Why Bankruptcy Is a Forgone Conclusion for Ford Motor Company

EmersonHart13

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  • Ford’s credit rating is inches away from being downgraded to ‘junk’ by either S&P or Fitch. This will trigger a covenant in their long-term debt, which will adversely affect its ability to borrow more money.
  • After the company committed billions to ambitious restructuring plans, it’s very low on cash and drowning in debt.
  • Amid declining sales across all major markets, the company could go belly up much sooner than anticipated.
 

Stink Star

Don’t Drive Angry!
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Maybe Ford should build higher quality, less expensive cars and trucks? Henry Ford started doing that and look what happened.
It’s not possible anymore. Between safety and emissions regulations it’s doubtful that we will ever see any “affordable” vehicles anymore
 

Maro

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I'd put more blame on upper management than unions. Historically, they almost always fell into the we'll pay you less now(so they'd look better on Financial statements), but we'll give you a better pension at retirement.... and they continually kick the can down the road till it inevitably catches up with the company. And by that time they're usually loooong gone
 

Rent Free

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Cars are not profitable this is Merica we all drive SUVs and Pickups.

Second. Ford didnt take a bailout when GM and Ford did LOL. Guess theyve treaded water long enough?

But but the economy is great! How can they be struggling?

There is so much more to this I think the auto industry sales wise is the bubble. Vehicles are way to expensive and people are allowed to borrow 84-120 months.

Because fuck it sign and drive.

Upside down debt for everyone!
 
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Flyn

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With constantly rising prices, car companies had to reach this point sooner or later. They almost seem to have decided to sell to the top 10% who can afford new cars rather than the 90% who will never pay $50K or more for a car.

With crazy depreciation, why would most people spend $50K or more on a new car/truck when they can buy one that's 2-3 years old for much less? Down here I see a LOT of 10-20 year old cars that people keep on the road for much less $$ than a new car payment would cost.
 

FirstWorldProblems

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I really think the main problem here is Ford's decision making, with the union being a smaller part of a huge issue. Most line workers make ~$20/hr or less nowadays, and ford has invested heavily in mexico where labor costs are dirt cheap. Hell for a while the starting pay was somewhere around $14/hr for their US line workers.

It boggled my mind when Ford invested over $1 billion in the plant south of Chicago, ever since then all you read about is the poor quality and the botched explorer launch. Why the f*** would you invest that much money in a plant with an expensive, poorly performing workforce in an expensive state. I think they made a major mistake there.

IDK about you guys, but I literally never see new explorers on the road
 

FirstWorldProblems

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They are everywhere. My brother in law just bought one. Hoosiers don't drive them because built in Illinois. :bowrofl:
Interesting. I see the previous model all over the place, but not the new ones.

Regardless the launch was publicly botched, i'm sure it cost them A LOT of cash
 
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