• In the Spotlight:
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Bailout Fail: Ford Drops Debt, while GM and Chrysler Flounder

Posted April 7th, 2009 in Entrepreneurship.

After months of pressure from the federal government to push down General Motors’s and Chrysler’s debt loads, a deal remains far out of reach. With the promise of further federal bailouts, no debt-holders wants to make concessions—accepting just 30 or 40 cents on the dollar, and much of that in possibly worthless stock—when holdouts could wind up paid in full.

Bailout-free Ford announced yesterday that investors agreed to swap nearly $10 billion dollars in its debt for cash and stock, reducing its total debt burden by 28 percent. The price: about 38 cents on the dollar. After the late-afternoon announcement, Ford stock rallied, gaining 16 percent.

The Gov says they will (which means we will) gaurantee the warranties of GM & Chryslers bought this year. They wasted our tax money on this lost cause already so do you believe your investment is safe if you buy these cars?

Answer Question
 
itsmesteph11

Asked by itsmesteph11 at 10:59 AM on Apr. 8, 2009 in Politics & Current Events

Level 39 (113,405 Credits)
Answers (16)
  • No, absolutely not.. The government is allowed to break contracts, unlike some random car dealership.
    Anonymous

    Answer by Anonymous at 11:00 AM on Apr. 8, 2009

  • I will only support Ford at this point.
    Anonymous

    Answer by Anonymous at 11:11 AM on Apr. 8, 2009

  • I am very glad we bought a Ford Freestyle and not a Chrysler Pacifica.
    Anonymous

    Answer by Anonymous at 11:29 AM on Apr. 8, 2009

  • I personally would only buy a Ford anyway. But I dont think the government could handle the warranty claims. It a warm fuzzy feeling for them to say they will guarantee them, but where will they have to have their cars serviced? Theres alot of unknown about the details.
    tgiamt

    Answer by tgiamt at 11:29 AM on Apr. 8, 2009

  • We're looking at buying a Chrysler if they go into bankruptcy and we can get it for half the cost. If something breaks, we could pay for it with the money we spent on the sticker price. That's only if we can get a mini van cheap enough though.
    smalltowngal

    Answer by smalltowngal at 11:38 AM on Apr. 8, 2009

  • My brother in law works for Ford. We buy only Fords and are glad they are bailout free so far. I have never owned a vehicle made by GM and never would.
    Anonymous

    Answer by Anonymous at 11:40 AM on Apr. 8, 2009

  • LOL we have a pontiac G6 that I bought two years ago. We would not purchase from them again BECAUSE they took fed. funding.
    lovinangels

    Answer by lovinangels at 11:44 AM on Apr. 8, 2009

  • I have an old Chrysler minivan and I promised that I'd never buy another Chrysler. My next car will be a Honda. I had a Honda in high school (bought it used) and I drove it for 10 years and then sold it to my brother who had it for 5 years before it finally fizzled out. My minivan was a piece of crap from day one. I may consider buying a Ford since I respect their business decisions so far. I think the government will find a way out of those warranty contracts. I don't think they will be honored.

    anime_mom619

    Answer by anime_mom619 at 12:04 PM on Apr. 8, 2009

  • Glad I bought a Toyota. The union is still not allowing concessions, so GM will go under. I'm happy Ford has rallied, it's the only American car company I really like.
    mancosmomma

    Answer by mancosmomma at 12:09 PM on Apr. 8, 2009

  • With the promise of further federal bailouts, no debt-holders wants to make concessions—accepting just 30 or 40 cents on the dollar, and much of that in possibly worthless stock—when holdouts could wind up paid in full.
    ____________________________________________
    Yikes. I really didn't see that coming, they are playing hardball. I was never a fan of the car company bailouts, but it didn't even occur to me that people would not settle on their debts. Wow. what now?
    stacymomof2

    Answer by stacymomof2 at 12:15 PM on Apr. 8, 2009

Join CafeMom now to contribute your answer and become part of our community. It's free and takes just a minute.