Ford company announced this week a lower than expected loss for the first quarter in 2009. Also the company announced that it remains on track to meet its financial targets despite the worst quarter for the car constructors since 25 years.
Ford is the only car constructing company in the U.S. that didn’t receive loans from the government to help avoid bankruptcy, but this quarter it made net losses of $ 1.4 billion. There is not only the loss of $ 1.4 billion, but also the revenue dropped with 37% to $ 24.8 billion in the this quarter. Ford is already making losses since 2005, what brings the total losses just under $ 40 billion. Unless the bad results Ford is doing better than expected, Wall Street was expecting a revenue of only $ 22 billion. It’s also doing better than its two U.S.-based rivals.
Based on what Ford said in its statement that it still does not intend to ask for federal aid, it’s also going to restructure its debt and make changes in its labor contract with the United Auto Workers union.
According to me the financial crisis keeps making victims in the car industry and all the other sectors. At this moment buying a car is not the priority for the most people so the car industry is collapsing. It’s important that the government keeps supporting G.M., Ford and Chrysler because otherwise the damage will be disastrous not only for the economy but also the unemployment rate will raise again.
Source:http://money.cnn.com/2009/04/24/news/companies/ford_results/index.htm?postversion=2009042408
zaterdag 25 april 2009
donderdag 23 april 2009
Obama to lean on credit card CEOs
Finally the measures to protect consumers against the credit card market might be legalized. Years ago, the measures have been introduced but there was no legislation yet. On April 21, Barack Obama announced that there will be a meeting of administration officials of the congress and card company executives on Thursday. This could finally be the break-through where a lot of people have been waiting for.
The measures are there to protect the consumer. A system of bills would be used and these would be responsible for banning card companies who ask ridiculous high interest rates and fees. It would also prevent young adults from getting credit cards and run up debts. Now more than ever credits cards are having bad influences on consumers’ wallets. In February the amount of money credit card companies can’t collect from their customers reached a new peak; it’s never been this high during the last 20 years.
Though there are a lot of people who are against these measures. Banking lobbyists warn us that these new and tougher rules could make credit card lending more costly. This could slow down the recovery of the credit markets that are undergoing hard times. During the 2008 elections, the credit card sector gave about $7.3 million to lawmakers in both political parties. The company Visa spent $1.7 million on lobbying according to the government lobbying registries.
I really hope that these measures will be legalized. It’s unbelievable how much interest some of the companies ask. A lot of normal people just don’t know how easy it is to run up debts and are likely to spend more money than they can actually have. I also find that young adults shouldn’t be able to get their hands on a credit card; they don’t know the value of money yet and it’s really dangerous for them also to build up debts.
I can conclude that the credit card market needs governmental guidance for the safety of the average consumer.
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