Cart (0)
VIDEOFord Joins Bailout Parade?
Brief scrutiny of today's headlines.
 |
|
Ford (F), the only US automaker not currently being propped up by federal loans, may have to contribute $4 billion to its ailing pension fund. That's cash the carmaker dearly needs to stay afloat, given abysmal auto sales from the US to Japan and everywhere in between.
According to Bloomberg, the company reported a loss of $14.3 billion for fiscal 2008 and earler this week drew all of a $10.1 billion credit facility.
As the stock market has tumbled, Ford's pension grew deeper in the whole. Future obligations now outweigh the value of it's assets and the company may have to pony up the difference. Some fear Ford's need for government assistance is inevitable, its cash troubles showing no signs of easing.
Ford is shopping around it's Volvo unit to raise capital, and is said to be in talks with China's Geely Automobile Holdings about a potential deal.
With General Motors (GM) and Chrysler already on the government dole, and once-mighty Toyota (TM) struggling to ofload cars onto cash-strapped consumers, it's a rough time to be in the business of selling cars.
Nor is it a great time to be guaranteeing pensions. The Pension Benefit Guarantee Corp, a quasi-public entity that backs corporate pension plans in the event they fail, estimates that collectively, American pensions have a $46 billion shortfall.
About half that deficit comes from firms connected to the auto industry.
This new economic stimulus package had better work.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
