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Despite Relative Strength, Ford Faces Challenges
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Despite Relative Strength, Ford Faces Challenges

Business

Despite Relative Strength, Ford Faces Challenges
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MELISSA BLOCK, host:

You're listening to ALL THINGS CONSIDERED from NPR News.

We were just hearing there about Ford. And the Ford Motor Company finds itself in an odd situation these days. Alone among the domestic automakers, Ford has managed to survive without getting billions of dollars from the federal government. That could help Ford win over some new customers. It could also put Ford at a disadvantage.

Michigan Radio's Dustin Dwyer has our story.

DUSTIN DWYER: Harold Zeigler Ford is a relatively small dealership in a rural part of West Michigan.

Ted Holloway is the sales manager. He says people out here are starting to take notice that Ford's the only Detroit company surviving on its own.

Mr. TED HOLLOWAY (Sales Manager, Harold Zeigler Ford): You know, you do hear it periodically. You know, a customer will come in the door and say, hey, you know what? We're going to look at a Ford only because they didn't take any government money or whatnot. And it's funny to hear, but it's true.

DWYER: Holloway says, so far, he's only hearing that from a few customers, though a few customers can make a big difference for a small dealership. But Holloway says he's also seeing increased competition, especially from Chrysler. Chrysler dealers have been slashing prices in recent months to cut inventory, and Chrysler dealers that are going out of business are cutting prices even lower. It's tough for Holloway to compete against that.

Mr. HOLLOWAY: If somebody's coming in solely on price, and price is the only thing that matters, you know what? There's a good chance they might end up buying a Chrysler.

DWYER: And while dealers like Holloway have their own problems, Ford as a company has challenges, too. It's now up against two competitors that will have tens of billions of dollars of debt wiped out. Ford was able to avoid bankruptcy because it took out more than $23 billion in loans a few years ago. But it has to pay those loans back. GM and Chrysler don't have the same burden.

GM and Chrysler also now share a financing division, GMAC. And it got its own help from the government, which could make it easier to finance new car deals, another advantage Ford doesn't have.

Talking about these challenges publicly is a bit tricky for Ford since it supported the government's bailout of GM and Chrysler. Now, Ford officials don't want to seem like they're complaining, so you get statements like this:

Mr. MARK TRUBY (Spokesman, Ford): We understand that, you know, some of what's going on now has the potential, you know, to change the competitive dynamic.

DWYER: That's Ford spokesman, Mark Truby. He says Ford supported the efforts to save GM and Chrysler because they share parts companies, and Ford didn't want to see the parts companies go away. Ford was also concerned about what a GM failure would have done to the overall economy. Now, Ford just has to keep up with the changes going on across town.

Mr. TRUBY: We're going to continue to work with all the parties to try to ensure that at the end of the day, Ford's, you know, not disadvantaged. Because we think if - all things being equal, we think we can win with our products.

DWYER: Product development is one area where Ford may have the upper hand. GM and Chrysler have been forced to cut back on some projects while they work their way through bankruptcy. Independent auto analyst Erich Merkle says that gives Ford the advantage.

Mr. ERICH MERKLE (Auto Analyst): I know that seems strange, given all the money that the government's dumping into these companies, but at the end of the day, Ford has by far the strongest product pipeline. They certainly have momentum in their favor. And I think they will win a lot of consumers as they move through this relative to GM and Chrysler.

DWYER: Merkle says Ford will have another advantage. It won't have to operate with Congress and the Treasury Department looking over its shoulder. The company's not wasting any time. Yesterday, Ford announced it would increase production over the summer. That's while GM and Chrysler both plan to have many of their plants closed.

For NPR News, I'm Dustin Dwyer in Grand Rapids, Michigan.

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