TRAVERSE CITY, MI –Co. and Group LLC may have cleaner balance sheets than Motor Co., but the advantages of not having gone through bankruptcy outweigh that disadvantage, says Ford Chief Financial Officer Lewis Booth.
“In the last few months, there is enough data to suggest we’ve improved customer consideration of thebrand because we are in a different position from our competition,” he says.
“We have goodwill in dealer showrooms and from customers who want to buy Fords because we haven’t taken (taxpayer) money.”
How long that will last is the question, Booth says, but notes Ford was able to keep its focus on product-cycle and restructuring efforts, while the other two Detroit auto makers were spending massive efforts on Chapter 11.
Debt is an issue for the CFO, but Ford enjoys a net benefit of not going bankrupt, “without the violent disruption that GM andhad,” he says.
Nevertheless, President Obama handled the GM and Chrysler challenge better than the U.K. did several decades ago with British Leyland, where Booth started his career.
“The thing the U.S. government did that was really brave was being decisive, then saying – and I believe it – that they will get out. That didn’t happen at British Leyland.” After the auto maker was nationalized, others outside the company dictated plans, and “that was a sad end for thousands of people.”
Booth tells the crowd at the Managing Briefing Seminars here Ford has been able to raise its revenues at the same time it is cutting costs, and his “relentless focus on cash” will continue to be the daily job of his successor.
Since its $23.6 billion refinancing in 2006, Ford has been moving to the One Ford principal in which the same platforms will be sold around the world.
The Fiesta now on sale in Europe comes to the U.S. next year as a retrofitted global car, and it will be followed by the Fusion and European Mondeo sharing a platform – the first project born after One Ford, Booth says. The Transit Connect van, which was never sold outside Europe before, now has come to North America.
That will dramatically increase platform volumes, he says, from an average of 345,000 in 2009 to 680,000 in 2014. Yet, from 2005 to 2008, engineering costs have been reduced 60% and tooling costs 40%.
Volume also is key to making electric vehicles and hybrids using lithium-ion battery technology. Although each auto maker will have its own battery supplier for the first projects, Booth says Ford will share battery suppliers in the future with other OEMs.
However, while powertrain development for Ford’s first two upcoming EVs – a Ford-based car and Transit Connect van – will be conducted largely by Smith Electric Vehicles U.S. Corp. andInternational Inc. – “a lot” of intellectual property is in house.
Today, Booth says “you’ve got to have amperes in your veins too.”
The news just keeps getting better for Ford, which this week received $30 million in U.S. Department of Energy grants to develop an electric-drive transaxle.
“Product freshness makes a huge difference in our ability to sell cars,” says Booth, whose job is to husband the finances of the company “to make sure we continue to invest in the future.”
Ford has replaced 45% of its volume in the last two years, and comparing 2012 with 2009 it will replace or refresh 70% to 90% of its volume globally, he says. By 2014, 140-160 vehicles will have been replaced, resulting in a 20% improvement in the age of the auto maker’s global fleet, compared with today.