Maryland 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 failed, it could create a ripple effect costing jobs in every state at car dealers and suppliers and hurting retirees who depend on the auto industry to support them and their families.
As a dealer who has been selling Ford cars and trucks for 32 years in Baltimore at Bob Davidson Ford Lincoln-Mercury, I am one of those proud to be part of the American auto industry. I am also excited to be part of Ford Motor Company. There’s no question the auto industry made mistakes and was slow to adapt to changes. But despite our current challenges, the work Ford is doing to transform the company gives me confidence that our best days are still to come.
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Two years ago, Ford saw the need to restructure the company to produce the top-quality, safer, more fuel-efficient cars our customers want. The plan is working — Ford was profitable in the first quarter before the financial crisis hit.
This restructuring started in 2006, when Ford began closing excess plants and bringing its inflated workforce in line with demand.
Ford also negotiated a widely-praised new contract with the UAW to help offset labor-related expenses. These and other steps 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, including 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 generated $3.7 billion in additional capital to reinvest in the business.
The progress we’ve made in the past two years is the reason why 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 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 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 Ford wants to do is ask Congress for a loan – even a loan Ford hopes never to use – but it would be even worse to lose the progress we’ve made over 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 which would be repaid with interest to the government — will help ensure 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 five million American jobs supported by the U.S auto industry, including the 127 jobs at Bob Davidson Ford Lincoln-Mercury and the 3,630 total dealership jobs in Maryland.
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 necessary changes through the current economic downturn.
We must always remember that by helping the U.S. automakers, you might very well be helping your family and your neighbor.
Bruce Schindler is dealer principal of Bob Davidson Ford Lincoln-Mercury in Baltimore, Md. and the National Dealer Council Product Committee vice chairman. Reach him at [email protected].
