• News
  • Guides
  • Reviews
  • Media
  • About
  • News
  • Guides
  • Reviews
  • Media
  • About
Sign up Now (For Free)

Sign up for our newsletter and receive the latest automotive news in your inbox!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.
Thanks for subscribing!
News
Read Now
  • All News
  • Automakers
  • Automobiles
  • Auto Shows
  • Business
  • EVs & Environment
  • Guides
  • Lawsuits/Legal
  • Regulatory
  • Ride-Sharing
  • Safety & Recalls
  • Technology
Recent
  • General Motors Recalls Nearly 500,000 SUVs
  • Unions Win with Provisions in New EV Tax Credit Rules
  • Dodge Eases Sting of Lost Muscle Cars with New Hornet
  • Mercedes-Benz Teases EQE SUV’s Interior
  • Polestar 6 Roadster Confirmed for Production in 2026
  • First Look: Chevy’s Ultimate Off-Road Pickup, the 2023 Silverado ZR2 Bison
  • Say Farewell to Dodge Charger, Challenger — And Welcome Back to Durango Hellcat
  • NHTSA Opens Brake Hose Query; Could Result in Recall of 1.7M Ford Vehicles
  • Check Out the Latest Info on EVs, Executives and More on the Headlight News Podcast
  • Top U.S. Auto Safety Chief Leaving After Three Months
Editor’s Choice
    Reviews
    Read Now
    • All Reviews
    • Classic Cars
    • Concept Cars
    • Convertibles
    • Coupes
    • Crossovers/CUVs
    • Diesel
    • Hot hatches
    • Hybrids
    • Luxury Vehicles
    • Minivans
    • Muscle Cars
    • Pickups
    • Sedans
    • Sports Cars
    • Super Cars
    • SUVs
    Recent Reviews
    • A Week With: 2022 Toyota Tundra TRD 4x4
    • First Drive: 2023 Hyundai Palisade
    • A Week With: 2022 Hyundai Ioniq 5 Limited AWD
    • A Week With: 2022 Mercedes Sprinter 2500 Cargo Van
    • A Week With: 2022 Toyota RAV4 Prime XSE AWD
    • A Week With: 2023 Kia Sportage Hybrid EX AWD
    • A Week With: 2022 Volkswagen Golf GTI 2.0 Autobahn
    • A Week With: 2022 Infiniti QX60 Luxe AWD
    • First Drive: 2023 Genesis G90
    • A Week With: 2022 BMW M4 Competition xDrive Convertible
    Editor’s Choice
      Guides
      Car Warranty
      • Endurance Warranty Reviews
      • BMW Extended Warranty
      • Extended Warranty For Cars Over 100k Miles
      • Extended Car Warranty Cost
      • Subaru Extended Warranty
      • CarShield Reviews
      • CarShield Cost
      • Aftermarket Car Warranty
      • CARCHEX Warranty Reviews
      • Reputable Extended Car Warranty Companies
      • Used Car Warranty Companies
      • Best Car Warranty
      • Is CarShield A Scam?
      • Mercedes Extended Warranty
      • CarShield Plans
      Insurance
      • How To Identify A Car Insurance Company
      • Geico Mechanical Breakdown Insurance
      • How Far Back Does A Car Insurance Company Look
      • Mechanical Breakdown Insurance For Used Cars
      • State Farm Mechanical Breakdown Insurance
      • Mechanical Breakdown Insurance From Progressive
      • Dollar A Day Insurance
      • Auto Insurance For SSI Recipients
      • Car Insurance Rates After A Suspended License
      • Auto Insurance For Salvage Vehicles
      • Average Cost of Dodge Ram 1500 Car Insurance
      • Car Insurance Florida
      • Full Coverage Auto Insurance
      • GrubHub Insurance
      • Amazon Delivery Auto Insurance
      Shipping
      • Car Shipping Companies
      • uShip Reviews
      • Auto Shipping From California To Hawaii
      • Montway Auto Transport Reviews
      • Cheap Car Shipping
      • Easy Auto Ship Reviews
      • Auto Shipping Miami
      • Auto Shipping To Alaska
      • Car Shipping Cost
      • Auto Shipping Hawaii
      • Auto Shipping Puerto Rico
      • Sherpa Auto Transport Reviews
      • Auto Shipping Atlanta
      • Auto Shipping Boston
      • Auto Shipping. Chicago
      About
      • About Us
      • Contact Us
      • Terms of Use
      • Privacy Policy
      • Affiliate Disclosure
      • Sitemap
      TheDetroitBureau.com

      More than just “another” place to find news, reviews, spy shots, commentary, features, and guides about the auto industry. TheDetroitBureau doesn’t stop with the press releases or confuse a few lines of opinion with insightful, in-depth reporting.

      Contact Us

      Like what you see? Have some ideas for making The Detroit Bureau.com even better? Let us know, we’d love to hear your voice.

        Media
        Listen Now
        • Headlight News: All Episodes
        More from TheDetroitBureau
        • Guides
        • Latest News
        • Auto Reviews
        • Podcasts
        Headlight News

        TheDetroitBureau.com’s Headlight News offers a look at the past week’s top automotive news stories, as well as what’s coming up in the week ahead. Check out the week’s top story and our latest review…along with a dive into the past with this week in automotive history.

        home > news > Automakers > Stung by Coronavirus, Ford Bolsters Dwindling Cash Reserves by Issuing $8B in New Debt

        Stung by Coronavirus, Ford Bolsters Dwindling Cash Reserves by Issuing $8B in New Debt

        Automaker had already drawn $15B from other credit lines.

