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Ford Survival Solution Fast Tracks Electric Vehicle Programs

By KBB.com Editors on December 6, 2008 11:16 AM
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Ford Motor Company is the first of the Detroit automakers to file its comprehensive staying-alive business plan with congress, and beyond a host of downsizing and cost-cutting measures, this far-reaching program focuses on a major acceleration in electric vehicle (EV) development. At the center of these enhanced EV efforts, Ford plans to launch a family of new hybrids and electrics starting in 2010 when a battery electric vehicle (BEV) configured as a commercial van will be added to the fleet. One year later, it's due to be joined by a consumer-oriented BEV sedan. These, as well as subsequent Ford BEVs that are set to start rolling out in 2012, will be developed in ways that markedly reduce their production costs and increase their affordability.

Also fundamental to Ford's vision of future survivability is a call for $14 billion in dedicated new investments during the next seven years to further promote advanced technologies and more fuel-efficient vehicles. Ford says it will improve the fuel economy of its fleet an average by 14 percent for 2009 models, 26 percent for 2012 models and 36 percent for 2015 models compared to its 2005 fleet averages. It projects that cumulative fuel savings from advanced technology vehicles will total 16 billion gallons of gasoline from 2005 to 2015. The company claims that by 2010, fully half of the Ford, Lincoln and Mercury light-duty nameplates will qualify as "Advanced Technology Vehicles" under the U.S. Energy Independence and Security Act, a figure that will increase to 75 percent in 2011 and more than 90 percent in 2014. Ford is seeking $5 billion in direct Department of Energy loans by 2011 to support its investment in advanced technologies and products under provisions of that legislation. It's also asking for a credit line of up to $9 billion to handle any short-run contingencies.

According to Ford Motor Company President and CEO Alan Mulally, "Government loans would serve as a critical backstop or safeguard against worsening conditions." Mulally, who is driving to the Washington hearings later this week in a Ford Escape Hybrid and has agreed to slash his own salary to $1, went on to outline what the automaker will sacrifice as part of an accelerated effort to get back to at least breakeven if not actual profitability in 2011. Key elements in that column include further reductions in labor costs, decreasing the number of its dealers, suppliers and production facilities, and the increasingly serious likelihood of selling Volvo, the last remaining member of its former Premier Automotive Group. He also reiterated that bonuses for North American employees and management worldwide would be cancelled for 2009, as will merit increases for all salaried workers in the U.S.

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