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April 1, 2010

NEW YORK SHOW: Ford can speed debt repayment – Mulally

Ford Motor chief executive officer Alan Mulally has said the automaker would be able to speed up debt repayment as its financial results improve.

Ford Motor chief executive officer Alan Mulally has said the automaker would be able to speed up debt repayment as its financial results improve.

Ford borrowed over $23bn in late 2006, putting up nearly all of its remaining assets, including the familiar blue oval logo, to maintain a cash cushion for its turnaround, Reuters reported.

The leveraging of its assets, and the government-supported reorganisations of General Motors and Chrysler, left Ford with far more debt than its U.S. rivals, but it surprised analysts with a small profit in 2009.

Mulally repeated Ford’s forecast for a profit in 2010 and expectations for it to be “solidly profitable” in 2011.

“So we can accelerate the repayment of the debt and improve the balance sheet,” Mulally told Reuters at the New York Auto Show. “We know we are paying a little bit more interest than some of our competitors right now, but again that was the plan.”

Addressing what executives have called an uncompetitive balance sheet is a priority for Ford, but one that executives have said will follow consistent profits. They have described the turnaround as in its early stages.

On Monday, Ford said it would prepay $3bn of revolving debt on 6 April. The automaker had about $34.4bn of automotive debt at the end of last year, the news agency reported.

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