Ford Motor Co Chief Executive Alan Mulally said on Wednesday that volatility in global credit markets was a concern in its disposal of British luxury brands Jaguar and Land Rover, but the conditions were not slowing down the sale.
“It absolutely is an issue,” Mulally said at a media dinner at Ford’s Dearborn design center, referring to the tightening of global credit markets.
Mulally said the current U.S. economic conditions were a “headwind” to the automaker’s plan to turn around the company.
The CEO, who will mark his first anniversary at Ford next month, said he is keeping a close watch on consumer confidence as the slow U.S. housing market, tightening of credit and high fuel prices appear to be weighing on U.S. consumers.
“Our business is really dependent on consumer confidence,” Mulally said.
Earlier this month, Ford and larger rival General Motors Corp cut their forecast for U.S. auto sales in 2007, citing weakness in the housing market.
U.S. vehicle sales have been slowing since spring and July sales were particularly weak across the board for automakers.
Ford’s sales have slipped 13 percent so far this year.
The company, which lost $12.6 billion last year, is in the midst of a sweeping restructuring that includes cutting its work force by a third and closing 16 plants in North America.
Mulally said he was encouraged by the progress being made in returning the company back to profits.
The CEO, who was enticed to Ford last September from Boeing with a $39 million pay package, said Ford does not need a global luxury brand to be a viable and successful automaker and the company is focusing on strengthening its core Ford brand.
Ford plans to have more details on the sale of Jaguar and Land Rover by the end of 2007 or early 2008.
“We expect things to happen towards the end of the year, early next year,” said Lewis Booth, Ford’s head of European and luxury operations, who was also present at the dinner.
Booth also said the automaker would complete its strategic review of Swedish brand Volvo in the next two to three months.
In wide-ranging remarks, Mulally said he was “optimistic” Ford could reach a new contract with the United Auto Workers union by the September 14 deadline.
“I am cautiously optimistic we’ll come to an agreement that improves Ford’s competitiveness, and we’ll do it on time,” he said.
Ford’s formally began contract talks with the United Auto Workers union last month to replace the current labor contract that expires on September 1.
Ford is seeking sweeping concessions to bring its labor costs in line with Japanese automakers operating in the United States.