Ford Had a Better Idea: No Bailout

Government dependence breeds mediocrity.  Ford made the right choice by refusing the bailout, and instead chose to address the root cause of their problem by improving how their company was managed.  They aren’t perfect, and they still have a union problem, but they are turning a profit WITHOUT GOVERNMENT HELP.

Our country might have a chance of surviving if we can keep from adopting the ugly baby of democrat healthcare reform, prevent the destruction of our sovereignty with the signing, ratification, and adoption of the Copenhagen Treaty or any other cap-and-trade scheme, and if we can turn back what’s left of the first “stimulus” and prevent a second.

That’s just to prevent financial ruin.  Don’t forget about the right to keep and bear arms, and freedom of speech.  They are all under assault, and they all relate to one another.

If you pound your guns into plowshares, you will plow for those who didn’t.  And you will do it in silence or be shot.

UAW-Bailout


http://www.businessandmedia.org/printer/2009/20091104140137.aspx

 

Ford Had a Better Idea: No Bailout

As U.S. car manufacturer ‘stuns’ Wall Street with 3Q profits, some media forget to report Ford didn’t take government cash.

By Julia A. Seymour
Business & Media Institute
11/4/2009 3:16:04 PM

Ford Motor Company took everyone by “surprise” Nov. 2, when it announced nearly a billion dollars in profit for the third quarter of 2009. The company also said it would be “solidly profitable” by 2011.

CNN repeated the announcement on Nov. 3 “American Morning,” saying, “Turning now to the Big Three in Detroit, Chrysler extends its buyout offer to more than 20,000 employees while General Motors is still trying to restructure spending billions of bailout dollars, but Ford – which didn’t take any cash from Uncle Sam – is back in the green again, posting a profit of nearly $1 billion for the third quarter.”

The announcement was big news, but what should have caught more journalists’ attention was the fact that Ford managed to turn things around without the help of a federal bailout the very bailout reporters promoted in 2008 and 2009.

Yet, several shows including all three networks’ morning programs, CBS “Evening News,” CNN’s “Anderson Cooper 360,” and MSNBC News Live all left out that crucial piece of information Nov. 2.  (Now there’s a surprise.  Do you really think the media formerly known as mainstream would ever eat crow admitting they were wrong, especially about something that cast shadows on their liberal agenda or that of Obama?  If you think they’re that honest and objective, you’re smoking crack.)

But that Nov. 2 report, the “Evening News” found room to include union complaints against Ford, quoting UAW’s Gary Walkowicz: “I think people are angry and fed up with concessions. We’ve dealt with concessions year after year for the last five years. I people – think people got to the point of saying, ‘Enough is enough that’s it.’”  (Again, liberal Obama agenda.  Ever since the Obama coronation there has been one union payoff after another.  Aside from poor management, the UAW is the single biggest reason that American auto manufacturers have lost their competitive edge.  They have bled the auto companies dry without adding a commensurate amount of value to the process.  It was very telling when Government Motors and Chrysler shut down production for an extra couple of weeks over Christmas.  It cost them more to produce the product they are in business to produce than it did to produce nothing at all.)

One year ago, the network news media avidly supported a federal bailout for the Big Three U.S. auto companies and ignored union responsibility for lack of competitiveness.

“GM may not make it without help, and others may have to merge,” declared “Nightly News” anchor Brian Williams in November 2008. “If just one of the Big Three were to fail, an estimated two and a half million jobs might be lost.”

ABC correspondent Chris Bury suggested on Nov. 11, 2008 that it was a matter of fairness, after all, the banks had already been bailed out: “After riding to Wall Street’s rescue can the government just say no to American automakers that are bleeding cash by the billions.”  (Yes they could have said “no,” and they should have said “no.”  They should not have bailed out the banks either.  By rewarding poor performance and bad behavior, you do not get better performance and good behavior.  You get government dependence and lack of competition.)

Between Nov. 1 and Nov. 18, 2008 the morning and evening shows of ABC, CBS and NBC aired 31 stories with a pro-bailout tone, which was almost three times as many positive stories as balanced stories – only 12. Only one story, on ABC’s “Good Morning America,” presented an overall anti-bailout tone.  (More proof of the liberal Obama media bias.)

