Ford Motor Co considers going private

My apologies if this has been posted, but I didn't see any topic and did try a search.
[Actually, I find it hard to believe this wasn't already posted!]

Although I admit to not following business news all THAT much, I cannot remember a publicly traded company ever going back to being privately held. Certainly not anything as big as FoMoCo.

Why would Ford's consider such a drastic move? Certainly it would give them time to restructure and it would be out of the public spotlight. It would allow for a new management team without the worry of shareholders.
Does this signal the end of the line for William Clay Ford Jr?

Ford Motor is considering taking the company private, a move that could give the ailing automaker time to restructure operations outside the glare of critics, a source with direct knowledge of the discussions said Wednesday.

"The family is willing to look at anything," said the source, who didn't want to be identified because the discussions are ongoing. "A lot of different scenarios are being gamed out."

With Ford's shares trading around an anemic $7.76, going private could cost interested parties as little as $13.34 billion.

~~~~~~~~

"The assets are tremendously undervalued," said David Cole of the Center for Automotive Research. A private equity firm could be eyeing a future share price of $20 to $40, he said.
www.usatoday.com...

Other sources:
marketwatch.c om
Ford Motor chairman says automaker is open to forming alliances


[edit on 24-8-2006 by DontTreadOnMe]

It gives them the option of making massive changes that will cost a lot of money without having to answer to public shareholders and worry about the market.

If Ford is to survive then they need massive change. Good for them.

But I thought they did very well on the stock markets lately.

They are not hurting that bad at least in other markets outside the US.

One thing capitalism does very, very well is punishing bad behavior. You'd think they would have learned from the oil shocks of the 1970's, but there there they are with product mix that could not be more poorly suited to market conditions.

The dopes thought they could build high profit 15mpg, leather coated, mommy barges forever. Meanwhile, well run companies like Honda and Toyota continued to develop and build well made efficient cars.

If Ford did go belly up (they won't) it would be a potent object lesson for GM.

Originally posted by Number23
The dopes thought they could build high profit 15mpg, leather coated, mommy barges forever. Meanwhile, well run companies like Honda and Toyota continued to develop and build well made efficient cars.

Not true.

1985 Honda CRX HF 52 mpg city and 57 mpg highway.

2005 Honda Insight 60 mpg city and 66 mpg highway. (2006 marks the last year for this somewhat unpopular model. The next best is the Honda Civic Hybrid at 49/51 a step down from the numbers of 20 years ago.)

20 years + fuel injection + Hybrid tech + lightweight aluminum body and there is only a 10 mpg difference. (+/- a few MPG as the EPA test changed a bit)

Honda's 2005 Corporate Average Fuel Economy 29.2 mpg

In 1985 the number that all manufactures had to hit was 27.5 mpg

As you see even the imports are dropping the ball here.

Originally posted by marg6043
They are not hurting that bad at least in other markets outside the US.

huh? I didnt think there were very many foreigners that purchased american automobiles except maybe for a collectors item or something. American automobiles are expensive to begin with and when you add the tariffs imposed by other countries, they dont make good cars for the common person in other countries.

kind of like how if you buy a mercedes here in the US it is generally expensive but if you buy one in europe it is significantly cheaper.



[edit on 25-8-2006 by XphilesPhan]

Originally posted by XphilesPhan

huh? I didnt think there were very many foreigners that purchased American automobiles except maybe for a collectors item or something. American automobiles are expensive to begin with and when you add the tariffs imposed by other countries, they don't make good cars for the common person in other countries.

They don't build sell/American cars overseas for the most part. They have their own line of cars for different markets. Look at Ford UK's current models The only ones there that can be called an American car is the Ranger and their Fusion (called Freestyle here). We recently got the Mondeo imported (Ford Fusion and Mercury Milan) here and their current Focus is a generation newer than the one sold in the states.

BTW another vote for an automotive forum.

there are reports in the uk media today stating that ford may sell of Jaguar and Land rover to JCB, i believe that since these two companies have been owned by ford they have been under utilised and loosing money?

I think if I was a member of the Ford family, I'd support this too. It seems incredibly cheap now, and as a private company they can turnaround much faster than as a publically traded firm. The only downside is there would less chance of a government bailout if things really get bad.

Originally posted by Cug

Originally posted by Number23
The dopes thought they could build high profit 15mpg, leather coated, mommy barges forever. Meanwhile, well run companies like Honda and Toyota continued to develop and build well made efficient cars.

