Loans Could Make the Difference

Virginia members of Congress should support providing domestic automakers access to temporary bridge loans -- our economy and millions of jobs could depend on it. The American auto industry consists of much more than just three CEOs, and it stretches far beyond Detroit. If even one automaker was allowed to fail, it could create a ripple effect that would cost jobs in every state with car dealers, suppliers, retirees, and workers who depend on the auto industry to support them and their families.

Richmond Ford was one of the first franchised dealerships in Virginia, and has been selling Ford cars and trucks for more than 80 years. I am one of those proud to be part of the American auto industry. I am also excited to be part of Ford Motor Co. There's no question that the auto industry has made mistakes in the past and has been slow to adapt to changes, but Ford understands that. Despite our current challenges, the work Ford is doing to transform the company gives me confidence that our best days are still to come.

Two years ago, Ford saw the need to restructure the company to produce the top-quality, safer, more fuel-efficient cars that our customers want. The plan is working -- Ford was profitable in the first quarter before the financial crisis that has hurt the industry worldwide, including foreign automakers.

This restructuring started in 2006, when Ford began closing excess plants and bringing its inflated work force in line with demand. Ford also negotiated a widely praised new contract with the UAW that will help offset labor-related expenses and make Ford more competitive. These and other steps have reduced the company's costs by $5 billion.

FORD IS ALSO in a stronger financial position than GM or Chrysler because of several strategic actions such as raising additional debt capital of $23.5 billion in 2006 and selling Aston Martin, Jaguar, Land Rover, part of Mazda, and other non-core businesses. This has generated $3.7 billion in additional capital to reinvest in the business and allowed us to focus squarely on growing the Ford brand we have.

The progress we've made in the past two years is the reason we don't need the bridge loan from Congress today. In fact, if a continued economic downturn eventually forces us to access the loan, our CEO will work for $1 a year until the loan is repaid in full, to demonstrate our intention to avoid using the loan.

We know that's not enough. That's why Ford announced that it would immediately sell its company airplanes and use commercial flights whenever possible. The executive team will forgo any bonuses or merit pay for 2009, and the company is canceling bonuses for all management employees worldwide and for all employees in North America. Ford has even created a Web site at TheFordStory.com so visitors can see the full plan for themselves and hold us accountable for following it.

The last thing we want to do is ask Congress for a loan -- even a loan we hope never to use -- but it would be even worse to lose the progress we've made over the past two years. That's why Ford supports a bridge loan on behalf of the industry. Because the fortunes of our industry are inextricably linked to a network of common suppliers, were GM or Chrysler to fail, the entire industry would face a major disruption, triggering a ripple effect of lost jobs among other automakers, suppliers, dealers, and throughout the entire U.S. economy.

THE CURRENT request to Congress of up to $34 billion in temporary bridge loans -- loans that would be repaid with interest to the government -- will help ensure that U.S. automakers have the resources to survive the current economic crisis while continuing to make the changes they have all admitted are necessary to remain viable. It will help secure the 5 million American jobs supported by the U.S. auto industry, including the 150 employees at Richmond Ford and 5,515 jobs in Virginia that Ford supports.

The auto industry has made mistakes in the past and has been slow to adapt to change in other cases. But recently we have seen the U.S. automakers, with Ford leading the way, begin to make the changes necessary to succeed in a more global and environmentally conscious world.

I urge our members of Congress, and the citizens of this great state, to support providing the U.S. automakers a temporary bridge loan -- which will be paid back with interest -- to help them continue making these changes through the current economic downturn. We must always remember that by helping the U.S. automakers, you might very well be helping your neighbor.
Ron Kody is the president of Richmond Ford Lincoln-Mercury. Contact him at (804) 358-5521 or www.richmondford.com.