Ford Says CEO Will Work for $1 to Get Loans

[one...two...tree 2,762]

By TOM KRISHER and KIMBERLY S. JOHNSON, AP Auto Writers

DETROIT – Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when the Detroit Three automakers' CEOs appear before lawmakers this week to request $25 billion in government loans.

Ford CEO Alan Mulally said he'll work for $1 per year if the company has to take any government loan money.

After grilling the CEOs at hearings last month, Congressional leaders demanded plans from the automakers by Tuesday to show that they will survive if they get federal funds. The plan Ford submitted said the company will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.

The company also said it will sell its five corporate aircraft. The CEOs of all three Detroit automakers were harshly criticized during last month's hearings for flying to Washington in separate corporate jets.

Mulally said in an interview with The Associated Press on Tuesday that Ford will give much more detail to Congress than it did previously, and the company will emphasize the steps it has taken to cut its labor costs with the United Auto Workers union.

Mulally said Ford will seek $9 billion as its share of the loan money but may not need to use it. The Dearborn-based company has said it has enough cash to make it through next year without assistance.

As part of the plan submitted to Congress, Ford said it does not anticipate a liquidity crisis in 2009, "barring a bankruptcy by one of its domestic competitors or a more severe economic downturn that would further cripple automotive sales." The loan would provide a safeguard against worsening conditions, the company said.

The company said it will accelerate plans to roll out electric vehicles as part of its plan.

"We are going to do that across our product line," Mulally said in the interview.

The first plug-in vehicle will be a Transit Connect small van for commercial use in 2010 and a car the size of the Ford Focus compact the following year.

Ford also said it will accelerate plans for hybrid gas-electric vehicles.

Mulally said he will encourage automakers and parts suppliers to join forces to develop new battery technologies in the U.S. for future electric cars so the country doesn't rely on foreign batteries.

"We don't want to trade oil for batteries," he said.

Ford's plan calls for an investment of up to $14 billion to improve fuel efficiency over the next seven years. The company said would improve the overall efficiency of its fleet by an average of 14 percent in 2009.

The CEOs of the Detroit Three are scheduled to appear before congressional committees Thursday and Friday. Chrysler LLC and General Motors Corp. have said they are perilously low on cash and need the government loans to survive the recession and the worst auto sales environment in 25 years.

GM and Chrysler were to submit their plans to Congress later in the day. At an appearance in Baltimore on Tuesday morning, Chrysler President and Vice Chairman Jim Press didn't give details of the business plan that Chrysler will present, but said it will tackle product mix, vehicle pricing and quality and fiscal responsibility.

Press said all players, including banks and labor, have agreed to "all the concessions that are necessary."

The CEOs were skewered on their first visit in November, when lawmakers criticized them for high labor costs and products that aren't competitive with foreign automakers.

"I think we learned a lot from that experience," Mulally said in the interview, adding that the CEOs were there last time to discuss the progress of the industry, not a plan for viability.

Ford's new plan is 32 pages long, plus an appendix, and it includes much detail that was lacking during the first visit.

The company says its plan to achieve profitability or break even by 2011 is based on industrywide sales estimates of 12.5 million units in 2009, 14.5 million in 2010 and 15.5 million in 2011. The seasonally adjusted annual sales rate dropped to 10.6 million vehicles in October.

Ford shares rose 25 cents, or 9.8 percent, to $2.80 in midday trading.

Ford's plan said it will reduce its number of dealers by 606 to 3,790 by the end of the year. It will also trim the number of major sourcing suppliers it uses to 750 from 1,600.

Ford reiterated its intention to offload Volvo, by either selling the Swedish automaker or spinning it off into a separate company. Since 2007, Ford has sold its Jaguar, Aston Martin and Land Rover lines. It also sold most of its stake in Mazda.

___

Associated Press Writer Alex Dominguez in Baltimore contributed to this report.

http://autos.yahoo.com/articles/autos_cont...1-to-get-loans/

[Jasman0717 9]

Isn't that a Lee Iacoccoa line

[Chica Yeyé 41]

I am impressed......

NOT.

unless he is planning to divvy it up and pay his workers the rest of his salary.

[Donna A 4]

so did mr. miller of the delphi bankruptsy until the bankruptsy judge awarded him with his back wages. didnt feel it was right for him to only work for a buck a year.

u know these guys have so much money that they probably live off the interest they have. its nothing for them to take a dollar a year wage.

[Amby 490]

I think he's driving a Ford Escape hybrid to DC from Detroit...think that's what they said on the news earlier

[Donna A 4]

gm's ceo is taking a malibu. wonder if they will get slammed for not car pooling.

