Ford distances itself from bailout proposal

updated 12:54 p.m. ET Dec. 10, 2008

DEARBORN, Mich. - By shunning government loans, Ford Motor Co.'s top executives say they hope to buff up the automaker's image and set it apart from its cash-starved Detroit competitors, General Motors Corp. and Chrysler LLC.

GM and Chrysler are in desperate need of government money and may not last until the end of the year without it. But Ford set up $23.5 billion worth of credit in 2006, and both Chief Executive Alan Mulally and Executive Chairman Bill Ford Jr. told The Associated Press on Tuesday they are confident that the borrowing, coupled with restructuring and new product plans, will get them through the recession without relying on the government.

Ford even said the century-old company that bears his family's name might be able to use the independence from loans to its advantage.

"I think if they see Ford as a company trying to pull itself up by its own bootstraps, and making it on its own and pulling the right levers, I think that could be a positive for us," Ford said.

Mulally said Ford has completed much of the restructuring that Congress is demanding of the other two, slimming down its brands by selling Jaguar, Land Rover and Aston Martin and studying the sale of Sweden's Volvo.

Ford, he said, has cut its factory capacity to match demand, and it anticipates no further cuts will be necessary as long as the U.S. auto market doesn't worsen considerably. The company has announced the closure of 17 factories and eliminated 50,000 jobs since 2005, many through buyout and early retirement offers.

Timeline Road to ruin Click to see the events leading up to the auto industry's crisis.

The interviews came as weary Democratic congressional leaders cleared the final obstacles to a $15 billion bailout of Chrysler and GM. Congressional officials said Wednesday that majority Democrats and the Bush White House finalized a deal that could go to a vote later that day, although stiff opposition lingered among some Republican lawmakers.

Among the requirements in the Democrats' proposed legislation is the appointment of a "car czar" to oversee Chrysler and GM with authority to yank the loans if the companies don't make substantial progress toward restructuring.

Both companies are likely to seek further concessions from the United Auto Workers and their creditors in order to justify the government money and prove themselves viable.

But Mulally said Tuesday he would expect the same concessions from the union even though Ford wouldn't be under government supervision.

"The UAW supports the entire industry. They represent employees at all three companies. I can't imagine being disadvantaged on that," Mulally said. "I would think whatever's done on that we would continue to do together because they support all of us."

Mulally appeared before Congress last week with the CEOs of GM and Chrysler, and said he did so to support the other automakers and to line up a government loan just in case the economy worsened and Ford might needed the money in the future. If one or both of the others go into bankruptcy, it could drag down parts suppliers and force Ford into the same situation, Mulally said.

Mike Moran, Ford's Washington, D.C., spokesman, said Wednesday that drafts of the bailout legislation show Ford would not fall under government supervision unless it actually draws on a federal loan.

Ford wants to set up a $9 billion long-term line of credit from the government but would use it only if the U.S. auto market worsens or fails to recover. The company has said it has enough borrowed money to make it through 2009 without government help.

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