Ford said on Thursday (19 March) it had added US$15.4bn of additional cash to its balance sheet, drawing from two credit lines, suspended its dividend to preserve cash and provide additional flexibility, withdrawn guidance for its 2020 financial results and launched a three month payment deferral for eligible US new car customers with three more paid by for up to six months of payment ‘peace of mind’.

The automaker said in a statement the initiatives would further bolster its cash position amid the coronavirus health crisis, maintain strategic flexibility, and set up the brand to separate itself from competitors when the global economy emerges from the current period of acute uncertainty.

“Like we did in the Great Recession, Ford is managing through the coronavirus crisis in a way that safeguards our business, our workforce, our customers and our dealers during this vital period,” said CEO Jim Hackett.

“As America’s largest producer of vehicles and largest employer of autoworkers, we plan to emerge from this crisis as a stronger company that can be an engine for the recovery of the economy moving forward.”

The company today told lenders it would borrow the total unused amounts against two lines of credit: $13.4bn under its corporate credit facility and $2bn under its supplemental credit facility.

The incremental cash from these borrowings will be used to offset the temporary working capital impacts of the coronavirus related production shut downs and to preserve financial flexibility.

“While we obviously didn’t foresee the coronavirus pandemic, we have maintained a strong balance sheet and ample liquidity so that we could weather economic uncertainty and continue to invest in our future,” Hackett said.

Ford has regularly described targets of having $20bn in cash and $30bn in liquidity heading into an economic downturn. At the end of 2019, those levels were $22bn and $35bn, respectively.

It has suspended the dividend to prioritise near term financial flexibility and continued investments in new product launches in 2020 plus long term growth initiatives.

Ford also said it was withdrawing the guidance it gave on 4 February for 2020 financial performance, which did not factor in effects of the coronavirus, given uncertainties in the business environment.

The company will provide an update on the year when it announces first quarter results currently scheduled for 28 April.

Ford this week announced plans to temporarily stop production at its plants in North America and Europe starting today. The actions were taken to protect the health and safety of employees and respond to issues with the supply chain and other constraints. The company said it would work with labour representatives to safely and effectively restart production in coming weeks.

Hackett noted China was the first country to face the virus and was now emerging from the crisis and showing improvements in automobile demand.

This news on the China recovery should be a source of optimism about the overall economic recovery as the virus abates, he said.

Separately, Ford and its US dealers are offering customers who are dealing with their own peripheral challenges from the coronavirus a variety of services, including six months of payment relief for new car buyers under the new Built to Lend a Hand programme.