Ford Lays Out Turnaround Plan

Confirming this morning's speculation, Ford (F 2.80, +0.25) submitted to Congress a detailed and comprehensive plan to return the flagging auto maker to profitability. To that end, the company indicated it expects to be breakeven or profitable, before taxes, in 2011.

The plan also outlines a request for potential access to a temporary bridge loan.
Ford reiterated in its statement that its transformation plan remains fully in place, anchored by several key priorities.
The first priority is to aggressively restructure operations to promote profitably, which is based on demand and model mix. That leads to Ford's next priority, which is to accelerate development of new products.
Ford's plan calls for an investment of approximately $14 billion in the U.S., relying on advanced technologies and products to improve fuel efficiency during the next seven years. Third, Ford aims to finance this plan and improve its balance sheet. The company also intends to leverage its global assets in order to effectively work as a single team.
In order to provide a sort of backstop, Ford is asking Congress for access to as much as $9 billion in bridge financing. The company reiterated, however, that it hopes to complete its planned transformation without accessing such a loan. If it has to access the loan, CEO Alan Mulally has said he would work for a salary of $1 per year.
Despite global economic conditions, Ford stated it does not anticipate a liquidity crisis in 2009. That is contingent upon the survival of domestic competitors and also upon avoiding a more severe economic downturn.
It is hard to imagine conditions worsening. Ford reported earlier today that November U.S. sales sunk nearly 31%. Total trucks declined 29%, while cars declined 36%.
With sales slumping, Ford plans to produce 430,000 vehicles in the fourth quarter, unchanged from previous announcements. The company also plans to produce 430,000 vehicles in the first quarter of 2009, though. During the first quarter of 2008, the company produced 692,000 vehicles. Lower output reflects Ford's efforts to realign supply with demand.