Ford unveils new roadmap for survival

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: Changan had introduced some cost-saving practices there that Ford rushed to implement at other facilities around the world.

As part of this effort, executives decided to cut another 10% of the salaried payroll in North America. Benefits, including the bonuses paid to

Mulally and senior executives, are being cut. So is advertising.

Ford was already on track to cut at least $5 billion in annual operating expenses because of its earlier restructuring actions. These new cuts are expected to save another $8-$9 billion. At the same time, Ford is transferring money from its lending arm, Ford Credit, to the parent company and will continue debt-equity swaps to raise additional capital. These actions, combined the possible sale of assets like its stake in Japan’s Mazda Motor Corp, are expected to raise another $6 billion to $8 billion through 2010, when the full benefits of the new UAW contract kick in.

The product plan remains largely intact. In the end, Ford only delayed one new product programme—a European crossover that had not even been announced. It is also postponing plans to offer a diesel version of the F-150, as well as the freshening of a few of its poorer sellers in the US. Because Ford’s plan assumes no help at all from the federal government. Some of these actions could be reversed by a federal bailout. And Mulally said Ford’s approach should make the case for government assistance.

“Whoever is going to invest or loan us money wants to know we’re taking the actions to create a viable company going forward,” he said. “We are absolutely taking the appropriate actions. We’ve demonstrated that we’re making progress.”