CEO: Ford Turnaround Plan Is on Track
Wednesday, April 4, 2007; 12:50 PM
NEW YORK -- Ford Chief Executive Alan Mulally, acknowledging an ongoing "tough transition" for his company, said Wednesday that the automaker's sweeping turnaround remained on track.
"This is a massive, massive restructuring of Ford and generally it's going, it's going pretty well. It's really hard, it's really difficult but it's the right thing to do," Mulally said in a speech at the New York International Auto Show.
Ford Motor Co., which has announced plans to shutter 16 plants, lost $12.7 billion last year and mortgaged its factories, brand names and other items to secure a $23.4 billion line of credit to fund its restructuring plan and cover losses expected until 2009. Mulally billed it "the biggest home improvement loan in the history of mankind."
The Dearborn, Mich.-based company also announced last month that it was selling a controlling stake in Aston Martin in a deal valued at $925 million. The sale has spawned speculation among analysts that Ford may sell its Jaguar brand, but Mulally said Ford was "100 percent behind it."
Mulally said the ongoing restructuring plan represented a "tremendous upheaval for the employees of Ford," paring its work force from 100,000 to 65,000 to 70,000 workers.
Heading into major contract talks with the United Auto Workers this summer, Mulally said he "couldn't be more pleased about the relationship" with union leaders.
He said he remained mindful of the nation's economic health, because "the housing starts, the construction industry, all these things influence purchasing decisions." Mulally said the economy was "a little bit softer now" and it was affecting sales slightly, but he thought the economy looked "pretty good" through the remainder of the year.
Ford's sales have remained sluggish. The automaker's March sales were down 9 percent, but Mulally noted good sales for its new mid-size cars, including the Ford Fusion, Mercury Milan and Lincoln MKZ, as well as its new Ford Edge and Lincoln MKX crossovers.
The CEO said the company was moving away from its past reliance upon trucks and sport utility vehicles and was stabilizing its market share to about 14-to-15 percent.
During the show, Ford showed off its new crossover vehicle, the Ford Flex, and some limited edition vehicles, including the Shelby GT500KR Mustang, to attract fans of custom vehicles.
Mark Fields, Ford's president of the Americas, said the Flex, featuring three-row seating for seven passengers and unique attributes such as a small refrigerator, would be a "game-changer" in the crossover segment.
"Ford intends to be the defining crossover company this decade, just as we defined SUVs in the 1990s," Fields declared.