Forbes's Jerry Flint points out an important difference between Ford and the other two Detroit-based automakers: Ford doesn't need a federal bailout:
Long run, Ford has the ability to grow. For the past two months the Dearborn, Mich., manufacturer has held its own in share against the prior year, while the others slipped. The company even picked up share in November, to 16.4% of the industry sales versus 15.4% a year before. This is a good sign. If GM downsizes, Ford could end up bigger than GM in just a few years...
If Ford could come close to Toyota or Honda in selling small cars, it would make lots of money. The same goes for its coming Fiesta, where I think Ford needs to sell 300,000 of these subcompacts a year in the U.S...
Pick-up trucks and sport utility vehicles are still profitable, too. This may not please environmentalists but it is a plus for Ford...
One more advantage: Washington is still battling over a bailout package, but Ford's two domestic rivals may have to report to a "car czar." That will not help them. In fact, if this person turns out to someone like Congressman Henry Waxman or one of his friends, GM and Chrysler could face ruin in 90 days. If so, Ford could pick up the pieces.
Ford's management will undoubtedly consider carefully how best to enhance the company's financial outlook. It may be that taking a cheap federal loan makes great business sense, and that the company would suffer from running afoul of the federal car czar. That might lead the company to follow GM and Chrysler into the semi-nationalized car program.
But Ford management might decide that the company can expand market share by pursuing its own business, unencumbered by 'help' from DC. As Forbes points out, trucks and SUVs remain the most profitable models. But as long as GM and Chrysler remain under the federal umbrella, they will be under pressure to reduce that business in favor of the green cars that Obama, Pelosi, Reid, and Barney Frank regard as the wave of the future.
If Ford remains independent, it's hard to imagine that it won't do much better than the other two. That will make it harder to justify the federal support for GM and Chrysler, and will make it harder to make those companies viable in the long run (as Ford builds market share).
