UPDATE: Ford Asks For $9 Billion Backstop Loan; Aims For ‘11 Profit
(Updates throughout with details on Ford’s letter to Congress, comments from CEO, auto sales information, context and latest share price.)
By Jeff Bennett and Stephen Wisnefski
Of DOW JONES NEWSWIRES
DETROIT -(Dow Jones)- Ford Motor Co. (F), in a sweeping business plan designed to secure access to up to $9 billion in low-interest government loans, said it aims to return to profitability in 2011 as it boosts the production of small cars and introduces more fuel-efficient technologies.
The second-largest U.S.-based auto maker is seeking a credit line from the government as a backstop, according to the plan submitted to the U.S. Senate Banking Committee Tuesday. Ford said it won’t use the loan unless business conditions worsen or a bankruptcy in the automotive sector increased financial pressure on the company.
"For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company," Chief Executive Alan Mulally said in a statement.
Ford shares were up 10% at $2.81 in recent trading, as investors digested the news Ford expects to be break-even or profitable on a pre-tax basis by 2011. Investors showed little reaction to news the company’s November U.S. sales dropped 31% from a year ago.
