The business media had two ways of looking at Ford's (F) - Get Report vow to not go on the government dole, in the wake of its more-than-expected $5.9 billion quarterly loss reported on Thursday. There was my way, and then there was the wrong way.
First, the wrong way, represented here by
. Its theme is simple: Ford lost nearly $15 billion on the year and has big time cash trouble, but it won't seek any federal help. How do we know it won't? Because it said so. End of discussion.
doesn't, for the sake of the savvy investor looking for insights into what will happen in the future, question how long Ford can hold onto its pride and promises in this regard.
Here is its lead: "
Well, sure he said it. But if history, from the financials to
. have taught us anything, it's to question the claims of those in corporate authority, right? Especially when the facts or numbers don't seem to be stacking up so neatly. Otherwise, the business media are functioning as little more than a megaphone for those in power, which does not help the savvy investor one iota. Look, Ford's stance and strategy to go it alone is admirable. It will probably court favor with car buyers, not to mention give them the confidence that Ford is in somewhat better shape than
, which it clearly is. But then, being in better shape than those two doesn't say much. I can hold your hand through the disaster that is Ford's cash burn rate, but suffice it to say it might take something nearing a miracle for the company to make it without accepting one thin dime from the government.
questioned this in no uncertain terms. First, CEO Alan Mulally's confidence: "But Mulally bravely stared into the cameras today and said, 'no thanks.' He is still outwardly confident the company can rustle up enough cash to get through the toughest market slump since the Great Depression."
And then: "If the economy continues to sink deeper Ford might have to join GM and Chrysler in the bread line."
Even in a more basic reported piece,
set the stage with an appropriate headline: "As Red Ink Spills, Ford Drains Credit Lines: Auto Maker Reports $5.9 Billion Quarterly Loss, but Doesn't See Need for Government Loans." It continued on to raise the operative question right in the lead:
"Ford Motor Co. reported a $5.9 billion quarterly loss that was twice what many expected and said it would draw down its last credit lines sooner than anticipated, raising fresh questions about how long it can survive without a government bailout."
And on behalf of savvy investors everywhere,
managed to capture the entire reality of Ford's current claim, all in one explanatory headline:
"Ford Losses Are Awful, Cash Burn Is Worse: Despite losing $14.8 billion and blowing through $21.2 billion of cash reserves in 2008, Ford still says it won't seek bailout money -- for now."
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven� column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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