4 ms·

And if I recall correctly Ford was the only US vehicle manufacturer that did not request a bailout in 2008. That was impressive at the time and it made Ford lo

And if I recall correctly Ford was the only US vehicle manufacturer that did not request a bailout in 2008. That was impressive at the time and it made Ford look like solid well-run company that planned ahead.

bobthepanda 4y ago
It was a really well run marketing campaign, complete with clever nicknames (e.g. Government Motors) The truth is a bit murkier. The car division was not bailed out, but the financial arm did accept government assistance like all the other car loan companies.
dragonwriter 4y ago
IIRC, Ford explicitly said that if it hadn't been for the effect of the bailouts of an other manufacturers on shared supply chains, it would have needed a bailout.
- sitkack 4y ago
  Could you explain this with a couple sentences, I don't understand.
  - throwaway_4ever 4y ago
    Say GM and Chrysler weren't bailed out. Then they wouldn't be able to support the trade between other third party car parts manufacturers that rely on them. Those companies would lose economies of scale and/or go out of business too. Then wouldn't Ford be able to make their cars without those third parties and would need bailing out to not go bankrupt also.
  - pixl97 4y ago
    When dominoes start tipping they can all fall over.
  - HWR_14 4y ago
    Totally made up example (with easy to follow numbers): Let's say GM, Chevrolet and Ford all buy 12V car batteries from BatteryCo at the rate of 1,000,000 a year (each). BatteryCo has fixed annual costs of $3,000,000 and per battery costs of $1. Right now, Ford pays $2/battery. If GM and Chevrolet both go out of business, Ford's 1,000,000 batteries need to absorb the whole fixed operating cost of $3,000,000. Therefore, Ford's per battery cost doubles to $4/battery. You can imagine other numbers and other parts of the supply chain all working similarly.
    - sitkack 4y ago
      Thank you and @throwaway_4ever, excellent explanation!

bobthepanda 4y ago

It was a really well run marketing campaign, complete with clever nicknames (e.g. Government Motors) The truth is a bit murkier. The car division was not bailed out, but the financial arm did accept government assistance like all the other car loan companies.

dragonwriter 4y ago

IIRC, Ford explicitly said that if it hadn't been for the effect of the bailouts of an other manufacturers on shared supply chains, it would have needed a bailout.

sitkack 4y ago
Could you explain this with a couple sentences, I don't understand.
- throwaway_4ever 4y ago
  Say GM and Chrysler weren't bailed out. Then they wouldn't be able to support the trade between other third party car parts manufacturers that rely on them. Those companies would lose economies of scale and/or go out of business too. Then wouldn't Ford be able to make their cars without those third parties and would need bailing out to not go bankrupt also.
- pixl97 4y ago
  When dominoes start tipping they can all fall over.
- HWR_14 4y ago
  Totally made up example (with easy to follow numbers): Let's say GM, Chevrolet and Ford all buy 12V car batteries from BatteryCo at the rate of 1,000,000 a year (each). BatteryCo has fixed annual costs of $3,000,000 and per battery costs of $1. Right now, Ford pays $2/battery. If GM and Chevrolet both go out of business, Ford's 1,000,000 batteries need to absorb the whole fixed operating cost of $3,000,000. Therefore, Ford's per battery cost doubles to $4/battery. You can imagine other numbers and other parts of the supply chain all working similarly.
  - sitkack 4y ago
    Thank you and @throwaway_4ever, excellent explanation!