Ford Bets It All To Raise $18 Billion And Avoid Bankruptcy
Critics and supporters agree Ford Motor Company's plan to put up nearly everything it owns for collateral, in order to acquire financing, is a very bold move. Ford has never before had to pledge any assets to acquire financing in its 103 year history. But now Ford must to put up all of its major assets to raise enough cash and credit to pay for a restructuring plan that includes a mass layoff of 40,000 jobs and closing of at least 12 plants.
As auto sales show signs of declining in 2006, many of Ford's suppliers have already declared bankruptcy or initiated mass layoffs to reduce expenses when the demand for parts decreased. Ford executives disagree with experts who say we will see major decreases in automobile demand through 2007. They are willing to bet Ford's plants, office buildings, patents, trademarks as well as stakes in Volvo and Ford credit that demand will not decrease and the restructuring plan will enable the auto manufacturer to stay out of bankruptcy.