DealZone

Ford goes into overdrive

AUTOS-FORD/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.

Senator, can you spare a dime?

The Detroit Three automakers go to Washington today, armed with fresh restructuring plans they hope will convince federal lawmakers to open the bailout spigot. For General Motors, Ford and Chrysler the stakes couldn’t be higher.

GM has been reviewing its already revamped business plan and may take steps that include dropping or selling off the Pontiac, Saab and Saturn brands. Ford, seen as the strongest bet to survive of the three because of its better cash position, is considering the sale of Volvo. And Chrysler, seen as the most vulnerable of the bunch, finds itself having to spell out the reasons it needs federal funds even though it’s also looking to hook up with foreign automakers.

As IHS Global Insight analyst Aaron Bragman says: “Just as General Motors is too big to fail, Chrysler is too small to survive on its own.”