Ford Motor Co CEO Alan Mulally says the automaker plans to speed up debt repayment as its financial condition continues to improve.
Mulally also told reporters at a briefing on Friday on its new vehicles that Ford would keep its advantage over Chrysler and General Motors next year. Ford has gained sales and market share while its Detroit competitors were forced to take government aid and go through bankruptcy protection.
Ford has about US$27 billion in debt. Mulally says the company repaid US$10 billion this year and has sold US$1.6 billion worth of stock.
PHOTO: BLOOMBERG
He says the automaker will accelerate payments as it continues to move toward profitability in 2011.
Ford mortgaged all of its assets three years ago to borrow US$23.5 billion. The loans allowed it to avoid bankruptcy and the government aid that GM and Chrysler needed to survive.
“Everybody knows how fast we are getting back to profitability and free cash flow,” Mulally said. “Then we’ll just accelerate the improvements to the balance sheet.”
Last month, Ford reported a third-quarter profit of nearly US$1 billion and said it would be solidly profitable in two years.
Mulally said the borrowing and improved cash position have allowed Ford to revamp its product lineup so it will soon be the freshest in the industry. He made the statements in the Detroit suburb of Wayne, at a former truck factory being retooled to make the new European version of the Focus compact car.
Mulally said Ford would continue to see a competitive advantage over GM and Chrysler because of its solid products and because it avoided government aid and bankruptcy protection.
He also said the economy is starting to show signs of improvement throughout the world, slowly moving out of the recession. Yet Ford has still planned conservatively to have growth going forward, he said.
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