Ford buyout deadline looms
KAI RYSSDAL: We'll get the latest on the fortunes of the American auto industry Friday. November sales figures will hit the streets. If past really is prologue, it won't be pretty. Ford's plowing ahead with plans to get profitable again. This morning, the company announced it's borrowing $18 billion to fund its restructuring plan. And midnight tonight is the deadline for its hourly workers to accept buyout deals. Marketplace's Alisa Roth has more.
ALISA ROTH: Simon McNeilly is one of the 75,000 hourly workers to whom Ford is offering a choice of buyouts. He's signed up for the deal that'll pay him $100,000 to quit his job at a Michigan plant. But he still has until midnight tonight to change his mind.
SIMON MCNEILLY: One of the things when I hired-in 13 years ago was that, you know, this is the Big 3 — you're guaranteed safety and security for the rest of your working life. Here I am, 37 years old, and I'm faced with restarting my entire life. So, it's very scary.
He's too worried about Ford's future to try to stick it out, so he's thinking about starting up his own computer business with the buyout money.
Ford is still optimistic about its own future. But even by its own account, it'll be a few more years before the North American operations start making money again. So the company will need the $18 billion it's planning to borrow to help fund the buyouts and the rest of its restructuring plan.
John Novak is an auto industry analyst at Morningstar:
JOHN NOVAK: This says that Ford recognizes that they have a long road ahead. It's gonna require lots of cash for them to restructure themselves.
Novak says the loan is a good idea — especially since banks are willing to lend money and interest rates are still relatively low.
But it's also a risky move. Most of the loan will be backed by Ford's automotive assets. So if anything happens to the loan, Ford could be out of business.
In New York, I'm Alisa Roth for Marketplace.