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Ford Says “Ni Hao” to Chinese Financing

Maker aims to bolster lagging Chinese operations – while lowering U.S. costs.

by on Mar.16, 2012

CEO Mulally turns to China for financial assistance.

Ford Motor Co. is trying something new to bolster operations in China. To help support the company’s strategy in China, Ford has announced it’s selling renminbi (RMB)-denominated bonds for the first time. The issue was aimed at investors in Hong Kong, Singapore and elsewhere outside the United States, with total proceeds of $158 million.

“We are pleased with this transaction and appreciate the actions taken by regulators in China that have opened the RMB capital markets for global issuers like Ford,” said Neil Schloss, Ford vice president and treasurer. “This offering was an opportunity for Ford to fund business operations in China while expanding our global investor base.”

Ford was late to the Chinese market, especially when compared to key competitors such as General Motors and Volkswagen, which now dominate that booming market.  Its challenge is to establish a niche in the market – with the maker putting an emphasis on regions of China just beginning to share the economic boom first seen along the Pacific Coast.

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Meanwhile, Ford has succeeded in negotiating a new line of credit in the U.S. on what it says are more favorable terms. Ford went heavily into debt as the recent economic downturn began – a savvy move in hindsight considering what happened to its cash-starved Detroit rivals. But it is now trying to improve its balance sheet without the benefits that GM and Chrysler got through bankruptcy.

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Ford Earnings Likely to Be Strong

Analysts forecasting strongest Q1 since 1998.

by on Apr.25, 2011

The emphasis is on "profitable growth," according to Ford CEO Alan Mulally.

It’s been a challenging couple of months for the auto industry.  There’s the near-record run-up in petroleum prices, and the Japanese parts shortage that has crippled makers around the world.  Raw material costs have been soaring.  And the economies of some key auto markets have been in the doldrums.

Yet, you might not even notice if you simply watch Ford Motor Co., industry and financial analysts suggest – forecasting that the maker will tomorrow report its strongest first quarter profit since 1998.

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Earnings are forecast to reach as high as 50 cents a share, a nearly 10% rise from the 46 cents reported for the January – March quarter of 2010.  Net income, according to a consensus of analysts, is expected to reach $2.1 billion, the largest figure for the quarter since Ford generated net income of $17.6 billion in 1998.

Such numbers could help quell concerns about the vitality of the auto industry at a time when investors have been pulling back, anticipating serious problems as fuel prices soar – especially for Detroit makers traditionally dependent upon low-mileage light trucks.

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