Ford CEO Alan Mulally’s ‘to do’ list for 2010 includes ‘reduce long-term debt’ and ‘get cashflow into line with FedHelped Detroit rivals’, according to a report from the Washington motor show.
He told Reuters Ford was planning balance sheet improvements that would hasten as the bottom line became healthier while, for now, the automaker could live with a “little bit of a disadvantage” on the “cash side” compared with General Motors and Chrysler, both recipients of federal government bailout money last year.
“The advantage we have by running a healthy business far outweighs a couple of disadvantages right now. We honoured our bondholders, our stockholders, and our banks that supported us. We honored our dealers,” Mulally said of the company’s decision to shun government-backed restructuring.
“We are paying back our loans. We are paying back our loans,” he emphasised to an audience including senior US lawmakers and government officials.
Rather than accept taxpayer dollars and a federally supervised Chapter 11 bankruptcy restructuring like its local rivals had to last year, Ford in 2006 borrowed over $23bn from traditional sources to finance its turnaround and won generous concessions from the key United Auto Workers (UAW) union.
GM earlier this week said it would repay $5.7bn in remaining government debt by June.
Ford has, however, won $5.9bn in government loans to help refit factories to make more fuel efficient vehicles – some of that funding is behind plans announced earlier this week to shift the next generation Explorer SUV – a lighter monocoque design with more fuel-efficient EcoBoost engines – from Louisville to Chicago later this year and build new C-segment European designed cars at the Kentucky plant.
Mulally would not discuss fourth quarter results due out tomorrow but told Reuters January US sales were running slightly behind December and ahead of equivalent 2009 volume.
He added Ford gained market share in 2009, was making money on hybrids, remains on track to be solidly profitable in 2011 and was sticking to its industry sales forecast of between 11.5m and 12.5m units in the US this year.