Ford boss 'will work for $1 a year'

The boss of troubled car maker Ford has ditched the private jet to drive to Washington in a hybrid car to lobby Congress for a bailout package and has offered to work for $1 a year under 'cost cutting'.

Ford Motors presented a major reorganisation plan to Congress and said it would break even or restore profitability in 2011 if lawmakers approve a $US9 billion bailout package.
 
The plan comes as the Detroit automakers request a total of $25 billion to avert a collapse of the sector, which could send shockwaves through a fragile economy.

General Motors and Chrysler were to present plans ahead of Congressional hearings scheduled for Thursday and Friday.

Ford said its plan calls for cost savings with unionized workers and an investment of $14 billion over the next seven years to improve fuel efficiency through the development of new technologies and products.

Private jets, bonuses canned

The struggling Detroit giant also said that it would sell its five corporate jets and, if it accesses congressional aid, chief executive Alan Mulally would work for a salary of one dollar a year "as a sign of his confidence in the company's transformation plan and future."

Bonuses for all employees in North America and overseas managers will also be cancelled in 2009.

"Ford is asking for access to up to nine billion dollars in bridge financing, but reiterated that it hopes to complete its transformation without accessing the loan should Congress agree to make the funds available," the number-two automaker said in a statement.

The automaker said that, unlike GM and Chrysler, it does not anticipate it will run out of cash next year but needs access to the loan in case the economy worsens or one of its competitors goes bankrupt.

Ford shares rose on the news.

Volvo sell-off 'on the cards'

Ford said on Monday it was considering a sale of Sweden-based subsidiary Volvo Car.
  
It has already sold the premium brands Aston Martin, Jaguar and Land Rover and said last month it would sell a 20 percent stake in its Japanese partner Mazda for $540 million to raise cash.

Additional savings could come from a reduction in the Ford dealer network.

The company said that by the end of the year it will have 3,790 US dealers, a reduction of 14 percent from the end of 2005.

Ford said it was "presently engaged in discussions" with the United Auto Workers "with the objective to further reduce its cost structure and eliminate the remaining labor cost gap that exists between Ford and the (foreign automaker) transplants."

"We appreciate the valid concerns raised by Congress about the future viability of the industry," Mulally said.

"We hope that our submission today helps instill confidence in Ford's commitment to change, including our accountability and shared sacrifice during this difficult economic period."
   
The automaker also announced plans to accelerate the introduction of gas-electric hybrid and fully electric vehicles, including plans to bring an electric van-type commercial vehicle to market in 2010 and an electric sedan to market in 2011.

Improve fuel economy

It will also improve the fuel economy of its total fleet of vehicles by 36 percent for 2015 models which it says will result in cumulative fuel savings of 16 billion gallons compared with its 2005 vehicles.

The shift towards smaller vehicles will also be accelerated and said its investment in cars and crossover sport utility vehicles will increase from 60 percent of its budget in 2007 to 80 percent of product investment in 2010.

"Ford is committed to building a sustainable future for the benefit of all Americans," Mulally said.

"We believe Ford is on the right path to achieve this vision."

Ford had previously predicted it would return to profitability in 2009 after instigating a massive restructuring plan which included the shuttering of 17 of plants and the elimination of 67,000 of jobs in North America.

It posted a profit in the first quarter of this year but was badly hit by the current economic slowdown and credit crunch which pushed auto sales to lows not seen in 25 years.