Ford Raises $1.4 Billion Via Stock Offering

Yesterday, Fusion Ford reported that the Ford Motor Company hoped to raise as much as two billion dollars by issuing 300 million shares of common stock, an amount that was to be determined after the Wall Street bell sounded on Tuesday. Ford did sell all of its shares but had to settle on getting $1.4 billion as its stock price slipped by 17% during the day.

New Models Set For Release

Likely, bad news from General Motors stoked some of the decrease as did investor angst over Ford issuing stock in the first place, a move that was seen by some as watering down the value of previously issued common stock. Ford is in a better position than its chief rivals — General Motors and Chrysler — but they are still battling to restructure the company as they continue to roll out several new models over the coming months including the next generation Ford Taurus and Lincoln MKT.

Last night, The Wall Street Journal reported that Ford’s stock closed at $5.01 a share, down from $6.07 one day earlier. Ford priced its offering at $4.75 and the shares were quickly sold. Most of the money will help fund the company’s health care obligations and go into a trust that Ford must contribute to between now and 2011.

Betting On The Future

Naturally, any buyer of Ford stock believes that the company has a promising future. Its track record under trying financial circumstances has been surprisingly good, losing much less money than most of its rivals while rolling out quite a few new models in a short amount of time.

Last fall, the delayed F-150 pick up truck hit the market as Ford waited for gas prices to retreat before introducing the next generation of its extremely popular truck. Following that, Ford introduced in March its all new Ford Fusion, Mercury Milan and Lincoln MKZ midsize sedans including a pair of hybrid models for the Fusion and Milan.

Most recently, the 2010 Ford Mustang rolled out, marking the 45th anniversary of the iconic pony car. The new Ford will take on the Dodge Challenger and the revived Chevrolet Camaro, the first time in decades that all three manufacturers fielded these types of vehicles at the same time.

More New Models To Follow

Come this June, an all new Ford Taurus (no Mercury version) will hit the market, a larger more luxurious model than the one it replaces. It’ll be followed early this Fall by the Lincoln MKT, a large crossover that will share its platform, but little else with the Ford Flex.

Nissan Poised To Eliminate Jobs, Transfer Production

Ever since Carlos Ghosn took over the reigns of the Nissan Motor Company during the late 1990s, the business world has seen the automaker transformed from an ailing car company to one offering leadership in a highly competitive industry. Along with managing Nissan, Ghosn also is the CEO of France’s Renault Motors, a dual position highly unusual move for companies of this size.

Ghosn Was Bullish As Recently As November

As recently as November, Ghosn was bullish on the prospects of his company as I heard his speech at the 2008 Los Angeles Auto Show where he outlined Nissan’s bold move forward with a number of initiatives, not least being his promise to have Nissan bring forth an electric car within the next year or so. Those plans are still in place, but the company is also looking to slash its 240,000 workforce by some 20,000 employees.

According to published reports including an article which appeared in yesterday’s The Wall Street Journal (Nissan to Slash Payroll, Pare Japanese Output — page B1) and elsewhere, Ghosn has suspended the company’s 5% annual revenue growth until 2012 while also moving some production from Japan to other countries. The automaker’s popular Nissan March, currently produced in Japan, will now be built at a factory in Thailand where labor and production costs are much lower.

Japan Is Too Expensive For Nissan

Nissan, like other Japanese manufacturers, has found that building cars in Japan has gotten to be too expensive. Not just higher labor and production costs are making car building more expensive in the homeland, but the soaring value of the yen against other currencies is hurting profits. Like all other large automakers, Nissan is truly a business on a global scale, with Japan being just one market where its cars are built.

Nissan is also scaling back new product introduction over the next four years from an average of twelve new products annually to ten. The company insists that it is moving forward with its plans to build an electric vehicle and will tap a $25 billion U.S. Department of Energy loan program established to help automakers develop more fuel efficient vehicles. Nissan will likely also ask the Japanese government and other national governments for financial assistance in the form of low-interest loans.

Nissan also has been pursuing strategic alliances with other automakers including Chrysler LLC for whom Nissan will provide at least one small car and probably a midsize model for America’s third largest automaker. In addition, Chrysler LLC will supply the platform for the next generation Nissan Titan, its big truck. The Titan will likely share the same platform now powering the Dodge Ram.