According to Reuters, GM and Chrysler received “roughly $64 billion in direct aid” from the government. Since then both companies have struggled. Chrysler saw sales fall 30 percent in October 2009, while GM saw a slight “bump” in sales of 4.7 percent the same month.

The media promotion of an auto bailout did not reflect public opinion. Back then 49 percent of Americans were opposed to an auto industry bailout and 47 percent were in favor, according to Gallup.

But according to Rick Newman, chief business correspondent for U.S. News and World Report, anti-bailout sentiment might have been exactly what helped Ford rise to profitability.

“[T]hey’ve taken market share from GM and Chrysler. Clearly a lot of people who wanna buy a domestic car, but were disgusted by the auto bailouts went over to Ford,” Newman told CNN’s “American Morning” Nov. 3.

NBC “Nightly News” and “World News” also indicated Nov. 3 that Ford’s decision not to take the bailout improved the public’s perception of the company and “richly rewarded” them.

Cash for Clunkers gets credit, Mullaly rarely gets rebuttal

Nine network and cable mentions of Ford’s successful quarter all credited the government’s Cash for Clunkers (CARS) program, but 77 percent of those reports (seven of nine) didn’t include Ford’s rebuttal that the company would have seen third quarter profits even without the trade-in program.  (…more bias.)

CEO Alan Mullaly said that the company would “absolutely” have profited even without cash for clunkers. “It was a good stimulus,” Mulally told Automotive News after Ford announced a $997 million quarterly net profit. “But the real strength of the third quarter is based on the strength of our product line improving.”

Automotive News reported, “CFO Lewis Booth said the federal government’s clunkers rebate program didn’t lead to an increase in Ford’s third-quarter wholesale sales. Instead, Ford ran dealer stocks down.”

But broadcast and cable news gave credit to the CARS program anyway, keeping its theme of promoting the government giveaway.

In August 2009, all three broadcast networks lauded the program calling it “wildly popular,” “too successful” and a “victim of its own success.” The networks also cited proponents of CARS nearly three times as often as critics in stories citing experts.

The $1 billion trade-in scheme burned through its entire 14-week budget in one week’s time, prompting the Senate to allocate another $2 billion in taxpayer dollars. Still, networks heaped praise on the clunker program. CBS “Evening News” anchor Katie Couric teased on Aug. 3, “[S]ales reports out today show the Cash for Clunkers program gave U.S. automakers a much-needed jumpstart.”

Union Dues

One major problem facing all three domestic car companies is the auto unions and their legacy costs.

When the networks were busy promoting a bailout of the auto industry in 2008, reporters were also conveniently ignoring unions as one of the reasons the industry was in trouble. Union contracts have put U.S. manufacturers at a distinct disadvantage compared to foreign auto companies that build cars in the U.S. But out of 44 stories in November 2008, only 4 pointed out the union problem.

Instead of blaming the unions, reporters blamed the overall U.S. economy for slumping auto sales.  (The economy contributed, but like the airlines after 9/11, the auto-maker’s poor management is the primary reason they were not in a financial position to weather the economic storm.)

“With sales plunging 35 percent in October alone, the auto industry is reeling from the nation’s biggest financial crisis since the 1930s,” CNBC’s Trish Regan said on the Nov. 8 NBC “Nightly News.”

But Daniel Ikenson pointed out on the Cato Institute’s Web site that unions are probably more responsible for Detroit’s problems than the media’s scapegoat of a generally bad economy. Those foreign nameplate manufacturers that sell in the United States “face the same contracting demand for automobiles as does the Big Three,” Ikenson wrote. “The difference is that these [foreign] companies have a better track record of making products Americans want to consume and are not seeking federal assistance.” (And there lies the primary difference.  The disparity will only increase as Gov-ment Motors is forced to make the cars that Obama wants instead of what consumers want.  Communism.  Marxism.)


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One Response

  1. I’ve always wondered why the Unions are seemingly anti business. The health of the very company’s that they work at, notice that I didn’t say ‘for’, is what is needed for their employment to continue. Is it all just about jealousy and apathy? It’s always so confusing. They have what they need now so to heck with what happens in the future. I’m sure that now the spin on Ford will be something like ‘Greedy Corporation making obscene Profits’. The only way to have Socialistic equality is to lower the standards of the producing sector to raise the level of the apathetic and lazy. Somehow I think that the Union leadership hasn’t lowered their income though.
    I digress, quite a lot of good information in one place. Well said.

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