"Why won't you backtrack on billions of investment anticipating inevitable regulation that I postponed until 2020!!" https://www.cnbc.com/2019/08/22/trump-attacks-ford-motor-for-not-backing-fuel-economy-rollback.html Trump attacks Ford Motor for not backing fuel economy rollback U.S. President Donald Trump stepped up a series of attacks on automakers on Wednesday for not backing his administration’s plan to roll back Obama-era fuel efficiency rules. Trump singled out Ford Motor in particular for backing a deal with California for stricter fuel economy standards. Ford said in a statement that it is focused on acting to protect the environment while also protecting the affordability of vehicles. “This agreement with California provides regulatory stability while reducing CO2 more than complying with two different standards,” it said.
The epic, decades-long battle between Ford and a small-time inventor 50 years ago, Ford stole a patented design for a new type of windshield wiper. But they picked the wrong inventor the screw with. BY ZACHARY CROCKETT On a rainy day in 1962, Robert Kearns had one of those meandering thoughts that separate great inventors from mere mortals: What if a windshield wiper paused between each wipe, like a blinking eye? He constructed prototypes in his basement, filed a patent, and began to dream up a plan: He’d set up a pretty little factory in Detroit, become a major supplier of windshield wipers, and go down in history as one of the automobile industry’s great innovators. Then, Ford stole his idea. For nearly 30 years, Kearns waged an impossible legal battle against one of America’s most powerful companies. In the end, he won millions of dollars — but it cost him his sanity, his marriage, and the remaining years of his life. Kearns’ story is remembered as one of history’s great David vs. Goliath lawsuits. But it’s also a reminder of the shortcomings of the US patent system for independent inventors. An inventor is born Born in 1927, Kearns spent his youth in Detroit, Michigan, ground zero for the flourishing American automobile industry. As a kid, he toured Ford Motor Company’s River Rouge Complex (then the largest integrated factory in the world) and marveled at the auto giant’s innovations. “The automotive — that’s all there was,” he later told the New Yorker’s John Seabrook. “If you were an inventor, and you really wanted to reach people, you invented for the automotive.” vacuum-powered system that ran continuously and didn’t allow for any variance in frequency. For Kearns, this didn’t suffice — and driving in the rain one day, he figured that a windshield wiper ought to function as a human eye, allowing the driver to control the pauses between, and speed of, the swipes. At the time, the auto industry made the bulk of its profits by selling add-ons and upgrades; something like a technologically-advanced windshield wiper meant big bucks. intermittent wiper prototype. He housed the device in a red box marked “DO NOT OPEN” and installed it in his Ford Galaxie. And in early 1963, he drove to the Ford factory to make his sales pitch. A fateful meeting with Ford Through a mutual connection, Kearns was able to set up a 45-minute meeting with Ford’s engineering team. His plan was simple: He’d blow them away with his intermittent wiper, sign a deal to license his technology, open a wiper factory of his own, and become the automobile industry’s go-to supplier. On the big day, Kearns was greeted by 10 engineers in the parking lot, who peppered him with questions about his invention. They expressed interest but told him the wipers had to run for 3m cycles to meet their standards. So, Kearns bought an aquarium, filled it with a mixture of oil and sawdust, installed a pair of his wipers inside, and let them run for 6 months straight. Upon passing the test, Kearns filed the first patent for his intermittent wipers and returned