Let’s take a quick break from the midterm elections and turn our attention to Ford Motors, an auto company worthy of praise. Ford just posted $1.7 billion in 3rd quarter earnings for 2010! There is no denying that they’re doing remarkably well (I’ve even looked into buying one of their cars!), and here’s the kick: they took no government bailout money in 2008. Remember the auto bailout? It seems so long ago at this point, but I can assure you it was a highly contentious package that NTU vehemently opposed. We did not feel it was the taxpayer’s responsibility to bail out private firms and further encourage the risky behavior and unsound business practices that helped create much of the difficulties within the automotive industry. We encouraged auto companies to restructure their businesses the way families have had to restructure their budgets and, guess what, Ford did just that. A January 2009 Yahoo finance article summarizes Ford’s restructuring quite well:
“They have excelled the other U.S. auto companies with strategic and smart marketing plans by facing the poor economic conditions and targeting the customers that buy their products. It appears Ford executives understand in order to maintain cash flow and save jobs, the existing inventory must be moved out so the auto and truck plants can continue working to produce new products.”
I’m not saying it was easy. It wasn’t. My granddaddy worked (for 45 years!) at the Norfolk, VA Ford plant that was shut down in 2007. Mind you, he had just retired when the plant closed, but all of his friends and co-workers were affected as well as many of my old neighbors. That being said, Ford did what they had to do, and now they’re reaping the benefits of smart, albeit difficult, business decisions.
The Associated Press ran a story this week that highlights the success of Ford Motor Company. The company’s market share is rising and they’re adding a considerable number of jobs for the first time in a long time. They’re also paying off their debt. According to the AP, "Ford has gotten its financial house in order after mortgaging its factories, blue oval logo and other assets four year ago to fund a huge restructuring. Ford paid off $2 billion in debt in the third quarter…That will put Ford's debt at $22.8 billion and cash at $20.3 billion. The company expects to end the year with as much cash as debt, a year earlier than it had forecast.”
Yes, Ford still faces challenges, but they have come a remarkable distance by implementing their own stimulus, free of government handouts. I’m proud to say that I’m the granddaughter of a former Ford employee and, yes, I’m still strongly considering purchasing one of their cars! Not just because the Blue Oval has become a beacon of capitalism, but for the reason that their product is among the best on the market.
Keep on trucking, Ford.