Blue Oval Staff Posted August 24, 2006 Share Posted August 24, 2006 click here for the article Quote Link to comment Share on other sites More sharing options...
lfeg Posted August 24, 2006 Share Posted August 24, 2006 This would be a good thing for Ford. It would give them much more independence and flexibility. The downside is that with lax or poor management sources for funds (bonds, other borrowing for Ford Credit, etc.) could dry up quickly, leading to the whole thing just falling apart. Quote Link to comment Share on other sites More sharing options...
HoustonPerson Posted August 24, 2006 Share Posted August 24, 2006 From a capital stand point this could been excellent in getting finances in order. The number one benefit is structuring the labor force to pattern after Toyota and Nissan. This would be a real win win for everyone; most importantly the workers, and then the consumer, and finally the shareholders. But going "private" is not the only solution available. Quote Link to comment Share on other sites More sharing options...
waymondospiff Posted August 24, 2006 Share Posted August 24, 2006 If it's only going to cost $13.34 billion to go private, why not? The only downside I see is, availability of outside funding/financing. But, with Ford being so miserably undervalued, the family could go private this year for $13.34 billion, and resell in three or four years in better times with new products and good headlines for, what, $25-30 billion? That's a pretty good return on investment in my eyes. Scott Quote Link to comment Share on other sites More sharing options...
Blue II Posted August 24, 2006 Share Posted August 24, 2006 Maybe Carlos would accept a 10% block of class "B" voting shares to sign an alliance with Bill Ford? Quote Link to comment Share on other sites More sharing options...
J-150 Posted August 24, 2006 Share Posted August 24, 2006 The only downside I see is, availability of outside funding/financing. that may be a good thing. If the Family has all their eggs in this basket, they will be more inclined to survive and thrive. Maybe its time for Bill to step down and Edsel 2 to step up. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 24, 2006 Share Posted August 24, 2006 Going Private = waste of money. "as little as $13.34 billion" Right. Like the author has $20 billion in his wallet, and another $5 billion on the dresser at home. Fact is, Ford family would not be able to pay cash up front, and the company is not profitable, therefore servicing the debt that would be accrued in a LBO would be ... difficult. And, given the state of Ford Motor, the interest on the debt would be quite high. Quote Link to comment Share on other sites More sharing options...
Guest Sixcav Posted August 24, 2006 Share Posted August 24, 2006 Worried about your stock portfolio Richie? Quote Link to comment Share on other sites More sharing options...
jasonj80 Posted August 24, 2006 Share Posted August 24, 2006 (edited) Worried about your stock portfolio Richie? Maybe Nasser will come back and pull the move he did with Polaroid, use the companies own money to buy it! The company has 20+ billion in cash, it would make sense. One thing that has been said was that if you own over 20,000 shares of Ford stock you would be eligible to convert that as a owner of the private investment company. It makes sense as there are not that many share holders with that amount of shares, (I mean if you did own that many shares by this point I think you may have jumped off a building) and that would greatly lessen the cash outlay needed to take the company private, as well as gain votes to do so. Edited August 24, 2006 by jasonj80 Quote Link to comment Share on other sites More sharing options...
ANTAUS Posted August 24, 2006 Share Posted August 24, 2006 If this means they can dump the UAW, then I'm all for it... other than that, eh... Quote Link to comment Share on other sites More sharing options...
johnnyb82 Posted August 24, 2006 Share Posted August 24, 2006 What normally happens when a company goes private? Do the set a specific price for buying the shares of the general shareholders? Do they just pay market rates? Quote Link to comment Share on other sites More sharing options...
