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Ford Motor Co., despite losing more than $26 billion over the last two years, still has no intention of asking for government assistance but will instead draw down 10.1 billion in existing credit lines. “It’s a very volatile market,” says Ford Chairman Alan Mulally. “It’s not in our plan at all to access federal funds,” he said even though “business conditions have deteriorated around the world more rapidly than expected.”
Ford reported it lost $5.9 billion, or $2.46 per share, in the fourth quarter of 2007 due to declining domestic demand, restructuring charges and losses at its overseas subsidiaries. For the full year Ford lost $14.6 billion as it revenues shrank by 36 percent. The latest losses, Ford’s already steep mountain of debt—some $26 billion —and the industry’s shaky financial condition are all stirring anxiety among investors, lenders, and potential car buyers. Yet Mulally stresses that Ford is in a better strategic position than its struggling rivals.
GM and Chrysler are expected to present preliminary plans to the Treasury by Feb. 17 demonstrating their viability, and final plans in March, if either of those plans fails to convince the federal government, a bankruptcy filing could follow. Such a huge negative event might prompt Ford to reconsider its position, says Mulally, but otherwise it expects to avoid asking for emergency federal aid.
43.Investors, lenders, and potential car buyers are quite confident in Ford.