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Mercury C557
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Discussion Starter · #1 ·
didn't see this posted...

businessweek.com - Bill Ford on Tipping Points and Thinking Small
by Maria Bartiromo

MARIA BARTIROMO:
Bill, the company reported the worst single quarter in history last week, a loss of $8.7 billion. What's happening, and why did we see such a loss?

WILLIAM CLAY FORD JR.:
We had a good first quarter, we made money, and we thought we were on our way. Even though fuel prices were rising in the first quarter, we didn't see a big change in customer behavior. But when gas crossed about $3.50 a gallon, that was the tipping point. And, of course, we had no idea where that tipping point was going to be. Literally overnight people stopped buying trucks and big SUVs and came into the dealerships demanding the smallest and most fuel-efficient vehicles they could find, and the fall-off [in sales], therefore, was very dramatic. What you saw in the second quarter was not only the result of that but also the result of falling residual values of trucks and SUVs.

continued... three pages
 

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Mercury C557
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22,734 Posts
Discussion Starter · #2 ·
one part I found surprising [bolding+underlining is mine]

M.B.
Does Ford have enough liquidity to see it through this current crisis? Sure, Mulally comes in and leads this recapitalization and raises a lot of money, but it looks like you're burning cash faster than you can recover it in sales. How worried are you about the worsening economy thwarting the recovery plan?

W.F.
Obviously, the economy is not where we need it to be, and we project a rather slow industry through the rest of the year. And it's hard to see next year with any great clarity at this point. But at the end of the second quarter we had over $38 billion in liquidity. And so, as you point out, we did go out, just before Alan got here, and borrowed a ton of money. And our timing was excellent because we did it right before the credit market closed down. And we had that in place when I was interviewing Alan.
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guess I'd accepted the impression (posts/media) that Mr.M. had more to do with the loan than getting there in time to sign it < exaggeration
 
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