Ford and GM's Credit Ratings Lowered to "Junk Status"

[Gimp]

http://apnews.myway.com/article/20050505/D89T6CAO1.html

 

[RedEB]

Damn, I have some Ford stock. To be honest, I really think this is a bunch of cr@p. Ford and GM will recover, these companies have withstood worse times and they likely will come out yet again. What surprises me is that Toyota is said to be the prospective #1 automaker in a couple of years. What a bunch of BS.
Ford will recover, and I plan on buying some more stock once it levels.

 

[aldive]

I sure am glad I dumped my Ford and GM stock last year.

 

[Stephen]

What surprises me is that Toyota is said to be the prospective #1 automaker in a couple of years. What a bunch of BS.

As much as you may dislike admitting it, Ford and GM are in a period of extreme financial turmoil, Toyota is not. That and ever increasing market share are the reasons market analysts have projected their move into the #1 spot. If you're objective and you look at the facts, that abundently clear.

I don't know, sure GM and Ford have whethered some hard times but the prospects were rosier than they are today...

 

[dtl 2k2 sport]

I work part time at a Toyota dealer in nova area, and I know that recently ford has released the ownership of Hertz Rental car program to ease some of the dead weight on their shoulders, along w/ cutting some of the money going into the motorsports programs, IE: nascar/ ect. Just alittle more sunshine to spread, sorry but I have alittle bit of info once in a while w/ this stuff, even if it's slightly unpleasent,

 

[Doug]

DETROIT, June 2, 2004; Reuters compiled and reported The
top-selling vehicles in the U.S. through May of 2004 as reported
by the automakers.
Total sales of the top 20 vehicles rose 1 percent or 22,667
units to 2,384,186.
Following is a list of the top-20 selling vehicles, ranked by
total units.
1 Ford F-Series pickup 358,034 328,134 1 +9.1
2 Chevy Silverado-C/K pickup 270,920 265,413 2 +2.1
3 Dodge Ram pickup 178,764 177,186 5 +0.9
4 Toyota Camry 176,022 170,531 4 +3.2
5 Honda Accord 158,081 163,059 3 -3.1
6 Ford Explorer 141,625 147,201 6 -3.8
7 Toyota Corolla/Matrix 139,669 142,466 9 -2.0
8 Honda Civic 136,234 127,979 8 +6.5
9 Ford Taurus 121,370 140,494 7 -13.6
10 Chevrolet Impala 119,530 112,570 13 +6.2
11 Dodge Caravan 105,715 110,486 19 -4.3
12 Chevrolet TrailBlazer 103,493 99,960 14 +3.5
13 Nissan Altima 99,183 80,411 15 +23.3
14 Ford Focus 96,312 100,943 12 -4.6
15 Chevrolet Cavalier 84,755 94,133 11 -10.0
16 Ford Escape 82,218 64,059 N/A +28.3
17 Jeep Grand Cherokee 82,201 74,629 18 +10.1
18 GMC Sierra pickup 81,871 75,070 17 +9.1
19 Ford Econoline 75,155 71,478 N/A +5.1
20 Ford Ranger pickup 73,300 91,845 10 -20.2

For such a ****ty automaker they certainly have a lot vehicles on that list..

 

[JGAMBLE]

it's not about having cars on a "best of" list. Both GM and FORD are in hard financial times. It has more to do with what the unions are demanding and some bad investments they've made in the past. Either way, economicly toyota is poised to take the #2 spot, and maybe #1 eventually. I don't wanna see it happen, but those are the facts at this point.

 

[Stephen]

Bear in mind Ford sells ALL the vehicles that made that list to fleets (governments, businesses in bulk, rental car companies, etc) at extreme discounts that the OTHER carmakers on that list don't do. For the private sales they offer sometimes 5 figure rebates that the OTHER carmakers on the list don't do. GM and Chrysler (to a lesser extent these days ) do the same thing.

So while they sell more units, they don't have the same profit margin. Just because you sell a lot of stuff doesn't mean you sell quality merchandise or sell it at a price that makes you and your company solvent. Trust me lol, I've been in sales and industry long enough to know people sell lots of stuff because its cheap and they sometimes sell it so cheap they don't even make a profit. Bill Ford himself has said that he plans on cutting the rebates the company has been offering just to keep their vehicles on that list because he recognizes that its not a true indicator of the quality of their products or the profitability of their sale.

Just for an example, the Explorer only out-sells the Grand Cherokee by 60,000 units but Jeep doesn't offer fleet pricing on the GC, my guess is the Grand Cherokee outsells the Explorer to private users. No question the GC is more profitable to Jeep than the Explorer is to Ford. The Econoline and the Taurus are all but exclusively sold to fleets, and probably 3/4 of F series sales are fleet sales (same with all those trucks though)

The companies themselves are no longer solvent, they can't make enough money to pay their obligations. Its come to the point where I personally believe that its going to be impossible for Ford or GM to reverse their position without having to give up ownership of part or all of the company to a foreign source, just like Chrysler had to do.

Just an analogy. If Ford were a person he would make $60,000 a year and have annual oblications of $90,000 a year that are projected t do nothing but RISE. If you figure out the money he would have to start making in order to MEET his obligations let alone get ahead theres no way he could ever do it, he would have to declare bankruptcy or have someone take some of his burdens off his shoulders.

GM is even worse off, aside from the fact that their debt is so massive they can't do anything but add to it every quarter their automotive division LOST money last year aside from the debt! That is, if the company weren't in debt at all it still wouldnt have made any money because their cars aren't profitable.

These companies are in serious trouble.

 

[SteveVB]

GM and Ford are basically big pension plans

The companies have obligations larger than they can cover, and a large part of it is for benefits for employees who dont produce anything for the company-retirees. Both GM and Ford will cut new workers, and close plants- reducing their competitive advantage andf future prospects. News today: GM closes plants and reduces workforce by 25,000. The unions won't be willing to negotiate on the retirees and reducing the medical costs to the company. Something like $1000 of every GM car and truck sold goes to retirement costs- thats a huge burden to overcome to make money and keep yourself solvent.

 

[TheFox88]

Well, personally i love toyotas and their durability (have an 84 corolla that has 234000 on the engine that still runs great) and unfortunatley niether ford or GM can match that level of craftsmanship. Not to mention that experts are saying that gas reserves are going to be gone in like 30 years or so. Ford and GM are only making larger vehicles and can't really compete with the Japanese car makers, fuel economy. (it's phenomonal afterall) Although i hate to see the big american car makers take falls, because alot of people could or already have lost their jobs. Just my 2 cents.