630land Posted August 24, 2006 Share Posted August 24, 2006 (edited) It would be a good way to tell the analysts to 'fcuk off'! Edited August 24, 2006 by 630land Quote Link to comment Share on other sites More sharing options...
waymondospiff Posted August 24, 2006 Share Posted August 24, 2006 Fact is, Ford family would not be able to pay cash up front, and the company is not profitable, therefore servicing the debt that would be accrued in a LBO would be ... difficult. And, given the state of Ford Motor, the interest on the debt would be quite high. But, if the company is so far undervalued, servicing the debt for four or five years is chump change when you can IPO again in 2011 for $20-30 billion. And I doubt it would be 100% debt financing. I'm guessing a range of personal/institutional investors will be onboard for the deal. Scott Quote Link to comment Share on other sites More sharing options...
igor Posted August 24, 2006 Share Posted August 24, 2006 But, if the company is so far undervalued, servicing the debt for four or five years is chump change when you can IPO again in 2011 for $20-30 billion. And I doubt it would be 100% debt financing. I'm guessing a range of personal/institutional investors will be onboard for the deal. Scott this is one of the biggest advantages of going private .. plenty of investment funds do it .. they buy a troubled company, take it private, rebuild it without the nagging of outside investors and 2-3 years later, release it public again usually with 100% profit. There are however 2 problems with that .. 1) you need to be positive your plan will work, because you will likely start being very secretive of your plans, and many people will lose interest in advising you. 2) you have to be able to finance all the restructuring expenses, because private comapnies have harder time getting credit and loans.. there are a lot of benefits to be had from going private, but Ford needs to be sure, they can make it happen - because when yo uare private and run out of money, you usually simply turn the light off and lock the door - not Chapter 11 or chapter 14 .. simply shut down ... Igor Quote Link to comment Share on other sites More sharing options...
Joe771476 Posted August 24, 2006 Share Posted August 24, 2006 I like it in one respect: Ford could tell Wall Street to pound sand up their a$$. But, who now is responsible in litigation? Who gets sued, the Ford family directly? Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 24, 2006 Share Posted August 24, 2006 Maybe Nasser will come back and pull the move he did with Polaroid, use the companies own money to buy it! The company has 20+ billion in cash, it would make sense. Ford has $24B in cash, they have $14B in stockholder equity. Drawing from that cash to buy out the company would destroy Ford's liquidity, and would leave Ford with next to no shareholder equity. Buying outstanding shares would, essentially render the company insolvent. Worried about your stock portfolio Richie? HAH. If Ford took the company private they would have to pay a lot more than the current price to buy the outstanding shares. But, if the company is so far undervalued, servicing the debt for four or five years is chump change when you can IPO again in 2011 for $20-30 billion. And I doubt it would be 100% debt financing. I'm guessing a range of personal/institutional investors will be onboard for the deal. Scott The company is losing money. How, if you are unable to meet current expenses, do you plausibly meet current expenses AND debt load? Quote Link to comment Share on other sites More sharing options...
JM Posted August 24, 2006 Share Posted August 24, 2006 (edited) I don't know if going private would be a good thing. Right now Ford listens to the shareholders first then management then possibly its customers. The only reason we are getting "bold" designs is becauseFord shareholders have been crying for the past 3 years to give us something bold (Ford customers have been yelling for much longer than that). Ford management gave us the 500...shareholders, analysts, customers all complained & now it seems like Ford is listening. If Ford goes private all it means is more years of boring traditional conservative Ford designs, because Ford will be listening to boring traditional conservative Fords. Also, think about what Ford's message would be if they went private. Sure it would say shove it to the analysts, but it would tell Ford employees and customers that Ford doesn't value them or care about their input. Ford workers would lose stake in the company, why should they care if Ford does well, they have no vested interest. Edited August 25, 2006 by JM Quote Link to comment Share on other sites More sharing options...
waymondospiff Posted August 25, 2006 Share Posted August 25, 2006 Ford has $24B in cash, they have $14B in stockholder equity. The company is losing money. How, if you are unable to meet current expenses, do you plausibly meet current expenses AND debt load? Simple math: 24B - 14B = 10B. Can Ford survive on $10 Billion? Do not know. But I'm thinking Ford wouldn't have to drain all $14B in direct Ford cash. Outside investors/firms will want a part of the Ford privatization. How much, I do not know. Plus, when I and others on this board speak of Ford not doing well due to low sales & lack of product, you generally chime in to say "Product is on the way! Things aren't as bad as they seem! 2008 will be a great year!" So, I used 2011 in my example as enough time to pull through this rough patch, regain profit earning potential, and then go public again. It's very, very simple. And figures get in the way, as always, but this is the theory. Maybe the unnecessary brand sales could help finance the repurchase? Could Volvo net $4 Billion? Maybe a spin-off of PAG (minus Jaguar) which could IPO 49%, with Ford holding the remaining 51%? Maybe a large party would jump in, a la Icahn at GM? Spin-off Ford Credit? Many possibilities that *if* Ford wanted to go private, they wouldn't necessarily have to drain the cash on hand to do it. Scott Quote Link to comment Share on other sites More sharing options...
xr7g428 Posted August 25, 2006 Share Posted August 25, 2006 Going Private does not mean that the Ford Family would own the company. Most likely the new company would be owned by a consortium of existing large holders. Here is an interesting scenario. Ford Motor Company could do an asset based sale of essentially all of the company assets to "New Ford". Basically leaving Ford Motor Company as an investor, saddled with the legacy liabilities. By selectively picking the assets, you could move most of the desirable stuff to New Ford and leave the dead wood at Ford Motor Company. New Ford could then renegotiate every thing. Might be a way to move from the stalemate of the present to a real future. New Ford could mirror the operating model of the domestic imports. Once New Ford was up and running, time to take it public again... Old Ford would use the proceeds and liquidation of the remaining assets to fund the existing liabilities. New Ford could set up each plant as an independent company. New Ford might own the real estate and the equipment, but lease those assets to an operating company. Effectively, manufacturing would be outsourced. If the UAW wants to get in to the game, they should become the operators of the plants and the members can then actually own their workplaces. If the union chose to try to unionize the plants they could, but on a one by one basis, and the plants would live or die on the same basis. Independent Plants could then bid on vehicles, both Ford and outside products (Nissan is looking for more US based manufacturing right now). Most products, outside of the automotive world, are produced by contract manufacturers. This would truly be a bold move. So it will never happen. Quote Link to comment Share on other sites More sharing options...
96towncarcartier Posted August 25, 2006 Share Posted August 25, 2006 You guys have to keep in mind... Ford isn't JUST in the U.S.!! In every other region of the planet (Europe, Australia, Asia, etc) Ford is extremely profitable and doing very well! Of course the press won't tell you THAT part! I think going private would get the press off their backs, since all they like to do is report negative crap anyway. The media couldn't tell a positive story if their lives depended on it. Quote Link to comment Share on other sites More sharing options...
pcsario Posted August 25, 2006 Share Posted August 25, 2006 If this means they can dump the UAW, then I'm all for it. My thoughts exactly. Quote Link to comment Share on other sites More sharing options...
DCK Posted August 25, 2006 Share Posted August 25, 2006 Maybe the family could sell the Lions. It's not like they are doing anything worthwhile with it. Weren't the lions purchased to keep the members of the Ford family who are failures out of For Motor company, kind of like give them something else to do? I don't think Ford will ever try to have the Lions win anything. Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted August 25, 2006 Share Posted August 25, 2006 Running a Football team and Automotive company are two totally different things... Quote Link to comment Share on other sites More sharing options...
DCK Posted August 25, 2006 Share Posted August 25, 2006 Running a Football team and Automotive company are two totally different things... Yeah, what i was saying is that there was an article about the Ford Family purchasing the Lions to keep certain family members busy and away from Ford Motor Company. You guys have to keep in mind... Ford isn't JUST in the U.S.!! In every other region of the planet (Europe, Australia, Asia, etc) Ford is extremely profitable and doing very well! Of course the press won't tell you THAT part! I think going private would get the press off their backs, since all they like to do is report negative crap anyway. The media couldn't tell a positive story if their lives depended on it. Let's compare where they make Profit and the product in those area's to where they don't make profit and the product in those areas. You will see that profit comes with good product. RIght now Ford is failing at product in the US when the change happens(which it is starting) then profits will come. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted August 25, 2006 Share Posted August 25, 2006 I still say going private relies too much on spinning sufficient profit to service debt. Ford has better uses for whatever profit it manages to generate. Either the purchase will require lots of debt acquisition (which will cost money to service), it will require spending a lot of cash (reducing liquidity), or it will require turning over day-to-day operations to a LBO-consortium appointed CEO bent on shaping the company up for an IPO 3-5 years out, and forget the long-term costs!!! Quote Link to comment Share on other sites More sharing options...
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