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The Detroit Bailout: Ford Tough

I'll have more to say about the restructuring plans the Detroit Three submitted to Congress on Tuesday--or, more likely, I'll outsource that analysis to people who know more about the subject than I do. But, for now, I wanted to point out a wrinkle in the industry's crisis that far too few writers (myself included) have acknowledged. The three U.S. automakers are not in the same situation.

While it's difficult to get a precise read on Chrysler's status, because--as a privately held company--it doesn't release as much information, we have a pretty good idea about the other two. General Motors really does seem to be on the verge of collapse. Without some infusion of cash, they won't last far into 2009--if, indeed, they make it to the new year at all.

Ford is in better shape. They were the first to take restructuring seriously a few years ago and, as a result, their transformation is farther along. They're a leaner company that, overall, makes better cars. Their balance sheets reflect that and, not coincidentally, so does their loan request.

Ford seeks a $9 billion line of government-provided credit. But Ford is not sure how much--if at any--of that credit it will actually need to tap. If the economy doesn't get worse, Ford says, it might even make it through 2009 on its own. Contrast this with GM's request: $12 billion in loans plus an additional $6 billion line of credit. They're hoping to get $4 billion of that right away, just to keep the factory doors open for the near future.

Of course, if GM does go under, Ford could, too--because the companies depend on the same suppliers and most of those suppliers, who face their own financial problems, probably couldn't survive. That helps explain why Ford, despite its relative health, still wants a rescue.

--Jonathan Cohn