Unlike Chrysler and General Motors, Ford Motor Company did not accept billions of dollars in bailout money from the Federal Government. As a result, Ford has maintained a far better perception in the market than its domestic competitors. People seem more willing to purchase a vehicle from a company that did not take the consumer’s hard-earned tax dollars than they are to essentially pay twice for a vehicle from Chrysler or GM. Furthermore, by not accepting Federal aid, Ford has shown the market that the vehicles it produces are viable and worth their sticker price. Most importantly, Ford has shown a commitment to the people of this nation and shown that it will not bow down and essentially steal out of the pockets of American citizens. Concern for the welfare of customers and the nation always bodes well for a company.
Despite all the good that has come from Ford being a responsible corporation and not accepting bailout money, the fact that the United States Government has bailed out and essentially nationalized Chrysler and GM has put Ford into a precarious position. In the past Ford only had to worry about competing with private companies with private balance sheets (I use private here to denote that governments have no involvement). However, now that Chrysler and GM are owned by the United States, Ford has to compete with the financial abilities of a nation that can print money at its own leisure. This is a problem for Ford because their financing arm, Ford Credit, will have a tough time competing with the United States Treasury. As such, Chrysler and GM will be able to offer financing for their vehicles at ridiculously low rates that will be subsidized by the American people. Ford, on the other hand, will have to raise money in the markets and will be unable to compete with the rates offered by the United States because Ford cannot print money. Naturally, Ford has seen this as a serious disadvantage and has been forced to plead with the Federal Government to play by the rules and not create a government monopoly.
This is a perfect example of how monopolies are formed and how monopolies are only possible with government intervention. Prior to the bailouts of Chrysler and GM nobody worried about a monopoly in the automobile manufacturing industry. There was plenty of competition both domestically and from abroad. However, the new Executive and Legislative representatives are going down a path that will likely lead to monopoly. They have not been shy about supporting domestic automobile manufacturers and an increase on tariffs on imported vehicles seems likely if Chrysler and GM continue to falter. Furthermore, now that they own pieces of both companies and are responsible for employing hundreds of thousands of people they will likely go to long measures to ensure each company’s survival. This will likely include benefiting the companies through means which only the government can manage. Ford has seen the stark reality that a monopoly is looming that would wreak havoc on the automobile industries and the American people should be aware of it as well.
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