Ford - not GM - is what I'm wondering about.
Ford seems to have taken a sensible approach - lock in credit availability some time back,
draw down credit lines recently to protect against reluctance of banks to follow thru,
buy back debt at substantial discount, and continue to focus on operational business.
Whether they can survive is an interesting question. Particularly if GM gets special cased
by Fed govt - but I'll bet that Ford can negotiate corresponding benefits at a later date,
without having to go thru the meddling in company operations that GM is now enduring.
A decade from now there will be at least one US major auto manufacturer. It seems to
me that Ford might be the best candidate of the three. But financing from Berkshire to
strengthen balance sheet, perhaps retire more debt at discount to par, may be helpful.
Berkshire's participation might not necessarily be via common shares. Maybe a preferred
such as was done for Goldman Sachs and General Electric. I think Berkshire's ideal would
be to have a substantial exposure to operational earnings of Ford over long term, with
a protection for downside if Ford common gets substantially diluted, and maybe also a
protection against nationalization of the industry being extended to Ford as side effect
of the GM restructuring process.
