Even after GM earned the moniker “Government Motors” for its $9 billion government bailout in 2008, Ford Motor Company stood resolutely as an American auto company that could survive and prosper without government assistance, by leveraging all its assets at the time to raise $23 billion in cash and staying independent.
Ford could still thrive and prosper today without government assistance, but that is not the style of modern corporatism. Its executives have fully bent the knee to government and global eco-communists by taking $9 billion from the US government in return for its commitment to fully pursue the electric vehicle fantasy. (One reader calls Ford’s electric vehicle division the “E-dsel.” Heh.)
Ford-SK Venture to Get $9.2 Billion US Loan for Battery Plants [Reuters – 6/22/2023]
The U.S. Energy Department plans to lend up to $9.2 billion to a joint venture of Ford Motor and South Korea's SK-On to help it build three battery plants in Tennessee and Kentucky, the biggest-ever award from the government program.
The conditional commitment for the low-cost government loan for the Blue Oval SK joint venture comes from the government's Advanced Technology Vehicles Manufacturing (ATVM) loan program.
“Low cost government loan” is a euphemism for free taxpayer money. If the government is subsidizing either the principal or the interest, it means money is being given to a corporation…with strings attached.
"Major technology transitions have always been accelerated by collaboration between the public and private sectors," said Ford Treasurer Dave Webb.
Lada and Trabant were outstanding examples of auto manufacturers working closely with government overseers to provide consumers with vehicles the government would allow its citizens to purchase. In regards to the “energy transition,” Solyndra is an outstanding example of “collaboration between the public and private sectors.” (If you don’t recall, Solyndra sought to revolutionize the solar panel industry, and burned through $570 Million of “government loans” before it suspended operations.)
Ford’s executives have chosen to abandon its capitalist roots, and now seek to emulate Trabant and Solyndra by “collaborating” with the government in financing a “technology transition” in the automotive industry.
How is this government funding even authorized? According to the Congressional Research Service, $7.5 billion was appropriated by Congress back in 2009 for the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, and somehow that long-ago appropriation gives bureaucrats in 2023 the authorization to distribute $9 billion of taxpayer dollars.
Congress funded the program in 2009, when it appropriated $7.5 billion to cover the subsidy cost for the $25 billion in loans
Appropriations for the program do not cover the entire value of the loans but instead cover the “subsidy cost” (i.e., the risk of default). For the original appropriation, Congress assumed a subsidy rate of 30%, meaning that $7.5 billion would be sufficient to fund $25 billion in total loan value.
I knew that Congress had long ago outsourced lawmaking to the permanent bureaucracy. I did not realize it had also permanently outsourced appropriations authority to the bureaucracy too.
Other than taking billions of taxpayer dollars to throw down the green sinkhole, how are things going for Ford?
Just last August, Ford had a huge round of layoffs, with a focus on cutting engineers and others associated with its legacy gas-engine division. Here they go again.
The upcoming move by the automaker is part of a continuing effort to streamline operations and reduce costs. The layoffs will be announced as early as next week, people familiar with the situation tell The Journal.
Ford has a successful gas-powered car division that its executives are ashamed of, and it clearly feels about its loyal truck and SUV customers the way Anheuser Busch feels about its (former) Bud Light customer base. It actively dislikes those customers, and seeks to replace them with the types of people who would never consider their product in the first place.
So Ford just keeps terminating employees who are involved in manufacturing products that customers desire, and which generate actual cash flow.
Since Ford is committed to destroying its legacy business in favor of EVs, how are its electric vehicle sales coming along? Very poorly. In fact, Ford’s EV sales are decreasing. The novelty is gone. There is no mass market of potential Ford EV customers to follow the handful of early adopters.
Per The Ford Authority, Ford’s electric vehicle sales fell 13% in May 2023 compared to May 2022. Ford sold just 5,444 EVs last month, compared to 154,744 vehicles with gas-powered engines, which were up 11% year over year.
For what it’s worth, consumers are assertively rejecting the electric Mustang. Its May 2023 sales of 2,917 units were down 44% from May 2022, while gas-powered Mustang sales easily outsold the electric version, up 11% year over year.
Yet Ford’s executives, being obedient apparatchiks of the communist ruling class, are determined to kill off its ICE vehicles and replace them with their unwanted EVs.
Ford’s most popular vehicle is the F150 pickup truck, and its flagship electric vehicle is the Ford F150 Lightning. Unfortunately for Ford, the Lightning is extremely unpopular with F150 buyers, constituting just 2% of sales, both year to date, and in the most recent full month.
But Ford is ramping up electric pickup production all the same.
No Reservations: Ford is Charging Up Electric F-150 Lightning Production
Ford's plan to increase production of the electric F-150 Lightning is moving full steam ahead.
Ford delivered just 7,333 of the pickups through May, due largely to downtime at the factory as work to upgrade it was being completed.
“…due largely to downtime at the factory as work to upgrade it was being completed.” Heh. The “upgrade” was due to a sales moratorium placed on all Lightnings when one spontaneously burst into flames in the lot of a Ford Production facility. This is a picture of the Ford Lightning that spontaneously combusted.
There’s good news if you are one of the few consumers who might still want to buy a Ford Conflagration Lightning. Prior to its introduction, there was a “reservations” list of customers who wanted to buy one. No longer. Like so many other EVs that had a large list of “reservations” and “pre-orders,” the waiting list for Ford’s electric pickup has evaporated.
It has now announced that reservations are no longer necessary and that some vehicles ordered today should be delivered as soon as September.
Ford has staked its future on a product that its customers are enthusiastically rejecting. And why are customers rejecting the Ford Lightning? Because it can’t do basic pickup truck functions such as carrying heavy loads in cold weather.
Ford is full of engineers that could explain the physics of the electric pickup problem to the dilettantes in its C-Suites, but the executives don’t want to hear it. Instead, they are laying off those engineers while pursuing the agenda of Klaus Schwab and Greta Thunberg.
I’d say that Ford will be missed, but it’s already been lost. The slow suicide it has chosen will be painful to watch, because it will destroy so many jobs and businesses with it.
[buck.throckmorton at protonmail dot com]