Ford goes into overdrive
With GM‘s share price heading toward $1 and Chrysler close to consummating its shot-gun wedding with Fiat, Ford‘s raising $1.4 billion through the sale of 300 million shares puts some serious distance between it and the competition.
Having gone this far into the recession without government aid, Ford is making a big show of going green, consolidating its dealer networks and taking the kind of cost-cutting steps that GM is being chased into by the government and that Chrysler is hoping for from its merger with Italy’s Fiat.
If the restructuring moves weren’t enough, Ford chief Alan Mulally (smiling and clapping, left) made sure to hit the right PR notes when detailing how the fresh cash would be used: possibly funding a larger portion of Ford’s retiree obligations.
Given that GM’s latest do-or-die deadline with the Obama administration autos task force is just a couple weeks away, Ford’s going to market now serves more to separate it from its struggling rivals than to address any real funding needs. The company said just last week that its restructuring was on track and that it had sufficient liquidity to fund it, including converting plants and investing in future products.
It’s always wiser to approach the market from a position of strength, so while Ford may not appear to need the money right now, the sorry state of the competition may have made the opportunity too good to pass up.
Deals of the Day:
* Ticketmaster Entertainment said it received the required approval from its lenders for its proposed merger with Live Nation, the world’s largest concert promoter.
* Shinsei Bank and Aozora Bank could announce their plan to merge as early as Wednesday, sources said, a deal that would bring together two money-losing lenders and create Japan’s sixth-largest bank.
* Executives at Citigroup Primerica Financial Services unit are looking to sell the division’s marketing arm, Bloomberg said, citing four people familiar with the matter.
* Printing services provider R.R. Donnelley & Sons Co said it offered to buy the assets and properties of Quebecor World for about $1.35 billion in a cash and stock deal to expand into Canada.
* Mitsubishi UFJ Financial Group Inc’s trust banking unit has decided to cancel its planned $257 million purchase of Citigroup’s Japanese trust bank, Japanese newspapers reported.
(PHOTO: Ford Motor Co. President and CEO Alan Mulally addresses the crowd during a news conference in Wayne, Michigan May 6, 2009. REUTERS/Rebecca Cook)