WASHINGTON, D.C., Nov. 18 – "Thank you Mr. Chairman, Senator Shelby and members of the Committee. I appreciate the opportunity to be here representing the Ford Motor Company.
As you know, the auto industry has been heavily affected by the turmoil in the financial markets. Much of the recent commentary has suggested that our companies "need a new business model."
I completely agree. In fact, we at Ford are well on our way to transforming our company and building a new Ford that has a very bright future.
There are two fundamental questions today:
* First, is there a competitive and sustainable future for our domestic automotive industry?
* Second, is the provision of government assistance to help bridge the domestic auto industry through these difficult economic times more favorable to our nation than the costs of inaction?
I believe the answer to both is "yes."
As a relative newcomer to this industry, I have the benefit of seeing the auto business and its transformation clearly. I see parallels with what I witnessed at Boeing after the nine-eleven tragedy and the steps we took to transform commercial airplane business.
I can tell you that the transformation at Ford is even more aggressive, and the progress we are making is remarkable.
Our plan for the past two years has been consistent:
* Aggressively restructure to operate profitably at the current lower demand and the changing model mix
* Accelerate the development of safe, fuel-efficient, high-quality new products that customers want and value
* Finance our plan and improve our balance sheet
* And work together as one team, leveraging our global assets
Our goal is to create a viable Ford Motor Company and a lean global enterprise delivering profitable growth for all.
Few companies have restructured more aggressively. We have taken out excess capacity, closing 17 plants and reducing our work force by 51,000 employees. We negotiated a new contract with the UAW to improve our competitiveness.
We shifted to a balanced product lineup offering high quality, proven safety and good value. We are delivering the best or among the best fuel economy with every new vehicle.
The speed and breadth of our transformation is evident by actions just this week alone:
* Tomorrow at the Los Angeles Auto Show, we will introduce two all-new hybrids. Our new Ford Fusion Hybrid beats the Toyota Camry Hybrid by at least six miles per gallon.
* Today, we are submitting our application for direct loans, authorized by Congress last year, to help us speed advanced technologies and vehicles to market.
* On Friday, we end large SUV production at our Michigan Truck Plant and begin converting to fuel-efficient small car production.
To fund our new products and restructuring, we went to the capital markets early and divested non-core assets.
In addition, our Ford Credit business has consolidated abroad to preserve capital in support of our U.S. consumers and dealers. We appreciate the recently introduced asset-backed commercial paper funding facility, and anxiously await the Administration's term securitization facility.
In the same way, the FDIC's approval of Ford Credit's pending industrial loan bank application will enable us to meet the financial needs of our dealers and our retail customers.
As a result of all of our actions, we were profitable in the first quarter of this year and well on our way to sustainable profitability before the economic and credit crisis hit.
We have taken decisive action to deal with this new reality. We have cut production. We have further reduced employment. We have eliminated raises and bonuses for 2009.
We took these measures while protecting the new vehicles that will secure our future.
Now, we believe we must join our competitors in asking for your support to gain access to an industry bridge loan that will help us navigate through this difficult economic crisis. We suggest the loans be structured in a revolving format, so exposure to the taxpayer would be limited – and, if used, would be repaid with interest.
We at Ford are hopeful that we have enough liquidity. But we also must prepare ourselves for the prospect of further deteriorating economic conditions in 2009.
The domestic auto industry is highly interdependent. A collapse of one of our competitors would not only affect Ford and our transformation plan, but would have a devastating ripple effect across the economy.
I am more convinced than ever that we have the right plan to transform Ford. With your help, we will create a safeguard to deal with the growing economic uncertainty, while all of us at Ford continue to deliver on our plan to create a thriving auto business for the benefit of all of us.
Thank you."
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