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Ford Executives Meet With Treasury Department

Company maintains an emergency loan is not needed. Suppliers remain a worrisome issue.

by on Feb.27, 2009

Ford is trying to put its best face forward.

Ford is trying to put its best face forward.

Despite terrible sales, and a record smashing $14.6 billion loss in 2008, Ford Motor Co. executives continued a campaign to draw a bright line between their current extreme difficulties and those facing General Motors Corp. and Chrysler LLC.

Ford officials did travel to Washington D.C.  to meet with officials from the Obama Administration. Missing from the Ford delegation, however, was Ford chief executive officer Alan Mulally. Both GM CEO Richard Wagoner and Chrysler CEO Robert Nardelli made a point of attending the meetings in Washington D.C.

“The Ford team has ongoing dialogue with all policymakers, and we were pleased with the chance today to discuss the state of the industry,” said Ford spokesman Mike Moran. “Ford is in a different position, and our situation has not changed. We did not and are not seeking emergency financial assistance from the government.”

Survival Hinges on Suppliers

Nevertheless, Ford’s foothold on survival is still precarious. The automaker also said it was keeping on eye on the difficulties of two key suppliers with financial problems that could cripple the company’s production.

Lear Corp. of Southfield, Mi. said in a filing with the Securities Exchange Commission its outside auditors are likely to attach what is called “going concern” opinion. The opinion generally expresses doubt about the target company’s ability to survive, according to accounting experts.

Lear’s SEC filing said that the company was negotiating with creditors for an extension on a key credit facility. Lear had defaulted on the terms of the credit facility at the end of December. “There can be no assurance that an amendment will be reached on acceptable terms,” the company said in its filing.

Another top Ford supplier, Visteon Corp., also is moving closer to bankruptcy, after losing $328 million in the fourth quarter. Visteon also has gone to court to force one of its own sub-contractors, Tyco Corp., to keep supplying components to Visteon.

“With regard to Lear and Visteon, I can offer this comment: Both companies are key suppliers to Ford. We keep in regular contact with them and continue to work with them as appropriate,” said Ford spokesman Todd Nissen.

“We recognize the environment is becoming more difficult for suppliers. We monitor the supply base on a regular basis and develop contingency plans as needed to avoid a disruption in production. We have not seen any production problems so far, and don’t expect any. But given the fragile state of the supply base, we’re keeping a close eye on things,” he said.

Analysts have warned the collapse of either Visteon or Lear would seriously disrupt Ford’s production in North America and force the company to seek aid from the U.S. Government, just like GM and Chrysler.

New Engine Line

Ford also said Friday it was launching production of new 3.5-liter “EcoBoost” engines at a re-tooled plant in Cleveland, Ohio.

“The launch of EcoBoost is the big milestone in Ford’s commitment to deliver affordable fuel-efficient cars and trucks to millions of customers,” said Barb Samardzich, vice president, Global Powertrain Engineering.

The EcoBoost V-6 engine will be used in the 2010 Lincoln MKS, MKT and Ford Flex and Taurus SHO models that will go on sale this summer. By 2013, more than 90% of Ford’s North American lineup will be available with EcoBoost technology.

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