Ford: Just Say "No"

Frod’s shares took another beating yesterday, down over 4%, because the company said it would take on $5 billion in debt on top of the $18 billion it announced last week.

The reasons Ford gave for the increase seem disingenuous. Investor demand was greater then expected fofr the fixed income instruments, and the additional capital give Ford more “flexibility” in its North American structure.

The excuses have flaws. Ford could turn down the additional money. Its management must have a reasonably good idea how much money the company needs. Last week it was $18 billion. Now, it is much more.

Shareholders in Ford hardly want to hear that the company need flexibility in restructuring. Ford has $23 billion in cash on the balance sheet at the end of last quarter. That was thought to be enough to ger the company through.

If the amount of money Ford needs continues to be a moving target, one can hardly blame Wall St. if it  wants out of the stock.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.