[Donna A 4]

not related to ford but wanted to add this aticle....

Posted: Tue Dec 02, 2008 12:14 pm Post subject: Live Bait & Ammo #116: Legacy Cost, a Smokescreen for Fr

--------------------------------------------------------------------------------

Live Bait & Ammo #116: Legacy Cost, a Smokescreen for Fraud

The media keeps reporting that GM workers make on average $70 per hour in total compensation, and that Toyota workers only make $45.

The $25 difference is attributed to legacy costs.

Legacy benefits were earned in the past. Tacking compensation earned in the past onto active workers in the present is deceptive bookkeeping.

Since legacy benefits were earned in the past, why are they now charged to workers in the present?

Since GM included the cost of deferred compensation in the price of cars sold in the past, why are they charging customers for that cost again?

Since the compensation was deferred, was any of that money put into a trust fund?

If so, didn’t GM get tax breaks for money deposited in the trust fund?

What happened to the trust fund?

Should the victims of fraud be blamed for destroying the American auto industry?

Management, not labor, is responsible for legacy cost. Management, not labor, is over compensated in comparison to foreign competitors.

“In the fiscal year that ended in March 2007, Toyota’s top 32 executives — a group that included CEO Katsuaki Watanabe — together pulled in $7.8 million in bonuses on top of salaries of $12.1 million. For the comparable period, one single GM exec, CEO Rick Wagoner, raked in $10.2 million.” [www.toomuchonline.org/tmweekly.html]

In 2008 Wagoner got a $5.3 million dollar raise.

Economist David Gordon in his book “Fat and Mean” said, “In the 1980s, by common measures, the proportion of managerial and administrative employment was more than three times as high in the United States as in Germany and Japan.” Gordon points out that in the US we have a higher percentage of supervisors than Germany, Japan, and Sweden combined.

According to Gordon, 20% of the purchase price of every product made in the USA goes to supervisors and monitors, not including secretaries and assistants and bean counters. In other words, when you buy a $20,000 vehicle, $4,000 goes to pay for the burden of supervisors, managers, and executives whose sweatless efforts add no value to the product. Less than 10% of the purchase price can be attributed to assembly line workers.

Perhaps the biggest question is: Why doesn’t Ron Gettelfinger, the President of the UAW, raise these issues?

Why doesn’t he defend the reputation of his members?

Why doesn’t he publicly acknowledge that the legacy cost mantra is a smokescreen for fraud?

Stay Solid, Gregg Shotwell

_________________

[Niels Bohr 72]

Finally,

Their last plea to survive is to increase hybrid vehicles, and plug-ins. Why didn't they think sooner?

[mawilson 2,133]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

[one...two...tree 2,762]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

Actually, they also look at your assets for qualifying. He'd be denied. (Food Stamps that is)

Edited December 3, 2008 by Mister Fancypants

[mawilson 2,133]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

Actually, they also look at your assets for qualifying. He'd be denied. (Food Stamps that is)

What assets? The poor man had to sell his private jet!

[one...two...tree 2,762]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

Actually, they also look at your assets for qualifying. He'd be denied. (Food Stamps that is)

What assets? The poor man had to sell his private jet!

His wristwatch alone is probably worth more than the dollar amount of food stamps he'd get in a single year.

[Amby 490]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

Actually, they also look at your assets for qualifying. He'd be denied. (Food Stamps that is)

What assets? The poor man had to sell his private jet!

His wristwatch alone is probably worth more than the dollar amount of food stamps he'd get in a single year.

On average how much does a person receive in food stamps? Just curious.

[one...two...tree 2,762]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

Actually, they also look at your assets for qualifying. He'd be denied. (Food Stamps that is)

What assets? The poor man had to sell his private jet!

His wristwatch alone is probably worth more than the dollar amount of food stamps he'd get in a single year.

On average how much does a person receive in food stamps? Just curious.

It depends on many factors - income, family size, etc., but never more than a monthly supply of food for a family of that specific size. If this CEO has one child and a spouse, that could be $100 a week. How much is a Rolex?

[Amby 490]

He'll be fine. With a salary of $1, he'll be eligible for food stamps and the Earned Income tax credit for the poor.

Actually, they also look at your assets for qualifying. He'd be denied. (Food Stamps that is)

What assets? The poor man had to sell his private jet!

His wristwatch alone is probably worth more than the dollar amount of food stamps he'd get in a single year.

On average how much does a person receive in food stamps? Just curious.

It depends on many factors - income, family size, etc., but never more than a monthly supply of food for a family of that specific size. If this CEO has one child and a spouse, that could be $100 a week. How much is a Rolex?

Depends on which one you get