Ford Poised for a Comeback?

" First broke the story last night about Chrysler despite taking government money it says it will break even by 2000 he Loveland. May actually also say they'll ultimately pay -- government money back and of course guy sport reported on Monday that it's on the upswing in that the come. That company didn't take any -- Wall Street bailout money. In today's Wall Street Journal Detroit bureau chief Paul Ingrassia. -- yeah. Specifically talked about how Ford is making it come back he also penning a book coming out in January called crash course the American automobile industries. -- from glory to disaster. Paul joins us now not from Detroit but from Naples Florida. We'll be able figure out what he's doing down there but let's get on the -- first if we could you know. -- hit the tone of the article titled the article was good for making a big comeback but actually that's pretty cautious words by the end of the for the investors. Your take yes for baggage that -- visited even a viable investment or perhaps."

" Well sure I think it is a viable viable investment coating the of those who is clearly in transition period under way. The most impressive thing about Monday's financial results was that. Ford went from a negative cash flow a year ago when -- it's seven point seven billion dollars -- huge cash burn horrific. And now they've come back to a positive cash flow of one point three billion. -- by the way and very depressed market still on the in the car sales were good in October compared with the event earlier in the year. Except for the cash for clunkers money. But that's still ten and a half million is still about 4050% below the historic. Norms in the industry everything."

" Years. But you need your client base and it. Jack Black they shed some you know big brands -- trying to streamline themselves down Broadway and hired a Lexus G a general manager which I actually think his. Brilliant now -- their marketing guy. Because clearly there. And ethnic population still leave it leans towards those aren't autos and my big concern is this -- of debt that comes due in 31. -- can -- still get out there and investment is coming knowing that all that's going to happening can they afford to pay that back."

" Well you know sort of a good question and the answer is you don't know good deed goes on product to -- board. Was the only one of the Big Three that did not take government bailout money and did not go through federally sponsored bankruptcy. As a result we didn't have -- washed away like a General Motors did to us we expect Chrysler. So so the result is that you know forward quality has about 27 billion dollars of debt on its books compared to only seventeen million for for General Motors. Other good news here though is Ford is taking the white steps. It is exchanging. He's trying to solve bad debt for equity -- slowly but steadily. So isn't it strengthened the balance sheet but it's going to take awhile remember we're -- transition period here is going to take. You know months' -- total work out."

" Well what about the union factor on the General Motors and Chrysler they were able to negotiate. A better deal with the union I mean I guess an exchange with -- are giving away half the company. Well was -- they're still paying very high salaries compared to the competitors. And they're still in that whole situation of where. Its -- and compartmentalized. That if you are not you know of the tool guy here you can't touch that part of the assembly line. And that may hurt productivity when we saw great productivity -- numbers -- for the rest of America today."

" The other issue -- wages to be honest with you and it's not wages again GM didn't negotiate these terms really you know what happened General Motors and Chrysler had these terms. Imposed on them by the government and so for the UAW as -- as in return for getting federal aid come through bankruptcy. So basically there was no -- things here first of all there's a wage freeze on new hires until that point fifteen. The second thing is that they know strike pledge for another six more years until -- fifteen and the third thing was there was that would measurable reduction in job classifications. And work rule which is just what you you've talked about a minute ago. So basically the profound -- the most important but by far. -- in order to get the same conditions that really were imposed on GM Chrysler have -- UAW. By the federal government. -- building and leadership Brett these trends look forward. We use the rank and file -- by an overwhelming Margaret. -- the results to be honest with you going to be more jobs going to Mexico. School board has laid off factory a couple of weeks ago. That produces the best quality cars the court system right now."

" Well thanks so much for joining us I -- I checked that 27 billion dollars because I don't think you're including Ford credit -- that. Which included it in the cash flow that he gave no quarter."