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.