   |
Ford Says It Can Make It Without a Merger
DEARBORN, Mich. — With United States vehicle sales down nearly 13 percent this year, most car companies have been cutting production rather than increasing it.
But with 1,200 hourly workers cheering them on, top executives of the Ford Motor Company said Thursday at the ceremonial introduction of a new version of Ford's most important product, the F-150 pickup, that they would call back 1,000 laid-off workers to help build more trucks.
"You're going to pull us out of this by building the best truck that's ever been built," William Clay Ford Jr., Ford's executive chairman, said to the crowd at the River Rouge assembly complex.
While its Detroit rivals General Motors and Chrysler wrestle over terms of a possible merger and seek help from Washington to survive the steepest downturn in the industry in decades, Ford says it can survive, and thrive, on its own.
Ford executives and directors rejected overtures in August to join forces with G.M., choosing instead to focus on better coordinating its own far-flung global operations, where it sees considerable potential to cut costs and improve quality.
"Our biggest opportunity is to make sure we integrate Ford," said Mark Fields, president of Ford's Americas division. "Merging Ford is our Job 1."
Ford is gearing up for a new-product blitz that will replace 40 percent of its production with fresh models by next year. And the company — sandwiched between the bigger G.M. and the smaller Chrysler in Detroit's traditional Big Three — hopes to take advantage of the potential merger of its rivals and the distractions that come with it.
"I don't know what they're going to be spending their time on if they're merging," said James Farley, Ford's vice president for sales and communications. "But I know we're spending our time on launching products."
Ford's tough talk, however, cannot mask its own continuing problems.
Its United States sales have dropped 17.2 percent this year, and the company lost $8.6 billion in the first six months of the year. It is expected to report another big quarterly loss next week.
And the merger discussions between G.M. and the owner of Chrysler, the private equity firm Cerberus Capital Management, underscore the woeful state of the overall industry.
G.M. and Chrysler are determined to merge to cut costs and ensure their long-term survival, according to people with knowledge of the merger discussions.
The talks, which began more than a month ago, appear to hinge on whether the automakers can get financial aid from the federal government. G.M.'s chairman, Rick Wagoner, has lobbied the Treasury Department and other federal agencies for as much as $10 billion in assistance to support the deal.
Michigan's governor, Jennifer Granholm, attended Ford's event Thursday and said that aid from Washington was crucial for Detroit.
She was among six governors from states with large automotive operations who sent a letter this week requesting immediate aid from Treasury and the Federal Reserve.
"We need to get some quick loans so that the industry can get make it through these next 6 to 12 months," she said.
Ford executives have said they expect their company to have access to any loans that might be made to G.M. and Chrysler. But Ford, despite its losses and sinking sales, is not in as dire shape as its two domestic competitors.
Under Alan R. Mulally, who became chief executive two years ago, Ford has streamlined its operations by selling its luxury-vehicle divisions Jaguar, Land Rover and Aston Martin.
Ford also borrowed heavily to improve its cash position before the credit markets collapsed. At the end of June, Ford had $26.6 billion in cash while the much larger G.M. held $21 billion.
While G.M. is burning through $1 billion in cash each month and could exhaust its reserves by next year, Ford has somewhat more time to execute its turnaround plans.
But with the auto market expected to continue to deteriorate into next year, Ford's time is running short.
Moody's Investors Service said this week that it was considering downgrading Ford's credit further into junk bond status because the automaker was spending an estimated $500 million in cash each month.
Ford is counting on a wave of product introductions to increase its revenue during the market downturn.
In addition to the F-150, Ford is bringing out new versions of its Taurus and Mustang passenger cars next year and accelerating development of a series of new smaller, more fuel-efficient vehicles.
Analysts say they believe Ford has some opportunity to take market share from G.M. and Chrysler if the two companies merge and go through a prolonged restructuring.
"Ford could definitely make some hay while all the turmoil is going on at G.M. and Chrysler and they try to put those two companies together," said Joseph Phillippi, principal in the consulting firm AutoTrends in Short Hills, N.J.
Ford is moving faster than its rivals to replace its big, gas-guzzling S.U.V.'s with small cars. But any hope Ford has for a revival depends largely on strong sales of its new F-150 pickup. Sales of the F-150 have fallen nearly 27 percent this year, as consumers have fled from bigger vehicles of all types.
But through the first nine months of the year, the F-series was still the top-selling vehicle in America. The new version, Ford executives said, is aimed directly at buyers who need trucks for work and other practical purposes, rather than because of their macho image.
"We're not going after those 'never, never' customers, meaning those people who have never hauled anything or never towed anything," Mr. Farley said.
