An electric van for commercial fleet use could even be on the street by 2010, according to the new plan, but to bring about the newly accelerated focus on hybrids, electric vehicles and profitability, the company will need an investment of about $14 billion.
Part of that cash influx will come from the sale of its corporate aircraft and an 'overall cash improvement plan.' The remainder, about $9 billion, will have to come from government-secured bridge financing - though Ford is committed to making its transformation without actually touching the funds. It simply needs them to be available to leverage the projects it has planned.
In fact, Ford says it does not see a serious problem with liquidity in 2009 unless one of its major competitors were to declare bankruptcy - a move which would severely strain the domestic supply chain and have repercussions on Ford's business.
“For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company,” said Ford President and CEO Alan Mulally ahead of his testimony before Congress, due later this week.
Key elements of the Ford plan include market forecasts of 12.5 million cars sold in 2009, 14.5 million in 2010, and 15.5 million in 2011 - indicating that Ford, at least, sees 2009 as the turnaround year, with a slow return to normal volume levels over the ensuing 2-3 year period.
Another part of the plan to return to profitability include the possible sale of the Volvo brand, as reported yesterday. The sale would follow the sale of Aston Martin, Jaguar, Land Rover and most of its stake in Mazda, all of which have taken place since 2007.
Ford also guarantees that half of its entire fleet - including Lincoln and Mercury vehicles - will meet the federal 'Advanced Technology Vehicle' standard by 2010, and over 90% of its cars will do so by 2014, reflecting its acceleration of hybrid and electric technologies to commercial and consumer markets. The overall fuel savings from the shift to advanced technology vehicles is estimated to be 16 billion gallons compared to the 2005 fleet.
Finally, Ford will close more plants and lay off more workers in addition to reducing its dealer and supplier network to improve efficiency and reduce overhead. These reductions in the production and sales networks will net a large portion of the $5 billion in cash to be raised in addition to the $9 billion financing sought. By year's end, Ford will have cut its dealer ranks by 606 to 3,790, it says. Supplier ranks have been cut from 3,400 in 2004 to about 1,600 today, with final targets of 750 suppliers available for major contracts.
As an additional gesture, Ford CEO Alan Mulally will take a salary of $1 per year if necessary to secure the government bridge loans, as a sign both of his commitment to the turnaround and his confidence in Ford's ability to transform. All bonuses to be paid in 2009 are also off the table for management worldwide and all employees in North America.
“While we clearly still have much more work to do, I am more convinced than ever that we have the right plan that will create a viable Ford going forward and position us for profitable growth,” said Mulally.
Reader Comments
Tue Dec 2 2008 11:53 AM
Chris says
if ford markets a Volt rivaling EV in Focus underpinnings for late 2010, i may just be charging my next car. i dont care the price.
i'm liking what i see here. really. i want to go to dearborn to high five mulally
Tue Dec 2 2008 2:37 PM
Laz says
All my cars for the last 14 years have been Japanese with the exception of one Jeep. I will most likely buy a Ford F150 in the near future to help support them...
Tue Dec 2 2008 8:46 PM
Roy says
Sure, it sounds fine, but the UAW problem has not been addressed. I've dealt with these bloodsuckers firsthand and they just need to be removed from the equation.
Wed Dec 3 2008 7:45 AM
Chris says
laz.. you're going to get an F150? of all the cars.. why an F150?! i mean if you want/need a pick up.. great.. but if you're going to buy a ford to support them.. id really suggest going with as valuable of a small car as you can stand.. get a fully loaded fusion or focus.. send them a message that small cars sell.. and people want to spend big money on them!
roy.. i agree.. the union's basic purpose died 60 years ago. USA and canada have strong enough workplace safety and worker rights laws that theres no point for it. lawmakers should address the amount of power and freedom that unions are given. they take down a company either quickly by striking of slowly by bleeding them dry.
however, being the son of a CAW worker.. i have to say that middle management needs a shake too. my dad got written up recently for "being unproductive". he's a skilled tradesman who was on location at a machine, ready to work, but he had to wait for another type of skilled tradesman to arrive to do his portion of the work too. being in a union, my father can't do the other person's job because my father wasnt hired for that purpose, despite having the ticket to perform that task. my dad had to go to the union stewart to have the whole case thrown out otherwise he would have been given a one day suspension....... all for obeying all of the rules.
if middle management cant be reasonable, there is still a place for unions, but for them to be able to threaten a strike every 3 years because their demands for more money and health benefits will not be met carte blanche.. is complete horse manure.
dont think of auto union workers as lazy.. the same union that they rely on to give them job security has tied their hands when it comes to being able to take enitiative and do something themselves. a production worker cant pick up a broom and sweep an area cause thats some one elses job. my dad, a millwright, can't run a weld because there are welders for that.
the problem that is never addressed is what if there isnt anyone available to do that work.
Thu Dec 4 2008 4:05 PM
joshluvsamcars1 says
heres how i would use the money to revamp the lineup.
FORD
keep the fiesta,focus,fusion,taurus,and mustang. bring the ka, c-max, kuga, and s-max to the U.S.. create a car to slot above the mustang. kill the ranger and produce the f100, move the sport trac on the same platform as the explorer crossover that comes out next year, and kill the escape but keep the hybrid. redesign the edge and the flex and make the expedition more efficient. come out with the electric commercial van and bagde it as e-series, only the e-series fleets are selling now. bring the transit connect here sooner than planned, and keep working for better mpg's on the f-series trucks. as for the crown vic and its successor, who needs em. get the electric sedan on the market as fast as you can and hybrid the taurus and make a taurus wagon, and relaunch the thunderbird. for mercury, kill the sable, mountaineer, mariner. bring a focus twin and a kuga twin to the lineup. keep the milan hybrid only, and relaunch the cougar, based off the mustang of course. for lincoln, kill the mkz and create a small sedan based off the mustabg's platform, keep the mks, redesig the town car, make the mkx more unique and redesign the navigator and base it off the explorer crossover. come out with a trendy roadster based off the new thunderbird, andcall it mark. and move lincoln more upscale. sell volvo for morethan 6 billion and sell off other things as well.
Leave a Comment
Login or register to leave comments.
Please keep your comments on topic. Your involvement is governed by our Privacy Policy and Terms.