What many outside of this area and industry may not know is why it didn't need a bail-out. CEO Alan Mulally came here from Boeing in 2006 and almost immediately hocked everything in sight (including rights to the Blue Oval) as collateral on a $23.5B loan to pay for restructuring the company. He got that in just before the crash made such borrowing impossible. From 2006 through 2008, the company lost $30B. But the downsizing and the investment in great new products are finally paying off. After a huge payment last November, the remaining debt of $21B is now less than the cash on hand. Whew.
Keep in mind, though, that GM and Chrysler were able to cancel most of their debt through bankruptcy, so please feel free to continue rewarding Ford with your business.
I know the auto industry bail-out was not wildly popular outside this area, but please have some empathy. Given our over-dependence on a single industry, Michigan entered a persistent, one-state recession in 2000 and led the nation in unemployment for years before the rest of you joined us. We're a good, hard-working people, but this prolonged torture has been killing us. We are the only state that actually lost population since the 2000 census, as our folks leave in search of work. My own adult children left and will never move back. Our birth rate hasn't been this low since the 1870s.
I grew up in Maryland and have lived in Texas, Alabama, Florida, and Utah, and I can tell you that we are all more alike than we are different. So please don't vilify us for being on the ropes, any more than you would Illinois and California for their debt problems or Arizona and Nevada for their real estate crashes. We've all been hurting, and we all glory in the merest hints of recovery (at last!) that cheer us in this winter of jet-stream-hammered discontent.
4 comments:
Sorry your weather sucks. But glad Ford's future is looking brighter. Our recent tour of the Rouge assembly plant when we visited you was a real eye-opener. I regret they wouldn't let us photograph the actual line, but understand why.
As you've mentioned in the past, Michigan has had crappier economic times for longer than the rest of us. We look to you to lead us back to the good old days.
I've been meaning to talk to you about Michigan. My Jesus key chain from the Henry Ford broke this week. Great Arab food, but why can't y'all make a good key chain?!? This veteran is outraged! You're lucky I didn't write this in all caps.
I BET IT WAS MADE IN CHINA.
11 Feb 2011 update:
At the outset of 2010, Ford's total debt was $34.3B. That year, it earned $6.6B and cut that debt by $14.5B. Within a couple of weeks, it plans to cut that debt by another $2.98B, bringing the total owed down to $14.5B. That is, it is definitely getting out of the woods, thanks to increased sales. Thanks again!
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