Cars.com News Brief: March 16, 2012
Here's what we have our eye on today:
- Ford and its financial backers have agreed to extend a large line of credit to the carmaker, now until 2015, according to Bloomberg News. The $9.3 billion revolving line of credit will give Ford with extra money it can dip into, if necessary. The revolving loan originated in 2006 when Ford borrowed $23 billion, which ultimately helped the manufacturer survive the recession without any federal assistance. The new credit facility, and its BBB rating from Standard & Poor's, will help Ford return to investment grade. Right now, Ford has a BB+ rating, which is one level below investment grade, Bloomberg says.
- Car sales in Europe saw their worst performance in 16 months, according to Bloomberg News. Sales across the continent fell 9.2% in February, the fifth straight monthly drop so far. Sales in France and Italy fell even more precipitously, down 20% and 19%, respectively. Germany, responsible for one in four car sales in Europe, was the only market not to see a sales decline, Bloomberg says. As the economies of Italy, Belgium, Greece, the Netherlands, Spain and Portugal slip back into recession, carmakers are scrambling to cut cost and find partnerships. Fiat is actively looking for a European partner, while GM and Peugeot Citroën have already inked a partnership deal.
- Ford is being sued over allegations of defective fuel-tank linings on some of its commercial vans and trucks, according to Reuters. The plaintiffs, a landscaping and construction firm in New Jersey, allege that the fuel tanks on 10 of its 1999-2008 Ford E-Series vans and F-Series trucks have been shown to "separate and flake off," accord to the lawsuit, which alleges fraud, breach of warranty and unjust enrichment, among other charges.
- The Federal Trade Commission has taken action to stop five car dealers around the country from claiming that they would pay off a consumer's trade-in no matter what the consumer owes on the vehicle, according to Autoblog.com. The ads, which ran on YouTube and on television, deceived consumers into thinking they would not be responsible for paying off the balance of their auto loan, the FTC says. The agency says consumers still ended up being responsible for paying the difference between the trade-in loan balance and the vehicle's value.