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09 June 2023

Ford must decide if the fight to plough on is worth pursuing

By David Robertson

Ford, the American car giant, said last week that it had lost $14.6bn (Dh53.8bn) during 2008. $14.6 billion! There are very few companies that can boast revenues of that size let alone losses.

Add to last year's result the $15.3bn lost in the previous two years and you have to wonder when the company, its lenders and shareholders will just throw in the towel. But of even greater concern is that Ford is considered to be the strongest of the big three US automakers. General Motors and Chrysler have both sought government aid as they teeter on the brink of extinction, while Ford has so far rejected any bailout and hopes to plough on by itself. Its defiant stand would probably be impossible without Alan Mulally as chief executive – a man who shareholders trust.

However, if the losses continue on the scale of the past three years I have to question whether this is a fight worth pursuing. Ford, GM and Chrysler are iconic American companies and huge employers but how can they justify soaking up government and shareholder funds when other, profitable and much better run, businesses are struggling for financing.

If this were a medical drama, the trauma team would have given up on these corpses long ago. Perhaps the humane thing for us to do now is to allow them to fail.