Not true.

1985 Honda CRX HF 52 mpg city and 57 mpg highway.

2005 Honda Insight 60 mpg city and 66 mpg highway. (2006 marks the last year for this somewhat unpopular model. The next best is the Honda Civic Hybrid at 49/51 a step down from the numbers of 20 years ago.)

20 years + fuel injection + Hybrid tech + lightweight aluminum body and there is only a 10 mpg difference. (+/- a few MPG as the EPA test changed a bit)

Honda's 2005 Corporate Average Fuel Economy 29.2 mpg

In 1985 the number that all manufactures had to hit was 27.5 mpg

As you see even the imports are dropping the ball here.

The 85 CRX barely weighted 2000lbs. Due to today's safety regs It's is practically impossible to build a car that light. The lightest car you can buy in the US is the Lotus Elise, it's the size of clown car and weights about 1900lbs, BUT it doesn't meet US crash and safety regs and Lotus was forced to secure an exemption.

Cars a whole lot safer and more crash worthy than they were twenty years ago, but that safety doesn't come free.

I may be wrong but.....The Ford family and foundations still exert total controll over the company, publicaly traded or not.

As ahedge against losing control of the company in and around the great depression and created a whole different class of shares that held huge voting rights. many were given away to the Ford Foundation etc.

That may have changed and I admit Im no fan of the old Found On Road Dead

Originally posted by djohnsto77
The only downside is there would less chance of a government bailout if things really get bad.

And heaven help us if Ford and GM seek federal $$$ to bail them out.
Is this something the Government should even be considering? I know for a fact that the Democratic Governor of Michigan is saying she thinks the government SHOULD bail them out if needed, but she is trying to get re-elected.

Do privately run companies run in a more efficient manner? Or are they just immune from stockholder scrutiny?
Or does it just depend?
I assume there are corporate laws that do NOT apply to privately held companies?

Originally posted by DontTreadOnMe

Originally posted by djohnsto77
The only downside is there would less chance of a government bailout if things really get bad.

And heaven help us if Ford and GM seek federal $$$ to bail them out.
Is this something the Government should even be considering? I know for a fact that the Democratic Governor of Michigan is saying she thinks the government SHOULD bail them out if needed, but she is trying to get re-elected.

Well it happened with Chrysler...but now the Germans own them!

[edit on 8/25/2006 by djohnsto77]

True, dj, but that was another time and another economy.
And, I guess the subject of continuing government bailouts is the topic for another thread
Don't forget the guy that Chrysler hired is the guy Ford fired

Which still makes me wonder why go private?
It seems to me the Ford family already has a poor track record deciding who will run their company. They fired Iacocca, Nasser and how many others. Now, Bill ford Jr is in and clearly is not the brightest business brain.

Originally posted by XphilesPhan

kind of like how if you buy a mercedes here in the US it is generally expensive but if you buy one in europe it is significantly cheaper.
[edit on 25-8-2006 by XphilesPhan]

No, no, the markets outside the US is on parts, you have to understand that just becuase you buy American per say it doesn't mean is all American made. . . is mostly assemble in America but with foreign parts.

GM, Ford and others keep outside markets on parts.

Well it seems that last month ford was asking the US government to get more involve with the America automobile industry.

I guess they were asking the government to show more control when it comes to tariffs, foreign car makers that are inundating our markets and to give more incentives and tax credit for cars that work on biofuels.

Even calling the oil companies to help.

For a company that spend 7.5 billion a year on research and development they most no be hurting that much.

Also they complain that the US is inundated with foreign cars and that they own 40 percent of the US markets but only employ 20 percent of workers.

It seems that while cars may say Made in America most of the parts are not . . .

So the profits of design and engineering are not in America. The profits from the sales of these cars are not spend in America either.

I buy American cars GM and Ford so at least I tried to support American cars.

But when you are to get parts for cars they are mostly foreign parts the ones that are lest expensive.


[edit on 25-8-2006 by marg6043]

Originally posted by Number23

The 85 CRX barely weighted 2000lbs. Due to today's safety regs It's is practically impossible to build a car that light. The lightest car you can buy in the US is the Lotus Elise, it's the size of clown car and weights about 1900lbs, BUT it doesn't meet US crash and safety regs and Lotus was forced to secure an exemption.

The Honda Insight is 1850lbs with the manual trans, 1975lbs with the CVT, and is just a tad larger than the CRX. That's why I used it for comparison.

It's not hard to build a light safe car, but the public dosn't want them. That's why the Japanese makers are going to be just as much in a bind as the US makers.