S.C. jobs depend on automakers' health
Not much has been written lately in support of America's automakers, but I believe that South Carolina's 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 is made up of much more than just three CEOs, and it stretches far beyond Detroit. If even one automaker was allowed to fail, it could create a ripple effect that would cost jobs in South Carolina and in every state with car dealers, suppliers, retirees and workers who depend on the auto industry to support them and their families. As a dealer, who has been selling and servicing Ford cars and trucks for nearly 40 years right here in Charleston, 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.
Manly Eubank
There's no question that the auto industry has made mistakes in the past and has been slow to adapt to changes, but Ford understands that. Despite our current challenges, the work Ford is doing to transform the company gives me confidence that our best days are still to come.
Two years ago, Ford saw the need to restructure the company to produce the top-quality, safer, more fuel-efficient cars that our customers want. The plan is working — Ford was profitable in the first quarter before the financial crisis that has hurt the industry worldwide.
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 United Auto Workers union that will help offset labor-related expenses and make Ford more competitive. These and other steps have 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 such as 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 has generated $3.7 billion in additional capital to reinvest in the business and allowed them to focus squarely on growing the Ford brand.
The progress Ford has made in the past two years is the reason why it doesn't need a bridge loan from Congress today. In fact, if a continued economic downturn eventually forces them to access the loan, Ford's CEO Alan Mulally will work for $1 a year until the loan is repaid in full to demonstrate Ford's 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 has even created a Web site at TheFordStory.com so visitors can see the full plan for themselves and hold the company accountable for following it.
The last thing Ford wants to do is ask Congress for a loan — even a loan it hopes never to use — but it would be even worse to lose the progress Ford has made over the past two years. That's why Ford supports a bridge loan on behalf of the industry.
Because the fortunes of the 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, which would be repaid with interest to the government, will help ensure that 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 jobs in South Carolina that Ford alone supports.
The auto industry has made mistakes in the past and has been slow to adapt to change in other cases. But recently we have seen the U.S. automakers, with Ford leading the way, begin to make the changes necessary to succeed globally in a more environmentally conscious world. I urge our members of Congress, and the citizens of this great state to support providing the U.S. automakers a temporary bridge loan to help them continue making these changes through the current economic downturn. We must always remember that by helping the U.S. automakers, you might very well be helping your neighbor.
Manly Eubank is chairman of Palmetto Ford, Lincoln and Mercury, and Jaguar and Hyundai dealerships.
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