FORD CEO VOWS $1 a year Salary
DETROIT – Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when the Detroit Three automakers' CEOs appear before lawmakers this week to request $25 billion in government loans.
Ford CEO Alan Mulally said he'll work for $1 per year if the company has to take any government loan money.
After grilling the CEOs at hearings last month, Congressional leaders demanded plans from the automakers by Tuesday to show that they will survive if they get federal funds. The plan Ford submitted said the company will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.
The company also said it will sell its five corporate aircraft. The CEOs of all three Detroit automakers were harshly criticized during last month's hearings for flying to Washington in separate corporate jets.
Mulally said in an interview with The Associated Press on Tuesday that Ford will give much more detail to Congress than it did previously, and the company will emphasize the steps it has taken to cut its labor costs with the United Auto Workers union.
Mulally said Ford will seek $9 billion as its share of the loan money but may not need to use it. The Dearborn-based company has said it has enough cash to make it through next year without assistance.
As part of the plan submitted to Congress, Ford said it does not anticipate a liquidity crisis in 2009, "barring a bankruptcy by one of its domestic competitors or a more severe economic downturn that would further cripple automotive sales." The loan would provide a safeguard against worsening conditions, the company said.
The company said it will accelerate plans to roll out electric vehicles as part of its plan.
"We are going to do that across our product line," Mulally said in the interview.
The first plug-in vehicle will be a Transit Connect small van for commercial use in 2010 and a car the size of the Ford Focus compact the following year.
Ford also said it will accelerate plans for hybrid gas-electric vehicles.
Mulally said he will encourage automakers and parts suppliers to join forces to develop new battery technologies in the U.S. for future electric cars so the country doesn't rely on foreign batteries.
"We don't want to trade oil for batteries," he said.
Ford's plan calls for an investment of up to $14 billion to improve fuel efficiency over the next seven years. The company said would improve the overall efficiency of its fleet by an average of 14 percent in 2009.
The CEOs of the Detroit Three are scheduled to appear before congressional committees Thursday and Friday. Chrysler LLC and General Motors Corp. have said they are perilously low on cash and need the government loans to survive the recession and the worst auto sales environment in 25 years.
GM and Chrysler were to submit their plans to Congress later in the day. At an appearance in Baltimore on Tuesday morning, Chrysler President and Vice Chairman Jim Press didn't give details of the business plan that Chrysler will present, but said it will tackle product mix, vehicle pricing and quality and fiscal responsibility.
Press said all players, including banks and labor, have agreed to "all the concessions that are necessary."
The CEOs were skewered on their first visit in November, when lawmakers criticized them for high labor costs and products that aren't competitive with foreign automakers.
"I think we learned a lot from that experience," Mulally said in the interview, adding that the CEOs were there last time to discuss the progress of the industry, not a plan for viability.
Ford's new plan is 32 pages long, plus an appendix, and it includes much detail that was lacking during the first visit.
The company says its plan to achieve profitability or break even by 2011 is based on industrywide sales estimates of 12.5 million units in 2009, 14.5 million in 2010 and 15.5 million in 2011. The seasonally adjusted annual sales rate dropped to 10.6 million vehicles in October.
Ford shares rose 25 cents, or 9.8 percent, to $2.80 in midday trading.
Ford's plan said it will reduce its number of dealers by 606 to 3,790 by the end of the year. It will also trim the number of major sourcing suppliers it uses to 750 from 1,600.
Ford reiterated its intention to offload Volvo, by either selling the Swedish automaker or spinning it off into a separate company. Since 2007, Ford has sold its Jaguar, Aston Martin and Land Rover lines. It also sold most of its stake in Mazda.
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If they really are serious about bringing the transit connect over that will be awesome.
Originally Posted by Total_Blender
