Can anyone explain to me how Ford can be going bankrupt?

[Rosemary2205]

3 months ago they paid out 10 cents a share and just in the last couple weeks they paid out 5 cents a share. Now I realize that's extremely low but the point is they still have profits to pay stockholders. If the company was going bankrupt how can the shareholders be getting paid?

[Kagemusha]

1. Because "bankrupt" is a fuzzy term and can mean more than one thing

If we're talking insolvency, they wouldn't pay out a penny (per share). If we're talking "protection from creditors" for restructuring and strengthening, the threshold is much higher.

And "going" bankrupt isn't the same as being there in either case.

[loves_dulcinea]

17. yup.

they also probably want to shrug off pernsioners.

[sui generis]

2. drive by any CarMax for your answer

Late model Ford F2500000 trucks piled on Explorers piled on Expeditions piled on Excursions piled on every other kind of truck and SUV and none of them moving.

tsk tsk

[Democrat 4 Ever]

3. Well, it is because of those damn stingy workers who demanded

a living wage and health benefits and a retirement. If it weren't for the communists pushing out the cars on the line management could give themselves even bigger bonuses and pay even higher dividends. Damn those workers - who said they deserved being able to raise their families in middle class luxury? :sarcasm:

[no_hypocrisy]

9. Damned trade unionists again! Terrorists!

:sarcasm:

[longship]

4. Lots of gas guzzlers that people are not buying.

[partylessinOhio]

5. That's what happens when you don't buy American!

I have never purchased a foreign car and never will.

[TommyO]

14. It's also what happens when

American manufacturers don't produce cars that people want to drive. Ford again has a car that I would consider buying, the Fusion (along with it's stablemates, the Mercury Milan, and Lincoln Zephyr), but I already have an older VW Passat that I'm not ditching anytime soon.

[CBGLuthier]

15. What the hell is a foreign car

Asian companes have plants in US while american companies close theirs and open mexican plants.

American cars are shoddy pieces of crap and the companies that make them need to either improve their product or go away.

I speak from 28 years of both domestic and foreign ownership. My 01 impala is the absolute last "american" car I will ever buy.

[HiFructosePronSyrup]

19. Mmhmm.

That's what happens when car companies keep making shitty cars for decades and survive only on faux customer loyalty.

[Warren DeMontague]

21. Pfffft.

You'll have the keys to my Corolla when you pry them out of my cold, dead fingers.

I don't buy an automobile out of courtesy- I want one that works, gets decent mileage, and is dependable. That's why I've stuck with Japanese cars for the past three decades. I'll consider buying an American car- scratch that, a car from an "American" company, like Ford- when they stop sucking so bad.

[SmokingJacket]

31. It's so hard to know any more...

Since foreign companies can have American plants and American workers, and American companies can have foreign workers, and both can have foreign or domestic parts...

Do you know of any cars that are made by American owned companies, made with American made parts, and assembled by American workers?

I can't even tell these days.

[ComerPerro]

6. according to RWers, its for two reasons

becasue they were attacked by unions, and because they are being boycotted by the RW because they, get this, have the audacity to think that homosexuals should be treated like human beings.

[leftofthedial]

7. because the stockholders and senior executives sucked money out of

the company like a vampire sucking blood out of a mesemerized bimbo

now, they have to deal with the reality that the corpse is dry and they make cars that can't compete in the world--bad gas mileage, weak features, mediocre (or worse) safety . . .

[ProfessorGAC]

24. A Tangential Cause

The real problem is that the powers within the company have done a woeful job of three things:

1) Innovation and development
2) Marketing strategies to feel out the consumer desire and maximizing the product line to meet those needs.
3) Cost minimization programs based upon day to day operational efficiencies and not on reduction in labor costs.

Those poor management schemes resulted in eroding market share and loss of consumer confidence. With costs not minimized, and market share falling, profits take a bath. Then finally, the massive infrastructure and overhead involved in the company, has resulted in huge depreciation costs and debt service on invested capital.

This is about bad management. Plain and simple.

