Ford Motor Co today asked Congress for a credit line of as much as $9 billion, saying it expects to break even or be profitable before taxes in 2011.
The automaker said it doesn’t anticipate a “liquidity crisis” in 2009, barring a competitor’s bankruptcy or more severe economic slump. Ford also plans to sell five corporate jets and would pay Chief Executive Officer Alan Mulally a $1 annual salary should the company need to access the loan.
“Government loans would serve as a critical backstop or safeguard against worsening conditions,” Mulally said in a statement. The Dearborn, Michigan-based company said it hopes to avoid having to tap the requested financing.
Ford, General Motors Corp and Chrysler LLC must convince a divided Congress that their plans to shrink are severe enough to ensure repayment of $25 billion in proposed US loans. Today is the deadline for turning in the proposals, and a vote on the aid may come next week.
Ford rose 29 cents, or 11 per cent, to $2.80 at 11:15 am in New York Stock Exchange composite trading.
The second-largest US automaker’s plan also includes investing about $14 billion in the next seven years to improve its vehicles’ fuel efficiency and focusing on its namesake brand through efforts such as exploring the sale of its Volvo unit.
The automaker also said it’s in talks with the United Auto Workers union on further labor-cost reductions.
The UAW called an emergency meeting for tomorrow to consider concessions that make it less expensive to eliminate jobs, people familiar with that session said. The companies will report November sales today that probably extended a 15 per cent slide through October.
“Our expectation is that they go and duly genuflect and appear to be repentant,” said Eric Noble, president of Car Lab, an Orange, California-based consulting firm for automakers including GM, Chrysler and Toyota Motor Corp.
