Ford chief executive Alan Mullaly yesterday joined the call for a motor industry bridge loan from the US government to help American carmakers through the current financial crisis
Speaking before the US Senate committee on banking, housing and urban affairs, Mullaly said that should one US car maker collapse, it would affect all others and send a disastrous ripple through the American economy.
“We suggest the loans be structured in a revolving format, so exposure to the taxpayer would be limited – and, if used, would be repaid with interest.”
Mullaly said Ford hopes that it has enough liquidity. “But we also must prepare ourselves for the prospect of further deteriorating economic conditions in 2009.
“The (American) auto industry is highly interdependent. A collapse of one of our competitors would not only affect Ford and our transformation plan, but would have a devastating ripple effect across the economy.
Mullaly says Ford is already well-advanced on an aggressive cost-cutting and business redevelopment plan.
“With your help, we will create a safeguard to deal with the growing economic uncertainty, while all of us at Ford continue to deliver on our plan to create a thriving auto business for the benefit of all of us.”
Mullaly told the senate committee he believes the US auto industry has “a competitive and sustainable future.
And the “provision of government assistance to help bridge the domestic auto industry through these difficult economic times (is) more favourable to our nation than the costs of inaction.”
Mullaly said that as a relative newcomer to the car industry he sees the auto business and its transformation clearly.
“I see parallels with what I witnessed at Boeing after the 9-11 tragedy and the steps we took to transform the commercial airplane business. (The) transformation at Ford is even more aggressive.”
He said Ford plans to operate profitably at the current lower demand and changing model mix and accelerate the development of safe, fuel-efficient, high-quality new products.
“Our goal is to create a viable Ford Motor Company and a lean global enterprise delivering profitable growth for all.”
Ford has closed 17 plants, cut its workforce by 51,000 and negotiated a new contract with the UAW (United Auto Workers union) to improve the company’s competitiveness.
He said that this week, Ford unveiled two all-new hybrids at the Los Angeles motor show, and is submitting an application for direct loans, authorised by Congress last year, to help speed advanced technologies and vehicles to market.
On Friday, it ends large SUV production at the Michigan Truck Plant and begins converting to fuel-efficient small car production.
“As a result of all of our actions, we were profitable in the first quarter of this year and well on our way to sustainable profitability before the economic and credit crisis hit.
“We have taken decisive action to deal with this new reality. We have cut production. We have further reduced employment. We have eliminated raises and bonuses for 2009.”