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: Ford's Unsung Hero

09-09-2010, 01:06 PM
Ford's Unsung Hero
Forbes Magazine (
By Joann Muller
September 9, 2010

Ford Motor Chief Executive Alan Mulally gets most of the credit--deservedly so--for steering Ford clear of bankruptcy in 2009. But it wouldn't have been possible without the knife-juggling capital management of Lewis Booth, 61, who became Ford's chief financial officer in 2008 after 30 years with the company. His big challenge now: what to do about the $27 billion in debt on its books. Booth met recently with FORBES' Detroit bureau chief Joann Muller to talk about fixing Ford's balance sheet.

FORBES: GM was able to unload its debts in bankruptcy court and now plans to go public. Meanwhile, Ford, which didn't seek a bailout, is paying $2 billion a year--twice as much as GM--just in interest. Is that fair?

Booth: We don't talk about fairness. I don't think anybody thinks bankruptcy is a good business process. About the only disadvantage of not going bankrupt is that we have more debt than some of our competitors. But we have spectacular benefits. Those benefits are the reason we've generated strong profits and strong operating cash flow. That in itself--having a strong recovery--will accelerate our debt paydown.

Full text at the link

09-10-2010, 03:41 PM
Yes, I know Ford currently has more debt than GM or Chrysler, but I think they're better off for not going into bankruptcy. They've certainly gained the respect of a significant percentage of the American public, and they continued to invest in product development, whereas toward the end of the "old" GM, it seems pretty apparent they cut way back on, and even froze some R&D programs, which they're just now starting to revive.

And in terms of current and future product, I just think Ford's lineup is much stronger overall. Yes, GM has a few star players. But generally, they're higher-priced, lower-volume models. The fact that Ford's product strength is spread more evenly across its model range will pay off.

09-10-2010, 04:47 PM
Ford does not have more debt than GM.