to Ford. The inventor made a series of presentations to Ford’s engineers and executives — and this time they offered him a contract. But it came with one condition: Ford claimed that, because wipers were a “safety item,” all of Kearns’ engineering had to be disclosed before the contract was signed. mental breakdown and had to spend two weeks in a psychiatric ward. His hair, once red, turned snow white. patent was invalid on the grounds that it wasn’t “sufficiently inventive.” In 1978, Kearns filed a patent infringement suit against Ford, seeking $350m — $50 for every intermittent-wiper-equipped car Ford sold. Ford then pulled the big corporation card: It stalled, hoping Kearns would “lose heart or run out of money.” Kearns v. Goliath In the corporate world, there is a concept called “efficient infringement.” Big companies like Ford have found that it’s cheaper to steal a patented product and face any legal repercussions later than is it to license it. Most small-time inventors simply can’t afford to spend millions of dollars dragging a case through district courts. “Multinational companies know that screwing over suppliers is easy money,” says Mike Collins, an author who has studied manufacturing for 30 years. “You see it time and time again.” But as Ford would soon find out, Kearns wasn’t going to give up. The sexagenarian inventor hired (and fired) 5 different legal firms, and eventually decided to defend himself. He slept on the floor of his office, surrounded by boxes of evidence. He recruited his children to pour over documents. And he became so unilaterally obsessed with the case that his wife filed for divorce. Detroit Free Press. “If I walk out of there with nothing more than a check then I’m nothing more than an employee of Ford.” In January of 1990 — 12 years after the filing — the case finally went to trial. And when it did, Kearns vanished. “I had to go,” he later told People. “If I had stayed, it would have legitimized what was happening.” He was deep in the Maryland woods, cooking knockwurst over a portable stove when a verdict was finally reached. Despite selling 20.6m cars (worth $575m in profit) equipped with intermittent wipers, Ford was to pay Kearns a settlement of $10.2m. Kearns was not pleased. “My intent was to have a small shop in Detroit, have nice shrubbery around the plant, hire people — that’s been my dream all my life,” he said. “When they offer you a settlement, they’re really sending you to a park bench.” The aftermath Though Robert Kearns was a newly-minted millionaire, he continued to live an ascetic life, sleeping on the floor of an unfurnished apartment stocked with documents, notes, and witness statements. The following year, he was back in court filing a similar patent infringement suit against Chrysler. $18.7m. Kearns called the sum a “booby prize” (a prize typically given to a last-place finisher as a joke) and left the money uncollected for years in protest. He filed suit against 18 other automakers, but they were dismissed for various reasons. (In one instance his son, Dennis, was found to have wrongly obtained documents by sparking a romantic affair with a paralegal at the firm representing Porsche). Eventually, Kearns bought himself an estate in Maryland and “entered an uneasy retirement.” But even in his waning years, he still couldn’t let the patent cases go. By the time he died in 2005, the intermittent windshield wiper was an industry standard, built into millions of automobiles around the world. Today, he is regarded by many inventors as a personal hero for waging a war against the corporate world’s “steal now, pay later” ethos — even though he fell short of his ultimate dream. “Kearns gained some vindication in the form of $30m in settlements from Ford and Chrysler,” read his Washington Post obituary. “But he never got what he had sought from the beginning:” control over his own invention.
