- Fed to Keep Rates Low Despite Dollar's Fall: Bernanke
- Millions Could Have to Repay Part of Obama's Tax Credit
- Fed's Fisher: Government Debt Could Push Rates Higher
- What Recovery? Many Homeowners Still Underwater
- Gold Is in a 'Bubble' And Will Keep Going Higher: Gartman
- Diamonds: The Next Big Bubble to Burst?
- Slideshow: Madoff's Luxury Boats Go Up for Auction
- Solar Energy Emerges From a Dark Period
- How Much Do You Know About Green?
- Snoop Dogg Talks Biz
- Paulson Funds Report Q3 Performance
- Warren Buffett's Berkshire Portfolio Snapshot Coming Later Today
- 'Blood and Business Don't Mix' — A Family Business Survival Guide
- Mixed Signals Come From Retail Sector as Holidays Draw Near
- Will the S&P 500 Close Above 1100?
- What Were The Northwest Pilots Really Doing?
- Your Jobless Recovery Game Plan
- S&P to Hit 1,175 in the Short Term: Strategist
MOST SHARED
- BlackRock: Central Banks To Be Net Buyers of Gold
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Fed Likely to Keep Rates Low Despite Dollar's Fall: Bernanke
- U.S. May Wind Up Green With Envy
- Millions May Have to Repay Part of Obama Tax Credit
- Underwater Mortgages Could Sink Even Deeper
- Bernanke Offers Something For Everyone
- Gold Is in a 'Bubble' And Will Keep Going Higher: Gartman
- Cisco Ups Tandberg Bid, Claims Over 40% Backing
- Madoff Auction: $4,750 for a Decoy Duck?
Text Size 
Ford CEO Alan Mulally says the bankruptcy of even one of America's auto companies could bring down the entire industry.
 |
Rajesh Nirgude / AP |
"The industry is so interdependent," Mulally told CNBC. "We're nearly 10 percent of the U.S. GDP, and if one of the automobile manufacturers gets into serious trouble, it has tremendous implications for the entire industry."
He stressed the need for government assistance to the carmakers, a need he and other car-company CEOs were to voice before the Senate Banking Committee later in the day. (Click here to see his interview on CNBC)
"As an industry, we're there together to support having in place a mechanism, our bridge loan," he said. "We think we don't need it right now, but if things continue to deteriorate, we can access these bridge loans as part of our transformational plan."
Mulally said that if an auto company were to file for Chapter 11 bankruptcy protection, the situation might quickly move to Chapter 7, or liquidation.
"Going into that kind of a restructuring, where the consumer has great choices, sales would fall off so fast that you could never recover on the cost side and get out of it," he said.
Mulally defended his leadership of the nation's second-largest carmaker, saying Ford [F
Loading...
()
] is moving in the right direction, and recalling the company's return to profitability in the first quarter.
Mulally spoke to CNBC ahead of his testimony before the Senate banking committee Tuesday afternoon where the three Detroit auot CEOs will try to convince lawmakers to provide a bailout. Also, scheduled to be at the hearing are General Motors [GM
Loading...
()
] CEO Rick Wagoner and Chrysler CEO Robert Nardelli as well as United Auto Workers union President Ron Gettelfinger.
The industry has been battered by record high gasoline prices, tightening credit and a weak economy.
Congress is considering wehter to provide funding to the automakers to help the weather the storm. These funds would be in addition to $25 billion authorized by lawmakers early in the year to assist the companies in improving their technology and making more fuel-efficient vehicles.
Ford has attempted to raise cash by other means as well. The company said Tuesday it would sell a 20 percent stake in Japanese automaker Mazda Motor. Ford will raise more than $538 million from the sale and remain Mazda's top shareholder with a stake of more than 13 percent.
Meanwhile to help spur sales, Ford announced employee pricing, zero percent financing and cash incentives on a variety of its vehicles. The deals start Wednesday and run through Jan. 5. Ford will offer zero percent financing for 36 months on top of employee pricing on many of its most fuel-efficient models.
Customers also will have the option of as much as $6,000 in cash back on many of the models instead of the zero-percent financing.
-AP and Reuters contributed to this report.
Print
Email
- Where, what, how.
- CNBC's Jim Goldman asks: Has the sun begun to set on Twitter? Data suggests its best days are over.
- High unemployment is likely to persist for a while—you might need to change how you look for work.
- De Loach Vineyards is selling its pinot noir the old fashioned way, helping to cut energy and transportation costs.
- Why are the Chinese concerned about the progress of U.S. health care legislation?
- If a terrible driver on your morning commute has you feeling like you want to scream, check this out.
Data is a real-time snapshot *Data is delayed at least 15 minutes