government, but I am less thrilled that the money they used to pay off that loan was through tax payer sourced money.