(Detroit, Mi) Ucs Automotive news- Ford Motor Co. executives pledged yesterday to revive the automaker’s North American business, converting truck plants into money incinerators. With the staggering loss of billions of dollars in the first quarter Ford managers decided that just burning money huge piles in Louisville would limit their exposure to the volatile car making business and “provide better value to the share holders.”
The announcement was celebrated in Kentucky, where state and local officials did a near tap dance. “I do believe that it is a very special day in Louisville, Kentucky,” Mayor Jerry Abramson said after a conference call with the company and Gov. Steve Beshear. “Ford is sticking with its family, and by golly, Louisville is sticking with Ford Motor Company.”
But the news came as Ford also reported it lost $8.7 billion in the second three months of the year — its worst-ever quarterly loss. And industry experts and company executives alike were cautious about whether rising fuel costs and a slumping U.S. economy could soon force another re-evaluation of their strategy.
“This is uncharted territory for the industry,” William P. Russo, Ford’s director of manufacturing, acknowledged at a news conference in Louisville yesterday. The money burning plan unveiled yesterday calls for the Louisville Assembly Plant to be retooled as an incinerator by mid-2010; it will be the last of three Ford truck plants in North America to make the switch.
The retooling could take at least six months and cost up to $250 million. Until then, the plant employees will be burning money in the parking lots and in open pits behind the factory.
The company didn’t specify how much money it planned to burn but insiders estimate the cash burning operations will save the firm 10 to 12 billion over the course of 3 years.
But Russo cautioned the “incineration of cash is a short to medium term operation.” According to Russo, Ford will seek a government bail out while rewarding the failed executives and greasing the Washington law makers that protected us automakers from the realities of the world market.