Ford Bets the House!

[Admin]

It puts assets on line to secure $18B in financing

Originally Posted by Bryce G. Hoffman - The Detroit News

Ford Motor Co. is going all in on a bet-the-company financing strategy that will put virtually all of its U.S. assets - including factories, office buildings and technology - upas collateral in a multibillion-dollar credit deal designed to buy time to execute a North American restructuring.

The struggling automaker hopes to obtain $18 billion in financing to fund its turnaround and shore up its liquidity as protection against unanticipated events, such as a recession, the company said in a statements Monday.

The financing will include up to $15 billion in secured loans, which will be backed by most of Ford's domestic assets, as well as all or part of the stock it owns in subsidiaries such as Ford Motor Credit Co. and Volvo.

This is the first time Ford has put its assets up as collateral. Doing so gives access to much-needed funding, but also translates into a big increase in debt-servicing costs. More critically, the company's future is on the line if it fails to execute a turnaround.

[Admin]

This is really sad to see, I hope Ford doesn't go under!

I always wanted to work for the big three, either Ford, Mopar, or GM. Doesn't look like that will ever happen. Unions are starting to go out the door and high paying jobs are less seen throughout Michigan and the country.

[defln67]

sry eric, im not being smartass, im only 17 so i dont really know much about financial stuff, um. . . does that big long post mean that fords borrowing 18 billion dollars and putting everything on the line?? if so that is sad. i feel dumb now

[Admin]

Originally Posted by defln67

sry eric, im not being smartass, im only 17 so i dont really know much about financial stuff, um. . . does that big long post mean that fords borrowing 18 billion dollars and putting everything on the line?? if so that is sad. i feel dumb now

Yep, they are pritty much just taking out loans that will put them in debt big time. I think Ford is going to have a miracle to get out of this one!

[defln67]

dang thats sad, im not really a ford fan but. . thats one of our big 3. . i hope a miracle happens