'Junk' rating for Ford from Moody's hurts ability to borrow money, warns investors Phoebe Wall Howard Detroit Free Press Published 6:23 p.m. ET Sept. 9, 2019 Updated 7:22 p.m. ET Sept. 9, 2019 Ford Motor saw its credit rating downgraded to "junk" status by Moody's Investors Service late Monday. The impact of the action, which occurred after the stock market closed, could increase the cost of borrowing money because the automaker is considered a higher credit risk — sort of like a higher interest rate on a car loan for someone with a low credit score. “Ford remains very confident in our plan and progress,” the carmaker said in a statement. “Our underlying business is strong, our balance sheet is solid and we have plenty of liquidity to invest in our compelling strategy for the future. As Moody’s notes, we are already addressing two of its primary concerns: operating inefficiency and our China business. The agency also calls out our 'sound' balance sheet and liquidity position, and expects our global redesign and new products to contribute to improvement in earnings, margins and cash generation." Moody's said the downgrade reflects the company's anemic global business position and "considerable operating and market challenges facing Ford, and the weak earnings and cash generation likely as the company pursues a lengthy and costly restructuring plan." However, the outlook is "stable," the debt ratings agency said, noting that its $23 billion in cash exceeds its debt. Ford has undergone an $11 billion restructuring, and a cash cost of about $7 billion, Moody's wrote. "Ford is undertaking this restructuring from a weak position as measures of cash flow and profit margins are below our expectations, and below the performance of investment-grade rated auto peers." Cash flow and profit margins are likely to remain weak and Ford faces such difficulties at a time auto markets are softening, Moody's said. Ford "does have a sound balance sheet and liquidity position from which to operate," Moody's said. It added, "The alliance with Volkswagen AG will provide important long-term benefits to Ford's position in electric vehicles, autonomous vehicles and commercial vehicles. Nonetheless, Moody's anticipates only minimal impact on Ford's earnings and cash generation before 2022." Shares of Ford fell after ending the regular trading day up 2.1% at $9.54. Industry analyst Jon Gabrielsen said the rating is a considerable concern for companies because, as the auto industry goes into a downturn, carmakers like Ford generally need to do considerable borrowing. "Moody's rating agency is everything," he said. "Anytime major investors see a downgrade to junk status, which shows a higher risk, it tends to cause the stock price to go down." Moody's wrote: "The erosion in Ford's performance has occurred during a period in which global automotive conditions have been fairly healthy." Moody's cited Ford's "operating inefficiencies" in "almost all" of Ford's key markets. "An upgrade of Ford during the near term is unlikely." More: Ford's rating outlook downgraded by Moody's; investors concerned More: Ford recalls F-150, Explorer, Expedition for seats may detach in crash More: Lawsuit: Ford hid Focus, Fiesta transmission problems — then blamed customers David Kudla, CEO and chief investment strategist with Mainstay Capital Management, is a Grand Blanc investment adviser who manages $2.5 billion in assets for clients who include many Ford employees. He said the downgrade on Monday is "unfortunate for Ford" because things are only getting tougher in the auto industry. Junk status means fewer pension funds and other institutional investment funds will be able to buy Ford bonds. "Even though you have cash, you are going out and securing debt from time to time, and it's costlier to do that when that line in the sand is crossed from investment grade to junk," Kudla said. "We're in an environment where we think the economy is looking toward harder times, not better times." While both Ford and General Motors are stocking up on cash for an expected downturn, he said, securing debt is still necessary for big capital projects.
They will pull through somehow........they managed to get through the Great Depression, WW2, Vietnam, the Great Recession and the Obama/Biden/Clinton years. They will muddle their way through this as well.
Ford Faces Trouble There's more trouble ahead for Ford in China, the company said Monday, after its sales in China fell in 2019 for the third year in a row. They dropped 26.1% from the previous year, slumping to less than half of what Ford sold at its peak in 2016. It isn't just Ford: China's car market has slowed sharply in the last year and a half, but American brands have been hit particularly hard. WSJ
Ford battle The Journal has an interesting piece on how Ford found itself at odds with the administration and with other automakers, by overestimating President Trump's appetite for a compromise with California over fuel-economy regulations. Analysts say the standoff has left the industry in a "quagmire". WSJ
In the 1970s, the Ford Motor Company introduced a new subcompact car called the Pinto. In response to several fatal accidents involving the Pinto, Ford prepared a seven-page company memorandum entitled “Fatalities Associated with Crash-Induced Fuel Leakage and Fires.” In the memo, Ford estimated the cost of fuel system modifications to reduce fire risks in rollover events to be $11 per car across 12.5 million cars and light trucks (all manufacturers), for a total of $137 million. The design changes were estimated to save 180 burn deaths and 180 serious injuries per year, a benefit to society of $49.5 million. In coming up with the benefits, the value of human life was estimated to be approximately $200,000 per individual, a value arrived at by the National Highway Traffic Safety Administration. As a result of this analysis, Ford felt justified in not making the modifications, since the costs exceeded the benefits.