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My impression was that GM/Ford are, for investors, pension funds with a side-hustle making the odd car. But maybe this is out of date? Are the european manufact
by iguy 6y ago
My impression was that GM/Ford are, for investors, pension funds with a side-hustle making the odd car. But maybe this is out of date? Are the european manufacturers also like that?
- mywittyname 6y agoI wouldn't call them pension funds. Ford's total investments as a % of assets is pretty small, basically a rounding error. Now, you could absolutely call those two companies, truck manufactures with a side-hustle making cars, and that would be pretty accurate. The problem with Ford is they have a ton of debt and they are in a capital-intensive, highly competitive industry and they are one the first industries hit in the event of a recession. All car manufactures are essentially in the same situation. There's a reason this industry is rife with bankruptcies, mergers, and government ownership. Car companies all need so much capital to survive that they tend to starve very quickly. If Microsoft revenue went to $0 tomorrow, they could float on reserves for several years while they correct course. If the same situation occurred to Ford, they'd be gone by in a few months.