Ford won’t take bailout money

Ford is confident it can get through the recession without government loans.

DEARBORN, Mich. (AP) — By shunning government loans, Ford Motor Co.’s top executives say they hope to buff up the automaker’s image and set it apart from its cash-starved Detroit competitors, General Motors Corp. and Chrysler LLC.

GM and Chrysler are in desperate need of government money and may not last until the end of the year without it. But Ford set up $23.5 billion worth of credit in 2006, and both Chief Executive Alan Mulally and Executive Chairman Bill Ford Jr. told The Associated Press they are confident that the borrowing, coupled with restructuring and new product plans, will get them through the recession without relying on the government.

Ford even said the century-old company that bears his family’s name might be able to use the independence from loans to its advantage.

“I think if they see Ford as a company trying to pull itself up by its own bootstraps, and making it on its own and pulling the right levers, I think that could be a positive for us,” Ford said.

Mulally said Ford has completed much of the restructuring that Congress is demanding of the other two, slimming down its brands by selling Jaguar, Land Rover and Aston Martin and studying the sale of Sweden’s Volvo.

Ford, he said, has cut its factory capacity to match demand, and it anticipates no further cuts will be necessary as long as the U.S. auto market doesn’t worsen considerably. The company has announced the closure of 17 factories and eliminated 50,000 jobs since 2005, many through buyout and early-retirement offers.

The interviews came as weary Democratic congressional leaders cleared the final obstacles to a $15 billion bailout of Chrysler and GM.

Among the requirements in the Democrats’ proposed legislation is the appointment of a “car czar” to oversee Chrysler and GM with authority to yank the loans if the companies don’t make substantial progress toward restructuring.

Both companies are likely to seek further concessions from the United Auto Workers and their creditors in order to justify the government money and prove themselves viable.

But Mulally said Tuesday he would expect the same concessions from the union even though Ford wouldn’t be under government supervision.

“The UAW supports the entire industry. They represent employees at all three companies. I can’t imagine being disadvantaged on that,” Mulally said. “I would think whatever’s done on that we would continue to do together because they support all of us.”

Mulally appeared before Congress last week with the CEOs of GM and Chrysler, and said he did so to support the other automakers and to line up a government loan just in case the economy worsened and Ford might need the money in the future. If one or both of the others go into bankruptcy, it could drag down parts suppliers and force Ford into the same situation, Mulally said.

Mulally said that two years ago Ford took its plan — similar to the one it submitted to Congress last week — to 40 banks in an effort to get financing to unify its production system and for research and development. It originally estimated a need for $17 billion, but raised additional funds just in case.

“None of us thought it would go as deep as it was going to go and we would have to use it all,” Mulally said. “To finance this transformation of Ford on the production system to match demand and get back to profitability, and finance our accelerated product development. That’s what led to doing it and doing it at that time.”