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| Ford CFO's cash initiative proves providential |
| Bloomberg / Mumbai Mar 13, 2009, 00:18 IST |
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One of the first decisions Lewis Booth made after stepping into the job as Ford Motor’s chief financial officer (CFO) in November was tapping a $10.1-billion revolving credit line to preserve the company’s access to cash.
Some Ford executives didn’t want to take on more debt and interest as sales plummeted. Others argued that the company should take the cash before it vanished as the credit markets deteriorated. Booth settled the debate, opting to tap the money.
Executive Chairman Bill Ford cites that move as helping ensure the automaker would not have to accept federal aid to continue operating, as competitors General Motors Corp and Chrysler LLC have done.
“Our plan was, is and is going to be to thread the needle” of not taking federal aid, Ford said in an interview. “Lewis has pushed our company to get out ahead of our issues and not to react.”
Booth, son of a Liverpool car dealer, also drove the largest debt restructuring Ford has undertaken to retire as much as $10.4 billion. He is also helping to lead the effort to sell Volvo, Ford’s lone remaining European luxury car brand.
Prior to becoming CFO, Booth, 60, spent the last 12 years running Ford carmaking operations around the world, starting in South Africa, moving to Asia and finally in Europe. He engineered a turnaround at Mazda in Japan and overhauled Ford’s European car lineup. He also led the sale of European luxury lines Jaguar, Land Rover and Aston Martin.
“He literally knows how the entire Ford world works more than any executive we have in the company,” said Bill Ford, 51.
‘We’re in charge’
Booth sees his job now, as conservator of the cash, as the last line of defense against taking federal aid.
“We want to continue without the sort of government loans that GM and Chrysler have received and applied for,” Booth said in an interview. “The biggest benefit is that we’re in charge of our destiny. We’re running our company.”
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