Dearborn, Michigan – The Ford Motor Company has submitted a comprehensive business plan to the U.S. Congress, detailing the company’s plan to return to profitability, and an outline of a request for potential access to a temporary bridge loan, in case the current economic crisis worsens or there is a bankruptcy of a major competitor.
Ford is asking for access of up to US$9 billion in bridge financing, but said that it hopes to complete its transformation without accessing the loan, should Congress agree to make the funds available. The automaker said that despite the economic downturn, it does not anticipate a liquidity crisis in 2009, barring bankruptcy by one of its domestic competitors or a more severe economic downturn.
In the plan, Ford said it will continue to transform its North American automotive business through aggressive restructuring and the introduction of more fuel-efficient vehicles, including a broader range of hybrid-electric vehicles, and the introduction of advanced plug-in hybrids and full electric vehicles.
Details of the submission include:
– Ford expects both its overall and its North American automotive business pre-tax results to be breakeven or profitable in 2011, excluding any special items, based on current business planning assumptions, including U.S. industry sales of 12.5 million units for 2009, 14.5 million for 2010, and 15.5 million for 2011.
– The company is exploring strategic options for Volvo, including the possible sale of the company. Since 2007, Ford has sold Aston Martin, Jaguar, Land Rover, and the majority of its stake in Mazda.
– An investment of approximately US$14 billion in the U.S. on advanced technologies and products to improve fuel efficiency during the next seven years.
– Half of its light-duty nameplates will qualify at “Advanced Technology Vehicles” under the U.S. Energy Independence and Security Act by 2010, increasing to 75 per cent in 2011 and more than 90 per cent in 2014. Ford has included these projects in its application to the Department of Energy for loans under that Act and hopes to receive US$5 billion in direct loans by 2011.
– Ford will improve the fuel economy of all of its fleet by an average of 14 per cent for 2009 models, 26 per cent for 2012 models, and 36 per cent for 2015, when compared with the fuel economy of its 2005 fleet.
– The company will discuss in detail its accelerated vehicle electrification plan at the North American International Auto Show in Detroit, which includes bringing a family of hybrids, plug-in hybrids and battery electric vehicles by 2012.
– Ford is currently engaged in discussions with the UAW with the objective to further reduce its cost structure and eliminate the remaining labour cost gap that exists between Ford and the transplants.
– As was previously announced, the company plans two additional plant closures this quarter, and four additional plant closures between 2009 and 2011, and intends to close or sell what will be four remaining ACH plants.
– Ford will continue to work to reduce its dealer and supplier base to increase efficiency and promote mutual profitability, with a reduction of 606 dealers overall by the end of 2008.
– The company confirmed that it has decided to sell its five corporate aircraft.
– Ford CEO Alan Mulally announced that, should Ford need to access funds from a potential government bridge loan, he will work for a salary of US$1 per year as a sign of his confidence in the company’s transformation plan and future.
– The company will cancel all bonuses to be paid in 2009 for all management employees worldwide, forego bonuses for all employees in North America, and not pay merit increases for North America salaried employees in 2009.