        Paul A. Eisenstein
        Paul A. Eisenstein , Publisher & Editor-in-Chief
        April 20, 2020
        Ford added $8 billion more to its cash position by issuing new securities.

        Days after revealing it plans to go to the debt markets to add more cash to its reserves, Ford Motor Co. raised $8 billion by rolling out a three-part issue of new securities.

        There were concerns about what it would cost the automaker to raise money this way after Moody’s and Standard & Poor’s both lowered Ford’s credit ratings in recent weeks. However, in a time where leaving cash in what amounts to savings accounts earns the holders basically no interest, Ford’s new offering became very appealing.

        Investors will earn between 8.5% and 9.625% on the new securities, and there was enough demand for $40 billion, Reuters reported. The willingness of investors to sign on was viewed as a good sign by some analysts.

        (Ford adding unknown amount of debt to bolster cash reserves.)

        “Today’s deal is a good sign of the growing confidence around the improving market backdrop with respect to liquidity as well as more promising views around the economic outlook,” said Dan Mead, head of investment grade syndicate at Bank of America Securities, which was one of the lead banks on the Ford deal, Reuters reported.

        Sales of the 2020 Ford F-Series line-up suffered during the first quarter.

        Last week, the automaker warned it could lose as much as $2 billion during the first quarter due to the coronavirus pandemic that has forced the shutdown of the automaker’s plants in North America, Europe and numerous other global markets.

        That’s substantially worse than the previous guidance from Detroit’s second-largest automaker, Ford barely a week before saying it expected a pretax loss of around $600 million, with global revenues off 16% for the January-March quarter.

        Despite the hit from the disease, which has subjected the vast majority of Americans to shelter-in-place orders, Ford issued a statement by CFO Tim Stone saying that, “Ford believes (its) present cash balance is sufficient through at least the end of the third quarter, even without resuming additional production or further financing actions.”

        The  pandemihas hit Ford – and the rest of the auto industry – hard, but the question is how much longer automakers will feel its impact. Signs of a deadly outbreak first appeared in China late in 2019 and, by February Chinese leaders began ordering lockdowns in Wuhan – where coronavirus first appeared – and then other regions of the country. Factories shut down and sales in the world’s largest automotive market came to a virtual halt.

        Ford shut down its North American production facilities as part of the ongoing battle against the coronavirus.

        As COVID-19, the disease caused by the coronavirus spread, lockdowns rapidly expanded, as well – first to Europe and then to the U.S. In Ford’s home market, overall March new vehicles sales tumbled by 39% and, by the middle of the month the entire North American automotive production network ground to a halt.

        As a result, Ford said, it now expects total revenues for the first quarter to slip about 15.7% through the end of March, down 15.7% from the $40.3 billion it took in during the first quarter of 2019.

        (Ford expects to lost $600 million during first quarter.)

        The question is what will happen in the second quarter. J.D. Power has indicated the U.S. market has remained stronger than anticipated. But new vehicle demand was still off about 55% for the first half of April and not expected to see any real rebound until at least June, according to Power analyst Tyson Jominy.

        Production, meanwhile, remains on hold in North America until at least early May and, despite Pres. Donald Trump’s push to get the economy rolling again, there is a strong pushback from many governors and medical experts that could lead to further delays. Since automakers generate their revenue when vehicles are delivered to dealers, the shutdown of production has hammered the industry.

        Ford CFO Tim Stone said a week ago the company had enough cash to get through the third quarter of 2020.

        On the plus side, Europe is beginning to open back up. Hyundai started limited production last week and more manufacturers will be following up this week and next. Much of the Chinese auto industry also is back up and running, though sales in both those regions aren’t expected to be back to normal anytime soon, according to industry analysts.

        Despite the impact of a crisis that has seen U.S. new vehicle sales to levels even lower than during the Great Recession, Ford contends it is in a much better place than it was a decade ago, the automaker reporting it had $30 billion in cash reserves as of April 9. About half of that came from two rounds of borrowing, however.

        Ford’s crosstown rivals, Fiat Chrysler and General Motors, have also been trying to assure analysts and investors that they can weather this storm after both having gone into bankruptcy during the last recession. GM, for one, issued an advisory that said it is working “aggressively to strengthen (its) liquidity.”

        But there is little doubt that automakers around the world will be hard hit during at least the first half of the year.

        “The (original) full year outlook for 2020 … can no longer be achieved,” VW said in a statement, pointing to a “decline in customer demand and supplier bottlenecks (which have) led to production stops.”

        (Ford COO Farley shuffles executives to accelerate improvement.)

        Shares of Ford and GM were both off slightly in Monday morning trading.

        Michael Strong contributed to this story.

        How to Care for Your Car

        Cheap Car Warranty

        Editor's Choice

        Best Extended Car Warranty

        Editor's Choice
        Recently Published

        General Motors Recalls Nearly 500,000 SUVs

        Today
        2021 Ford Mustang Mach-E GT Performance Edition

        Unions Win with Provisions in New EV Tax Credit Rules

        Today
        2023 Dodge Hornet Night Beauty Shot scaled REL

        Dodge Eases Sting of Lost Muscle Cars with New Hornet

        Yesterday

        Leave a Reply Cancel reply

        Your email address will not be published. Required fields are marked *

        Share this article:
        © The Detroit Bureau 2022
        • Guides
        • Privacy Policy
        • Terms of Use
        • Affiliate Disclosure
        • Contact Us
        • Sitemap
        Follow Us: