According to Ford, it is better to be in bankruptcy than out of it. Ford alleges that the government's support for GMAC allows it to access cheaper financing than Ford can get through the TALF. In advance of a June 10th hearing before the Senate Banking Committee, Michigan Republican Mike Rogers voiced some concerns about just how perverted the General Motors rescue has become.
Ford is the healthiest company in the intensive-care unit right now, and you don't want to push them over the edge. I don't want the third company to go into bankruptcy because the government put them there by making them artificially uncompetitive.
The notion of the government's hand leading to artificial conditions in the auto industry is not restricted to Rogers alone. Texas Republican Jeb Hensarling has apparently thought about this issue before and may have come up with some slightly nefarious solutions for Ford.
It's very difficult to compete with somebody who can print money and, legally, only Uncle Sam can do that.
Ford Tells Lawmakers Rival GMAC Gets Cost Advantage [Bloomberg]
Posted by guest , Jun 08, 2009 4:51PM
ZZZZZZ...
Posted by guest , Jun 08, 2009 4:52PM
Quite frankly Greg this is downright embarassing.
Posted by guest , Jun 08, 2009 4:59PM
Blame Ford's management. They were playing a dangerous game pretending they were above all the doom scenarios that are plaguing the industry. Bad move on their part.
Posted by Bulging Bracket , Jun 08, 2009 5:08PM
You've seen this before in the airlines. It's somewhat amplified with the government backing GM & Chrysler, but any industry infiltrated by big labor gets completely screwed up once enough firms go through Chapter 11.
Unionized industries should be forced to Chap 7 instead of 11. Chap 11 in that situation just creates a beggar thy neighbor dynamic of repetitive bankruptcies - something we are seeing in the airlines.
Posted by Isabela , Jun 09, 2009 6:42AM
Credit cards are far more the devil's workshop than idle hands. Credit cards are on of the leading causes of bankruptcy filings, and a lot of people are sick of dealing with them if they need to borrow money, and more people are forced to use them as the unemployment rates rise. There is a new raft of credit card rules, and they restrict the kinds of interest charges that can be applied, limiting the kind of credit card company abuses that they are known for. The card companies are already in a big enough fix, as the recession has cut into their ivory back scratcher funds, and Americans are looking to payday loans instead of credit cards. For further information, check out at: http://personalmoneystore.com/moneyblog/2009/06/04/credit-card-company-comeuppance/