Ford Plans Supplier Aid to Curb GM, Chrysler Bankruptcy Fallout

April 8 (Bloomberg) -- Ford Motor Co., the only U.S. automaker to forgo federal aid, is lending money to partsmakers as it moves to shield itself from any fallout in potential bankruptcies at General Motors Corp. and Chrysler LLC.

"Where a supplier needs some financial assistance, we'll do so where it makes sense for us," Ford's Americas chief, Mark Fields, said in a Bloomberg Television interview today. A new labor agreement that saves $500 million annually also will act as a buffer, Fields said.

Girding for a competitor's bankruptcy follows through on Chief Executive Officer Alan Mulally's Dec. 5 assertion to Congress that the second-largest U.S. automaker might be dragged into court protection should GM or Chrysler go first and trigger a cascade of supplier failures.

"We share our supply base a lot with not only Chrysler and General Motors, but the other imports," Fields said at the New York International Auto Show. "If there's a significant industry event, we want to make sure that it's not uncontrolled because if it is, it's going to affect our production."

Ford, which lost a record $14.7 billion last year, is attracting buyers concerned about bankruptcy at GM and Chrysler, Fields said.

Adding Market Share

"We're the only manufacturer that's actually grown their retail market share for two quarters in a row," Fields said. "Our dealers are telling us that consumers are coming into their showrooms across the country and saying, 'You know what? We may not have as much confidence in purchasing another brand, and gee, we're glad that Ford is in a different position.'"

President Barack Obama has given GM until June 1 to come up with a viability plan and Chrysler until April 30 to form an alliance with Italy's Fiat SpA, or each will lose the U.S. loans keeping them alive and face bankruptcy.

While Ford hasn't sought support, it is the only U.S. automaker to meet the terms of the U.S. Treasury Department's aid program, which requires companies to slash debt and get labor costs competitive with those of non-U.S. carmakers.

Ford said April 6 it trimmed its debt by $9.9 billion. On March 9, the Dearborn, Michigan-company said it reached a union deal to match Toyota Motor Corp.'s labor costs by 2011.