Detroit (AP) -- Ford Motor Co. CEO Alan Mulally said Friday that the company is focused on conserving its cash and putting restructuring plans in place as it tries to weather the credit crisis and stock market decline.
Mulally said in an interview with The Associated Press that he is not worried about bankruptcy or a takeover, even as Ford's stock price hit their lowest level in 25 years.
He also said the company is not in danger of running out of cash because it has taken out a large line of credit and has other ways it could raise money through debt or equity to maintain cash flow.
"Cash is really, really important, so we are managing that very carefully,'' Mulally said. "We're clearly focusing on the cash, and everybody is working on minimizing the expenses to the absolutely critical things that are needed to implement our plans.''
The Dearborn-based automaker mortgaged its logo and other assets in 2006 to borrow $23.4 billion as it prepared to downsize to match lower demand for its vehicles. The company also is reworking its product line to shift more toward cars and crossover vehicles instead of trucks and SUVs, while at the same time globalizing product development and engineering to save money.
Ford plans to bring a full line of small cars to the U.S. from Europe, but they won't arrive until 2010.
Mulally said Ford is caught in a far bigger economic situation than just its own operations, and that the company never anticipated the economy deteriorating as fast as it did. But he said he is confident the Federal Reserve and government are taking the right steps to loosen up tight credit that has cut into vehicle sales and caused the stock market's decline.
"Ford is in the same position as most other equities, in that the consumer is very concerned right now about the economy and credit,'' he said. "From a stock point of view, the most important thing we can do is focus on our plan.''
Ford shares hit $1.88 Friday afternoon, the lowest level since April 1983, according to the Center for Research in Security Prices at the University of Chicago.
On Thursday, Ford's shares tumbled to $2.03 after Standard & Poor's Ratings Services warned the automaker's credit could fall further into junk status and investors fretted that the company may eventually be forced to file for bankruptcy protection. The shares ended the day at $2.08, a loss of 22 percent, as the Dow Jones industrial fell nearly 700 points.
Also on Friday, Ford said that Chief Financial Officer Don LeClair planned to retire, effective Nov. 1, after a 32-year career with the company. Lewis Booth, chairman and chief executive at Ford of Europe, was named as LeClair's replacement.
Ford has lost $23.9 billion in the past 2 1/2 years, due largely to restructuring costs. Its U.S. sales are down 17 percent through September, and its market share has dropped from about 26 percent in the early 1990s to around 12 percent last month.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
WWJ Newsradio 950 is Detroit's only all-news radio station and is the leader in Detroit radio news. Listen online to WWJ-AM 950 for live, local Detroit news, up-to-the-minute Detroit traffic, Detroit sports, Detroit business and Detroit community information. WWJ Newsradio 950 is an award winning radio station and you can listen online and podcast on demand Detroit news, Detroit Construction Alerts, Detroit School Closings, Winter Survival Guide and learn more about our Business Breakfasts. www.wwj.com.
