Blue Oval Connect Newswire

Blue Oval Connect Newswire: June 7, 2011

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Investor Day
A Note from President and CEO Alan Mulally
Today, we are conducting an "Investor Day" in New York City to share our outlook for the middle of the decade with the investment community. Clearly, our results to date have been strong and our transformation remarkable. Now it is time to share with all our stakeholders where we are going.

Together, we are entering the growth phase of our plan. Importantly, we are explaining today that this next phase does not require a new plan or a shift in focus. In fact, it is by staying laser-focused on our One Ford plan that we expect to serve our customers around the world with a complete family of best-in-class vehicles.

Our fundamental One Ford plan to deliver profitable growth for all remains unchanged:

  • Aggressively restructure to operate profitably at the current demand and changing model mix
  • Accelerate the development of new products that customers want and value
  • Finance the plan and improve the balance sheet
  • Work together effectively as one team, leveraging Ford's global assets

It is important for all of us to read the attached news release and to understand where we are going longer-term. We are confident the significant growth that we are discussing today will be delivered by the same skilled and motivated team who worked together to deliver the wonderful performance of recent years – and that includes all of you!!

One Team. One Plan. One Goal. One Ford.

Thank you!!

Alan Mulally
Alan Mulally
President and CEO
Ford Motor Company

Below is the company's press release regarding Ford Motor Company's Investor Day.

Ford Mid-Decade Outlook Calls for Global Sales Growth, Stronger Margins, Expansion in Asia
Ford Motor Company today said it expects its worldwide sales to increase by approximately 50 percent by mid-decade to about 8 million vehicles a year – with improved operating margins – as the company continues its One Ford plan to accelerate product introductions and expand quickly in growth markets.

In a presentation today to financial analysts led by Ford President and CEO Alan Mulally, the company said it is well positioned to grow profitably. Ford expects industry-wide vehicle sales to rise substantially by mid-decade, with much of Ford's growth opportunity driven by accelerated expansion in the developing markets, recovery in mature markets, and sales of smaller and more fuel-efficient vehicles.

"Ford is a growing company operating in a growing global automotive market," Mulally said. "Through our One Ford plan, we are increasing our product investments to meet this growing demand with a full family of best-in-class products."

By mid-decade, Ford said it expects:

  • Its vehicle sales will increase approximately 50 percent to about 8 million – from 5.3 million in 2010
  • Global Automotive operating margins will increase to 8 to 9 percent from 6.1 percent in 2010, with North America operating margin at mid-decade in the 8 percent to 10 percent range
  • Capital spending will average about $6 billion annually through mid-decade, an increase from $3.9 billion in capital spending in 2010
  • Total Automotive debt will be reduced to about $10 billion, down from $16.6 billion at March 31, 2011 and from $33.6 billion at the end of 2009
  • The company will return to investment grade in the near-term, and resume paying dividends at an appropriate level of after-tax earnings
  • Ford Credit to increase managed receivables to the $110 to $120 billion range by mid-decade, compared with $83 billion at year-end 2010; Ford Credit also expects to achieve an after-tax return on equity in the low double-digit range

Ford's mid-decade outlook is driven by the company's confidence in its product plan and ability to expand into new markets and appeal to a broadening customer base. By 2020, Ford expects about 32 percent of vehicle sales to come from the Asia Pacific Africa region, more than doubling the current percentage of global sales volume Ford achieves in the region.

Globally, small vehicles will increase from representing 48 percent of Ford's sales to about 55 percent of the company's global sales by 2020.

The company also said that by 2014 more than 140 percent of the global product portfolio will be new or significantly refreshed compared with 2009. This will include a continued focus on global vehicles, including one midsize vehicle, one full-size commercial van and one global compact pickup – in addition to the global small vehicles already being sold today. Ford said it has proven it can win with this strategy, having recently introduced the successful global Fiesta, Focus and Transit Connect.

By mid-decade, Ford expects that about 6 million of its global vehicle sales – or about 75 percent of its total volume – will come from vehicles built on five vehicle architectures: B, C, C/D, full-size commercial van and compact pickup platforms.

At the same time, Ford said it will pursue profitable growth opportunities in emerging markets by creating lower-priced versions of global vehicles that offer a $1,000 to $2,000 cost reduction depending on vehicle size and systems. By increasing the localization of global vehicles in certain circumstances, Ford said it will better meet customer needs and win new buyers for its products. In all cases, Ford vehicles will deliver the top standards for quality, fuel efficiency, safety, smart design and value that customers expect.

While Ford's continued product expansion is expected to drive volume and revenue growth, the company also expects its pricing power to continue to be positive as it enhances the overall brand value.

A key factor driving Ford's mid-decade outlook is the expectation for growth of industry volumes. Ford expects industry volumes to grow to the 95 million to 100 million range by mid-decade, compared to 74 million in 2010. Ford expects fuel prices and commodity costs generally will continue to increase as world economies continue to recover.

Ford also announced that it will pay down in the second quarter of 2011 an additional $2.3 billion of the term loans under its secured credit agreement, and that it repaid the remaining $800 million drawn amount of its revolving credit line. Ford ended the first quarter with $16.6 billion of Automotive debt. Going forward, Ford plans to reach an Automotive debt level of $10 billion, while moving from a secured funding base to unsecured funding.

Ford said it expects to achieve investment grade in the near-term, and to resume paying dividends at an appropriate level of after-tax earnings.

"We will continue to focus on maintaining healthy, growing operating margins and creating long-term value," said Lewis Booth, Ford executive vice president and chief financial officer. "Maintaining adequate cash to support and grow the business and reducing our debt are essential steps we are taking to achieve and solidify a world-class balance sheet."


FCN News Team:
Publisher: Sara Tatchio
Associate Publisher: Jenn Corney
Managing Editor: Terra Donnelly

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