CHICAGO, Jan. 24 (UPI) -- After losing $5.45 billion last year, Ford Motor Co. is pursuing an aggressive strategy to raise cash while waiting for savings from layoffs and cost-cutting measures to materialize and help world's second-largest automaker to return to the black.
Ford late Thursday was expected to offer $4.5 billion in convertible securities after announcing on Jan. 17 that it would publicly offer $3 billion in trust-preferred securities convertible into Ford common stock at a 20 to 25 percent premium.
Goldman, Sachs & Co., JPMorgan, Morgan Stanley and Salomon Smith Barney are underwriters of the sale of the 30-year notes, the largest securities sale of its kind. Ford, which appeared poised to overtake General Motors as the world's largest automaker just 12 months ago, needs cash to finance development of new cars and trucks.
Ford's worldwide automotive operations lost $1.96 billion in 2001 and the company must keep expensive product development programs on track so it will have a steady stream of new vehicles to compete with General Motors and foreign automakers.
Ford shares traded at $14.44 on the New York Stock Exchange Thursday afternoon -- less than half the 52-week high of $31.42 and the dividend has been cut twice.
The restructuring plan unveiled by Chairman and Chief Executive Officer Bill Ford on Jan. 11 called for $7 billion in capital expenditures as the company struggles to get back to the basics of quality car building.
The automaker said it will eliminate 35,000 jobs -- 21,500 in North America where it has too much capacity -- and close five plants by 2005. The austerity push means fewer consultants and the end of extravagant management perks.
Ford already suspended matching contributions to employee pension funds, dropped bonuses and profit-sharing and is pressing suppliers to find cost-savings.
Chief Operating Officer Nick Scheel told the Detroit News lavish expense account lunches were out in the executive suite in favor of sandwiches. Discretionary travel on Ford's small fleet of corporate jets has been curtailed.
Bill Ford, the great-grandson of company founder Henry Ford, earlier this month reportedly told 200 top executives Ford would be "a consultant-free company" and would not waste money on an army of highly-paid outside consultants to solve its problems.
