Ford to restart U.S. truck plants in April to combat pandemic-linked cash squeeze
By Ben Klayman DETROIT (Reuters) - Ford Motor Co announced plans on Thursday to shore up its finances amid the coronavirus pandemic, aiming to generate more cash by resuming production next month of its most profitable vehicles while saving money through further cost cuts. To generate cash, the No.
By Ben Klayman
DETROIT (Reuters) - Ford Motor Co announced plans on Thursday to shore up its finances amid the coronavirus pandemic, aiming to generate more cash by resuming production next month of its most profitable vehicles while saving money through further cost cuts.
To generate cash, the No. 2 U.S. automaker was poised to restart production at some plants in North America as early as April 6, bringing back such profitable vehicles as its top-selling F-150 full-sized pickup, the Transit commercial van and SUVs.
Meanwhile, to further conserve cash - a day after Standard & Poor's downgraded the Dearborn, Michigan-based company's debt to "junk" status and warned more downgrades could be necessary - Ford also announced belt-tightening moves, including temporarily cutting the salaries of top executives.
"The actions we're taking now are wide-ranging and substantial," Chief Executive Jim Hackett told employees in an email early on Thursday. "We hope they will be enough to give Ford the financial flexibility to ride out the economic and business effects of the coronavirus."
The coronavirus pandemic, which has killed more than 21,000 people globally, has forced the shutdown of auto plants around the world.
The outbreak has put pressure on companies, including Ford, which previously drew down credit lines to build its cash position and suspended its dividend.
The U.S. Senate on Wednesday passed a $2 trillion economic rescue package to help unemployed workers and companies, including the auto industry, hit hard by the outbreak.
President Donald Trump, concerned about the economic repercussions of an extended shutdown, has said he wants America to get back to business by Easter, or April 12.
To get more cash coming in, Ford said Thursday it would restart key plants, while introducing additional safety measures to protect returning workers from the coronavirus. It said it would detail the additional measures later.
Ford also took additional moves to conserve cash, announcing its top 300 executives would defer 20% to 50% of salaries for at least five months starting May 1, with the executive chairman deferring his entire salary. Hackett will defer half his salary.
Hackett said Ford's goal was to avoid layoffs during the crisis, but warned that could change if the impact of the outbreak is more severe than anticipated.
Other actions Ford is taking to conserve cash include deferring salary increases more broadly, suspending overtime for salaried employees and freezing hiring in non-critical areas, Hackett said.
However, Ford employees will continue to get healthcare coverage and those exposed to the virus and placed in quarantine will get paid time off, he added.
General Motors Co and Fiat Chrysler Automobiles NV (FCA) previously said they would shut their North American operations through March 30 and then reassess after that.
FCA on Thursday extended its shutdown through April 13, while its parts distribution centers will continue to operate with paid volunteers. Mexico's status is subject to a separate announcement. GM said it doesn't have firm restart dates at this time.
United Auto Workers President Rory Gamble said Thursday the union viewed announcements like Ford's with concern, and any decision to restart production should be based on data and each state's position with regards to the coronavirus outbreak.
"The only guideline in a boardroom should be management asking themselves, 'Would I send my family - my own son or daughter - into that plant and be 100% certain they are safe?'" he said in a statement.
The UAW has said three union members who worked at FCA plants have died due to the coronavirus.
Michigan Governor Gretchen Whitmer issued an order on Monday barring non-essential businesses from operating until April 13.
Japanese automaker Honda Motor Co Ltd on Thursday said it would resume work at its U.S. and Canadian plants on April 7.
Meanwhile, Japan's Toyota Motor Corp said it will extend a shutdown of its North American plants for two weeks, through April 17.
Ford plans to begin production on one shift at its Hermosillo, Mexico, assembly plant, where it builds the Ford Fusion and Lincoln MKZ sedans.
It will restart production on April 14 at its Dearborn plant that builds the F-150 and a Kentucky plant that makes the Super Duty version of the pickup as well as the Ford Expedition and Lincoln Navigator SUVs. Other assembly and parts plants will restart then as well.
Ford shares were up nearly 1% in midday trading.
(Additional reporting by David Shepardson in Washington and Sanjana Shivdas in Bengaluru; Editing by Shinjini Ganguli and Bernadette Baum)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.