The Professor

[leftofthedial]

26. Capitalism is all about bad management.

Without the transient benefits of the exploitation of some "free" resource and externalization of the biggest costs of doing business, capitalism would never even have gotten off the ground. As it is, it is in the process of sucking the entire planet down the crapper with it as it ruthlessly, psychotically and methodically destroys every resource it can identify.

[OneBlueSky]

8. corporate bookkeeping is a mystical art similar to . . .

the kind of stuff that Cris Angel, Mind Freak does . . . they can make the numbers jump and hop and slide and wiggle and hide and levitate, and make the final product come out any way they want . . .

kinda like the way BushCo handles vote counting . . .

[Sadie5]

10. I remember back when

this great grandson took over his responsibility for the company as he was next in line, reading a story about the dumb worthless decisions he was making at the time. The article said something about how he should step down back then, and that was at least several years ago. I too will not buy a foreign car.

[lectrobyte]

11. I suspect that once they get out from under those pension obligations,

they will re-emerge just fine.

[Nikki Stone 1]

13. Ah...

That explains it

[LeftHander]

12. SUVs.....nt

[warrens]

16. They can distribute revenues anyway they want

Give it to the shareholders, then say they're broke and go Chapter 11. And then get rid of pension obligations and suddenly they're rich again.

[aquart]

18. What is the complete compensation package for the CEO?

[Warren DeMontague]

20. Because they make shitty cars.. wait, scratch that- do they even MAKE cars

anymore?

I know they make monster jumbo trucks for short-haired dudes with penis size issues.

[izzybeans]

22. bankruptcy is the cool new business strategy.

It's a way of unloading pesky overhead like pensions and salary, while keeping big bank creditors and investors lubed up with capital.

[Deja Q]

23. When jobs offshore, nobody can afford the high prices. Symbiosis.

They strange themselves while strangling the rest of us.

It's rather like shedding an arm and a leg and not realizing that it's your own arm and leg you're cutting off. Bankruptcy is merely a form of cardiac arrest...

[Bake]

25. They're not all "shitty" cars

I have an '02 Taurus that has given me 73,000 comfortable and safe miles with very few problems, and gets 24-25 mpg on average. And it didn't cost me an arm an a leg. Before that I had a '94 Aerostar that I drove the wheels off. They're not all shitty cars.

Bake

[jazzjunkysue]

27. Because their cars suck? n/t.

[tom22]

28. Here is the actual answer from someone who

owns Ford stock: There is no chance that Ford will file for bankruptcy. none. nada. zip. Ford is controlled by a class of preferred stock owned by the family which accounts for a lot of the family's wealth. If the company were to go bankrupt it would take the family down with them and that isn't going to happen.
moreover Ford is in pretty good financial shape. According to their last quarterly SEC filing the company had nearly FORTY BILLION DOLLARS in cash and cash equivalents. Ford did just lower the dividend by half but they will start upping it again in a few years. Their legacy costs are much smaller than GMs and those numbers turn around and turn around fast beginning in 2010. Ford is in decent shape and is a couple of hit cars away from being a thirty dollar stock.

[leftchick]

29. WHY????

these babies sitting on lots across the across the country....

[onecent]

30. Where did you see that Ford could be going bankrupt?

I retired after 30 years in the sales division....and I get a pension AND medical coverage.

Please please please don't take this away from me.

[lectrobyte]

32. It's been in the news a lot lately... cutbacks, restructuring, etc.

http://www.summitdaily.com/article/20060908/NEWS/109080055

In July, Ford pledged to speed up and possibly deepen its North American turnaround plan. Ford's "Way Forward" plan, launched in January, calls for shedding 25,000 to 30,000 jobs and closing 14 plants by 2012 to help return its North American automotive operations to profitability.

The company may offer buyouts and early retirement packages to more of its production workers to reduce its hourly work force. Details on further cuts are expected after a Sept. 14 board meeting.

[tom22]

33. there is no chance of a bankruptcy.

The stock has actually been upgraded by several analysts within the last month.

[lectrobyte]

34. I believe you're right. From what I've heard, they are going pretty

good with Jaguar, Rover, etc., I think most of the bankruptcy speculation is probably more about GM, but with several relatives who work for Ford, I probably pay more attention when I see it in the news.