On Dec. 9, Ford Motor Company submitted to Congress its comprehensive business plan, which details the company's plan to return to profitability and outlines 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.
In the plan, Ford said the transformation of its North American automotive business will continue to accelerate through aggressive restructuring actions and the introduction of more high-quality, safe and fuel-efficient vehicles – including a broader range of hybrid-electric vehicles and the introduction of advanced plug-in hybrids and full electric vehicles. Ford President and CEO released this statement regarding Ford's new plans: http://www.fordvehicles.com/thefordstory/.
Ford is asking for access to up to $9 billion in bridge financing, but reiterated that it hopes to complete its transformation without accessing the loan should Congress agree to make the funds available.
Despite the serious global economic downturn, 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 and create additional cash challenges.
In the plan submitted to Congress, Ford reiterated that its One Ford transformation plan remains fully in place, anchored by four key priorities:
- Aggressively restructure to operate profitably at the current demand and changing model mix;
- Accelerate development of new products our customers want and value;
- Finance our plan and improve our balance sheet; and
- Work together effectively as one team, leveraging our global assets.
Ford's submission to Congress included new details about Ford's future plans and forecasts, including:
- Based on current business planning assumptions – including U.S. industry sales for 2009, 2010 and 2011 of 12.5 million units, 14.5 million units and 15.5 million units, respectively – 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.
- As part of a continuing focus on building the Ford brand, the company said it is exploring strategic options for Volvo Car Corporation, including the possible sale of the Sweden-based premium automaker. The strategic review is in line with a broad range of actions Ford is taking to strengthen its balance sheet and ensure it has the resources to fund its plan. Since 2007, Ford has sold Aston Martin, Jaguar, Land Rover and the majority of its stake in Mazda.
- Ford's plan calls for an investment of approximately $14 billion in the U.S. on advanced technologies and products to improve fuel efficiency during the next seven years.
- Half of the Ford, Lincoln and Mercury light-duty nameplates by 2010 will qualify as "Advanced Technology Vehicles" under the U.S. Energy Independence and Security Act – increasing to 75 percent in 2011 and more than 90 percent in 2014. Ford said it has included these projects in its application to the Department of Energy for loans under that Act and hopes to receive $5 billion in direct loans by 2011 to support Ford's investment in advanced technologies and products.