Ford "is competitive" despite a hefty debt load and an inability to match the concessions given GM and Chrysler, said CEO Alan Mulally.
Ford Motor Co. is fully competitive with its domestic rivals, and indeed with the rest of the auto industry, the automaker’s CEO Alan Mulally, tells TheDetroitBureau.com, despite its hefty debt load and its inability to win all the concessions it has sought from its U.S. workers.
There’s little doubt Ford is on a roll, industry analysts praising the efforts Mulally has made since joining the company, in 2006, and consumers responding well to the company’s latest product line-up. But those analysts also caution that there’s a downside that some believe could haunt the company.
Ford was the only one of Detroit’s Big Three to forego a federal bailout, last year, and to avoid plunging into bankruptcy like Chrysler and General Motors. “I’m pleased we respected all of our debt-holders and all of our stockholders,” Mulally proclaimed, following his keynote speech marking the opening of this year’s New York International Auto Show.
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But the downside is that Ford couldn’t shed its tens of billions of dollars in debt like its cross-town rivals. And today, that adds up to millions of dollars in interest, alone, that Ford is covering while Chrysler and GM are not. That, said Mulally, is why Ford has been paying down its debt, converting some to equity, last year, and now scheduling another cash payment for its $23 billion “revolver,” the business equivalent, he suggested, of a home equity line.
“We’re going to keep improving the balance sheet,” he explained, in an interview, “but keep the entire revolver in place.”
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