Ford ’s CEO Alan Mulally said that the automaker intends to pay off its private debt in an expedited fashion as the company’s finances continue to improve moving forward. Ford has already paid back $10 billion in private debt this year alone.
Three years ago Ford mortgaged its assets in order to secure a $23.5 billion private loan to finance its turnaround plan. Mulally spearheaded the plan to borrow the money prior to the economy’s collapse in order to provide the cash necessary to revamp its aging product lineup. Mulally said that his goal was to make Ford’s lineup the “freshest in the industry.”
Ford currently holds approximately $27 billion in total debt, and used some of the $1.6 billion raised selling stock this year to begin paying the debt off. Unlike its crosstown rivals, Ford is using private funding generated strictly from company income in order to pay down its debt – GM is using a cash reserve fund given to GM from the U.S. Treasury in order to pay off its TARP loans.
Last month, Jay Ward of Ford communications said, “At Ford we have never said that we have won the battle already. Just that we are making considerable progress against our plan.” Later Ward said, “We are managing our debt and working hard to pay it off. We are also going to pay back our loans unlike other companies.”
Mulally also said while speaking to reporters that he believes Ford’s new vehicles will maintain an advantage over GM and Chrysler next year. Mulally also pointed out that Ford has gained market share while GM and Chrysler were forced into bankruptcy and taking federal aid.
Ford’s stock is currently trading at $9.68 a share – over four times its price earlier this year.
