Ford Motor Co. is the healthiest of the Detroit’s Big Three auto makers but could face a rough ride

Ford CEO Alan Mulally says his company isn’t at a disadvantage without federal assistance. Above, the executive spoke at a press conference last month announcing plans to convert an SUV factory to a small-car plant.
Meanwhile, Ford, which has lost more than $30 billion since 2006, remains saddled with about $33 billion in debt including its obligations to retirees. Its lending arm isn’t getting government support, and Ford is moving ahead with a bloated dealer base.

“What bankruptcy does for GM and Chrysler is give them some opportunity to change quickly. Ford will have to fight for those same changes,” said Christopher J. Ceraso, an automotive analyst with Credit Suisse.

Ford Chief Executive Alan Mulally said Ford faces no long-term disadvantage because of the bailout of Chrysler and GM and has no plans for government assistance.

“Clearly, we are in a different place because we have taken a lot of that restructuring action,” he said in an interview Thursday. “That’s what some of our competitors are doing now.”

Ford has been restructuring since Mr. Mulally’s arrival almost three years ago, shedding more than 40,000 jobs, closing 17 plants and reducing costs by more than $5 billion. And its global operations are moving forward on the development of new models.

GM and Chrysler’s product-development operations are only now being reshaped.

In the short term, Wall Street analysts and advisers to Ford see challenges for the company.

One of the biggest is in auto loans.

GMAC in January became a bank holding company, making it eligible for bailout funds from the Treasury and low-cost lending programs from the Fed. GMAC has since received $12.5 billion in financial aid from the government.

GMAC on Wednesday began issuing $3.5 billion in three-year debt backed by the federal government. This should cost GMAC about 2.2% a year.

Ford Motor Credit Co., meanwhile, recently priced a five-year bond and is paying 8%.

After getting help from the Treasury, GMAC in the beginning of the year started offering 0% loans on some GM vehicles. Ford Motor Credit finally followed suit last week.

Ford Motor Credit has applied to become an industrial bank, which would help lower borrowing costs as a federally insured lender.

A spokeswoman said it hopes to have to have the classification by year-end.

GM and Chrysler are also expected to emerge from bankruptcy reorganization with considerably less debt than Ford, which would lower their fixed costs.

GM’s debt load is likely to fall postbankruptcy to about $17 billion, plus its obligation for retiree health care, from more than $70 billion.

While Ford has been able to reduce its debt burden with some equity swaps, which analysts expect to continue, the auto maker still is carrying more than $30 billion in long-term debt. Coming payments include $5 billion for Ford Credit due in October and $10 billion due in 2011 on a revolving credit line the auto maker drew from in January.

Another challenge for Ford is its agreement with the United Auto Workers.

The union has reached deals with Ford, GM and Chrysler to cut the amount they have to put into a trust fund to pay for retiree health care.

UAW President Ron Gettelfinger estimated GM is obligated to fund the trust at about 25 cents on the dollar, and Chrysler at 30 cents on the dollar — down from original payments of 60 cents.

It was unclear what Ford is paying but many analysts believe it is higher than GM and Chrysler.

A person familiar with the matter at Ford said the company expects additional concessions from the UAW long before its current contract expires in 2011. Union officials have said they want the auto maker to remain competitive with its domestic rivals.

Lastly, GM and Chrysler are using the bankruptcy process to shed hundreds of small or money-losing dealerships. GM plans to drop 2,600 of its 6,000 dealers and Chrysler 789 of its 3,200.

Ford is unable to match its competitors’ moves because of state laws that favor the dealer franchises.

The auto maker had 3,723 dealers as of March 31 and has been only able to trim the ranks gradually.

Ford executives said the company has cut its number of dealers by 15% since 2005.

Ford says it remains optimistic. The auto maker will increase production of cars and trucks in the third quarter by about 10% from a year earlier and is gearing up a marketing campaign in hopes of grabbing market share from its cross-town rivals.

Goldman Sachs on Friday estimated that Ford would gain about 25% of GM’s market-share losses.

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