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The Death of Ford Motor Company

     For two weeks, I have watched the talking heads of financial news – on CNBC, Fox Business, even Bloomberg – discussing the evolving GM-Chrysler merger to be funded by the federal government. I am astounded they have all missed the story or chosen not to comment on it.


     Of course, I expect the regular, mainstream media to bungle this story; they can barely spell ‘business’ let alone do any in-depth reporting about it. But you’d think the financial wizards on the business channels might get it right. As far as I can tell, they haven’t.


     So here it is:


     The federal government is taking the two sick companies, GM one step from death’s door, functionally bankrupt, and Chrysler, with pneumonia, and merging them. That’s like mixing cow manure and human poop and trying to call it perfume.


     Adding insult to injury, they are using your money to finance what cannot be sanely, thus privately, financed. They are even converting GM’s financing mess into a bank, so it can qualify for a bite out of that $700-billion turned $1-trillion-and-counting bank bail-out.


     But the big story going completely unremarked upon is this: the aftermath has two U.S. auto companies competing. Ford and the new U.S. Government Auto Company. It’s Ford, owned by its shareholders, a capitalist enterprise, in competition with the new company I’ll call USGAC, more of a communist enterprise.


     So, USAGC has federal investment capital and financing of billions of dollars. Ford is on its own. Once the government has poured the first billions in, it won’t dare stop and ever permit failure. So in truth, USAGC has unlimited capital and financing from the taxpayers’ pockets; Ford gets none.


     Both USAGC and Ford have union problems, legacy cost problems and fuel-mileage requirements that, combined, are killing them. I wonder which company will get government orchestrated relief – the one the government has billions at stake in or its competitor?  And gee, I wonder which of these two companies will get government contracts, will have its vehicles bought by government agencies, will get help selling its vehicles to foreign governments?


     The writing is on this wall but nobody’s reading it. How could the private enterprise company possibly succeed in head-to-head competition with the government funded, government financed, government invested in Chosen One?  The decision has been quietly made behind closed doors: Ford must die so the new USAGC can live.


     The same basic decision has been made for the banking industry. Nine banks have been chosen for endless life support to whatever extent needed with taxpayer dollars, putting their better-managed, more-reputable free enterprise competitors at enormous disadvantage.


     The Chosen Ones are already using government provided funds to gobble up smaller, much healthier regional and community banks rather than lending, as Congress was promised. Doesn’t this portend a single U.S. Government Bank?  It worked out so nicely with Fannie and Freddie, it makes perfect sense to replicate it with the entire banking system, right?  You either have to ask yourself “what are these idiots smoking?” or “what are these conspirators really up to?”


     If you’re Ford, you are going to be starved of capital while your competitor is fed all it needs or wants. You are competing with a company that can outspend you at every turn by 4-to-1, 6-to-1, 10-to-1, to whatever extent necessary – much like the Obama campaign out-spent McCain, also with dirty money. And this is dirty money.


     This is money taken from us taxpayers and deployed in a discriminatory, dictatorial manner favoring one competing corporation over another, with only one outcome possible. If you happen to be a Ford shareholder or employee, you have been marked for financial death by your own government. Look in the mirror – you’ll see the grim reaper standing behind you.


     This is the discussion I can’t find anywhere. Why not?

Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.