Report: Ford Took Federal Funds, Too

Jalopnikgraph

While Ford was making noise about not taking federal bailout money, they and other major automakers (both foreign and domestic) got federal aid to the tune of tens of billions of dollars when the economy tanked in 2008.

Yesterday, the federal government released the names of companies and the amounts of loans handed out during the financial crisis of 2008 to keep loans flowing as credit dried up everywhere. A number of those companies were the lending arms of automakers.

Automotive blog Jalopnik broke down which automotive lending companies got the most help, and leading the way was Ford Credit, which borrowed $15.9 billion. GMAC, GM’s financing arm which provided auto loans beyond the GM family of vehicles, took $13.9 billion. BMW took $6.2 billion. Chrysler $4.9 billion and Toyota $4.6 billion.

The GM and Chrysler loans were completely separate from those two companies’ government-financed bankruptcies.

While the news and numbers aren’t earth shattering — funds to the automotive lending companies totaled just $57.9 billion out of $3.3 trillion in TARP funds — it could color Ford’s perception as the only Detroit-based company that didn’t need a federal handout during the economic crash.

That’s a perception the company has fueled itself, by making statements about how not taking a “bailout” has been beneficial to its recent resurgence. We realize the two transactions are quite different, and this loan was not a bailout.

But we wonder how the public will see it.

All of this aid has since been repaid with interest to the government.

Graph courtesy of Jalopnik

Comments 

Amuro Ray

More reason to buy Honda, Nissan, Hyundai,etc.!!!

OK, that's just kidding. But seriously, there is a difference b/n the financial arm borrowing money compare to the actual manufacturer getting the bail-out. These are just like banks, except that these aren't public accessible bank like Chase or Wells-Fargo. Think Citi-Group. Citibank is part of the Citi-Group, but not vice versa.

OTOH, can we lump these financial arms like that of GS or LM or AIG (those much bigger bail-out from Wall-Street)?

Troy S.

I predict this won't get the media attention that Toyota's recalls did....Therefore, it will quietly and quickly be swept under the rug.

Dan

While the public has been known to almost universally take things out of context and overreact, I think the last line of the article ought to help mitigate the outrage quite a bit.

Shorebreak

Unless Rush Limbaugh mentions it no one will care.

well, this is a secret known by all yet everyone pretend that they do not understand. Well, I support electric powered vehicle.

Garth

Big surprise, misleading advertising by a US car company?

As you said David, these credit programs are quite different than the emergency taxpayer assistance/TARP provided to other automakers. These two programs addressed systemic failure in the credit markets and were used by a wide array of companies. And Ford Credit reported its participation in public SEC filings and during conference calls with investors and media.

Scott Monty
Global Digital Communications
Ford Motor Company

Rich

Although accurate, this article seems like it is purposely trying to stir up trouble. The funds these credit companies received were not bailouts like the bankruptcies of GM and Chrysler. These were loans, just like the banks and many, many other businesses received government-backed loans during the 2nd Depression.

Cory

Everyone knows Obama was being the Toyota Recalls....that was the only way he could sink Toyota and recover GM...BUT HAHAHA it didnt work!

David

Bailouts hinged on stock in the company when the price is at its lowest vs loans ? What is the difference? Buying American vs import is pretty obvious to me... Keep buying Toyota and you are selling your kids futures to the obvious. Obama is to blame for recalls...? Come on.

ken

Do you GM and Chrysler lovers know the difference between a Loan and a Bankruptcy’s? I guess not and it goes to show the IQ level when you talk about a company Ford taking out a big loan to a GM Bankruptcy. A loan is something everyone has taken out to buy something be it a car or a house. In a business you take out loans to do business. In a bankruptcy you screw allot of people out of their money. At no time did Ford hurt anyone when they took out a loan. GM's bankruptcy screwed the Stock holders and the Bond holders who got nothing for the money they invested. Some of those Stock holders and Bond holders where the average Joe’s who invested their life savings and future retirement money in GM. A friend at my work was a bond holder in GM to the tune of 47,000 dollars. So what do you think his bonds are worth now a big Zero? What did GM give him for his money investment big fat ZERO. Ford did the honorable thing by not taking the easy road by not filling a bankruptcy. The government meaning us did not lose any money by giving a Loan to Ford which it is paying back in cash. Gm.’s loans will never be paid back to the tune of 80 billion. The US people lost 80 billion dollars on GM. The US people lost a big fat ZERO on Fords loans. So the next time someone likes to compare a loan to a Bankrupts think about it, a loan hurts no one a Bankruptcy’s hurts everyone involved with that person or company. Back in the old days you went to debtor’s prison for not meeting your obligations. It’s called a Loan Guys and Gals which means it paid back and that’s something that will never happen in a Bankruptcy and those are the facts. It just gets old hearing about all these loan talks that try to twist things around like Ford did something wrong it was GM who screwed allot of people out of their money not Ford. Remember Loans are paid back bankruptcy's are not that money is never paid back its gone forever. A loan is not a bailout.

Khris

You idiots saying buy Toyota buy Honda are polarized sheep! Just like the idiot who walks into the voting booth and votes for an entire party regardless of the individual politician's policies. If you can't give Ford the credit it deserves for the product they're releasing these days then you truly are a mindless fool. Ford has equaled or surpassed both Honda and Toyota for years. Unfortunately it took a while for public perception to catch up. Seriously people open you eyes and base your opinions on the real facts. BTW, Ford did not take the Bailout. Ford Credit took a loan that they've paid back with interest. Period.

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