Ford Motor Credit Company LLC,

d/b/a A trade name, trading name, or business name, is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is a "fictitious" business name. Registering the fictitious name w ...

Ford Credit, is the

financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...

arm of

Ford Motor Company Ford Motor Company (commonly known as Ford) is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobi ...

, and is headquartered in

Dearborn, Michigan Dearborn is a city in Wayne County in the U.S. state of Michigan. At the 2020 census, it had a population of 109,976. Dearborn is the seventh most-populated city in Michigan and is home to the largest Muslim population in the United States per ...

. The predominant share of Ford Credit's business consists of financing Ford and

Lincoln Lincoln most commonly refers to: * Abraham Lincoln (1809–1865), the sixteenth president of the United States * Lincoln, England, cathedral city and county town of Lincolnshire, England * Lincoln, Nebraska, the capital of Nebraska, U.S. * Lincol ...

vehicles and supporting Ford and Lincoln dealers. Specifically, its business activities are concentrated in the area of automobile financing for consumers and dealership inventory and leasing. Ford Credit competes mainly on the basis of service and financing rate programs, including those sponsored by Ford. A key foundation of its service is providing broad and consistent purchasing policies for retail installment sale and lease contracts, and consistent support for dealer financing requirements across economic cycles. These policies have helped Ford Credit build strong relationships with Ford's dealer network that enhance competitiveness. Ford Credit also provides commercial financing and lines of credit to dealerships selling Ford Motor Company products. The firm also issues

commercial paper Commercial paper, in the global financial market, is an unsecured promissory note with a fixed maturity of rarely more than 270 days. In layperson terms, it is like an " IOU" but can be bought and sold because its buyers and sellers have some ...

and other

debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...

instruments on Ford's behalf. Ford Credit also owns Lincoln Automotive Financial Services, the arm that finances

vehicles. Ford earned $2.63 billion EBIT with its Ford Credit segment in 2018, up from $2.31 billion in 2017. 2018 was the segment's highest full-year EBT in eight years. However, this upward trend may not last much longer as car sales continue to decline. Ford Credit's ROE, which fell from 22% in 2017 to 14% in 2018 forecasts the segment's coming decline.

History

Ford began its journey into auto financing by launching a Weekly Purchase Plan in 1923. The program was designed to allow people to pay a certain amount to the bank weekly up until they had saved for the cost of a car. In 1926 Henry Ford founded the ''Ford Credit Company AG'' in

Berlin Berlin ( , ) is the capital and largest city of Germany by both area and population. Its 3.7 million inhabitants make it the European Union's most populous city, according to population within city limits. One of Germany's sixteen constitu ...

. Ford had also constructed a new factory in Germany at that time, but most of the local population could not buy a car, Ford founded the bank to help finance a car purchase. Henry and

Edsel Ford Edsel Bryant Ford (November 6, 1893 – May 26, 1943) was an American business executive and philanthropist who was the son of pioneering industrialist Henry Ford and his wife, Clara Jane Bryant Ford. He was the president of Ford Motor Company f ...

became members of the board. In 1932 the now called ''Credit AG für Ford-Fahrzeuge'' and the factory moved to

Cologne Cologne ( ; german: Köln ; ksh, Kölle ) is the largest city of the German western state of North Rhine-Westphalia (NRW) and the fourth-most populous city of Germany with 1.1 million inhabitants in the city proper and 3.6 millio ...

. In 1962 it was renamed again to ''Ford Credit AG''. From 1975 to 1979, the company briefly was the owner of the

Houston Astros The Houston Astros are an American professional baseball team based in Houston, Texas. The Astros compete in Major League Baseball (MLB) as a member club of the American League (AL) West division, having moved to the division in 2013 after s ...

major league baseball team, as well as of its ballpark,

the Astrodome The NRG Astrodome, also known as the Houston Astrodome or simply the Astrodome, is the world's first multi-purpose, domed sports stadium, located in Houston, Texas. It was financed and assisted in development by Roy Hofheinz, mayor of Houston ...

, and various other properties around

Houston, Texas Houston (; ) is the most populous city in Texas, the most populous city in the Southern United States, the fourth-most populous city in the United States, and the sixth-most populous city in North America, with a population of 2,304,580 i ...

. This came about because Astros owner

Roy Hofheinz Roy Mark Hofheinz (April 10, 1912 – November 22, 1982), popularly known as Judge Hofheinz or "The Judge", was a Texas state representative from 1934 to 1936, county judge of Harris County, Texas from 1936 to 1944, and mayor of the ci ...

defaulted on a loan provided in 1972 by the Company in partnership with

GE Capital GE Capital is the financial services division of General Electric. The company currently only runs one division, GE Energy Financial Services. It had provided additional services in the past; however, those units were sold between 2013 and 2018. ...

. The default resulted from a downturn in the oil industry, and the creditors took over these various assets as a result. Senior loan officer Bill Odom, who would later rise to be the Chairman of Ford Motor Credit Company, acted as principal for the temporary ownership group, until the team was sold in 1979 to a group headed by John McMullen. The credit arm of

was created with the purchase of Associates First Capital Corporation from

Gulf+Western Gulf and Western Industries, Inc. (stylized as Gulf+Western) was an American conglomerate. Originally, the company focused on manufacturing and resource extraction. Beginning in 1966, and continuing throughout the 1960s and 1970s, the company ...

in 1989. Since the automotive industry crisis of 2008–10, Ford Credit has been the only financial arm of Detroit's "Big Three" still owned by its parent automaker after the spinoff of GMAC (now

Ally Financial Ally Financial is a bank holding company organized in Delaware and headquartered in Detroit, Michigan. The company provides financial services including car finance, online banking via a direct bank, corporate lending, vehicle insurance, mor ...

) by

General Motors The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...

and the purchase of

Chrysler Stellantis North America (officially FCA US and formerly Chrysler ()) is one of the " Big Three" automobile manufacturers in the United States, headquartered in Auburn Hills, Michigan. It is the American subsidiary of the multinational automotiv ...

Financial (now

TD Auto Finance TD Auto Finance is a financial-services provider. The company offers dealer finance plans, dealer services, and retail consumer finance plans. It is a subsidiary of Toronto-Dominion Bank. As Chrysler Financial, the company supported financial p ...

) by

Toronto-Dominion Bank Toronto-Dominion Bank (french: links=no, Banque Toronto-Dominion), doing business as TD Bank Group (french: links=no, Groupe Banque TD), is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario. T ...

References

External links

* * Financial services companies established in 1959 Companies based in Wayne County, Michigan Financial services companies of the United States

Credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...

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