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Ford tells Congress profit returns in 2011

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Ford tells Congress profit may be restored in 2011

DETROIT -- Ford Motor Co., the first of the Detroit 3 to submit its plan to qualify for federal aid, says it doesn't expect to make money until at least 2011.

That's when Ford expects global and North American auto businesses to reach break-even or be profitable on a pretax basis, according to a news release summarizing its plan to Congress. In May, Ford abandoned a previous pledge to post a profit in 2009. The automaker has lost money every year since 2005.

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Ford also said it is asking Congress for access to as much as $9 billion in federal loans. The company stressed that management hopes to complete its turnaround without accessing the loans.

"For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions as we drive transformational change in our company," Ford CEO Alan Mulally said in the release.

Selling the jets

Mulally said he would work for a salary of $1 a year if Ford draws money from a potential federal loan pool. Ford also said today that it would sell its five jets.

Those moves are responses to widespread criticism of the Detroit 3 after Congressional hearings in November on federal bailout money for the automakers.

The CEOs of Ford, General Motors and Chrysler LLC were lambasted for traveling to the hearings in separate corporate jets. Mulally plans to make the nine-hour drive to Washington in a Ford Escape Hybrid for another round of Congressional hearings this week.

The high pay packages of the Detroit 3 CEOs also came under scrutiny during the hearings. At that time, Mulally declined to work for less than his $2 million salary, saying "I think I'm OK where I am." Mulally's total compensation package was $21.7 million in 2007.

Ford reiterated that it would continue the turnaround plan Mulally implemented after arriving from Boeing in September 2006. A key tenet of that plan is to accelerate the development of new products that customers want. As part of that, Ford has said it will introduce several small European-developed cars in the United States beginning in early 2010.

Technology spending

Today, Ford said it would spend $14 billion in the United States on advanced technologies and products to improve fuel efficiency during the next seven years. That includes a plan to make available for sale a family of new hybrids, plug-in hybrids and battery electric vehicles by 2012.

Ford said it will partner with suppliers to deliver a full battery electric van for commercial fleet use in 2010 and an electric sedan in 2011.

Ford also said it is discussing with the UAW ways to further reduce costs and eliminate the remaining labor cost gap existing between Ford and import-brand automakers.

Ford said it doesn't anticipate a liquidity crisis in 2009 barring a bankruptcy by General Motors or Chrysler LLC -- or a more severe economic downturn that further hurts auto sales. It expects U.S. industry sales of 12.5 million vehicles in 2009, bouncing back to 14.5 million vehicles in 2010 and 15.5 vehicles in 2011.

Ford finished the third quarter of 2008 with $18.9 billion of cash and another $10.7 billion in available credit lines. The automaker burned through $7.7 billion in cash during the third quarter, a rate of $2.57 billion a month.

'Home improvement loan'

Ford wants to convince Congress and U.S. taxpayers that it should be seen as "different" from GM and Chrysler. To that effort, Ford today launched a new web site, www.thefordstory.com. It includes a youtube.com video of CEO Alan Mulally talking about Ford's turnaround vision.

In the video, Mulally said Ford is asking for access to federal loans in part because the failure of GM or Chrysler could have a "domino effect" on Ford.

"I like our position today, as tough as it is," Mulally says in the video. He talks about the $23 billion "home improvement" loan Ford took out two years ago to finance its turnaround and the development of new products.

"Now we have in the pipeline what arguably everybody believes is the best product lineup we've ever had at Ford," he said. "I'm just so glad that we all pulled together early so that we are ready to take on the worst of times. And we'll get through this and we'll come out the other end as a turbo machine."

Mulally's YouTube Video

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Again, I think it's asinine that He should take a paycut when the CEO's of the banks weren't criticized for the millions more they make annually, and the whole jet thing.

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Thanks for posting that DF, much appreciated.

No problem!

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This topic hints on something that I think the Big 3 should strive to do... Distance themselves from on another in the mind of the consumer.

Ever hear the saying "You're only as strong as your weakest link"

GMs excellent strides in product development have been overshadowed by the lack there of at Chrysler and Ford. Just as GM and Chryslers bad financial position are casting negativity on Ford.

And, of course, the media cashes in on this as much as they can.

These companies need to be viewed as seperate entities again, not one HUGE swath of 'crap'

Edited by FUTURE_OF_GM
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GM is making provision for truly dismal industry sales in 2009 in its plans, but Ford is not. That could make all the difference financially.

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Did Ford ever sell their stake in Mazda?

I heard that Volvo was on the chopping block as well.

I don't want to see Ford shed either company.

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