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Big Three Bailout: Ford Buffs Its Brand

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Every motivational speaker in the world knows the old chestnut about "crisis" and "opportunity" being the same word in Chinese. And although that isn't entirely true, one of the Big 3 is working hard to find the silver lining in all this mishegas: Ford.

Below deck, Ford's accounting and legal departments are surely scrambling to keep the ship upright, but in the bright, crisp air of day, its marketing and PR people are waging a different battle--one intended to polish the company's brand. In congressional panels and on the evening news, their reps keep saying:

"Oh, no, we're okay. We're just here to help our fellow American automakers by showing some solidarity. What is this 'money' stuff you keep talking about? We don't need any such thing."

Which could also be translated:
"Would you look at these two? Honestly, GM and Chrysler don't know what they're doing, the poor schmucks. Ordinarily, we'd love to see them tank, but since we're really nice guys and it's the holidays, we're asking you to give 'em a hand."

All that talk is intended to beef up the company's image. Like most branding campaigns, it's meant to change our perception of the company and our emotional response to it. So if all goes as planned, when we see the Ford logo in the future, we won't think "bloated" or "prideful" or any of the other Seven Dwarves; instead, we'll think "leadership" and "fiscally sound" and "ace design." Which should eventually translate into bigger sales and a stronger company, so we'll never have to go through this again. Right? -- Richard Read


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Comments (4)
  1. I think the main problem with the bailout is another moral hazard problem. If the Big Three are bailed out, then why not any other company? If we're in a depression, and many more companies will see red on their books, then they are going to come to Washington to lobby for a bailout. They also have many employees at risk of getting laid off and suppliers at risk of getting disrupted. Detroit gets a bailout, why not them?
    I'm scared about the sense of entitlement companies will erroneously have if Detroit gets a bailout.

  2. Very interesting and I too have wondered what's going on as Ford sits there - now I know or at least hope you are right!
    Responding to wheelscene, I think the issue is strategic. simply put Automakers put american industry on the map, and the current situation is a perfect storm of a rotten economy and 3 automakers who entered the storm with water already in the hold ( in transisition to higher tech vehicles and with $51billion in VEBA's hanging over their heads like the grim reaper. I support a bailout for Detroit because I think now the country is in such shape that we have to do it- but that does not mean we should not do it smartly. Chrysler is pretty much toast, GM has some potential and we need to come up with a fair plan that will take time. In the meantime? put the UAW and retirees onto Medicare now, cancel the Vebas' and let's see what that does to the bottom line.

  3. This is a tough issue and I really don't know what to expect. If the gov't is not willing to loan them the money it may be the best thing for them. GM will have to file chapter 11 and all of the goodies their former employees are receiving will go bye bye.

  4. A few facts:
    Ford doesn't need a loan because it mortgage EVERYTHING it had almost 2 years ago and has cash. It is in no better shape than GM.
    GM needs a loan from the government because no one is lending. GM as a business is doing fine in Asia, South America, middle east, OK in Europe. It needs money to keep operations going.
    In AL, Hyundai, Daimler(then also Chrysler...), Honda, Toyota got >665 Million in subsidies from the state to bring them there. They also have new factories, easy to be competitive.
    Finally, on why help them and not others. There are a few reasons, first and foremost because there is too much at stake. Fix it now or pay for it later... Then there is the fact that unlike other blue color industries, car manufacturers CAN and WILL make money building in the US. So why squander the last bastion of industry? Unless all we want to do is SERVE people... We need the car industry. Yes, it needs to be revamped, Wagoneer among others has to go, but this is not about dumping cash into bad companies, it's about providing a level field for companies that cannot compete with the present rules...

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