Ford to face tougher rivals following U.S. rescue

Ford Motor Co. is the healthiest of the Detroit's Big Three auto makers but could face a rough ride facing off with its newest competitor: the U.S. government.

General Motors Corp. and Chrysler LLC are in line to get $62 billion in investments from the Treasury Department.

As a result, the pair are expected to cut their debt and shrink their dealership networks, which will make them leaner competitors once they emerge from bankruptcy-court protection.

And GMAC LLC, the giant lender now serving Chrysler as well as GM, has received billions of dollars in aid and been granted access to low-cost capital from the Federal Reserve.

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.

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