Ford supply situation in Japan "unfolding"

Reuters (Detroit) - Managing the supply of parts from Japan following last month's earthquake is a complex and still-evolving process, Ford Motor Co (F.N) Chief Executive Alan Mulally said on Wednesday.

So far, the Japan crisis has had no material impact on Ford's earnings, Mulally told reporters in Detroit.

Potential slowdowns and possible shutdowns to production in Asia this month and next do not change that, he said, repeating a disclosure the automaker made in a securities filing this week.

"The supply chain is very complicated," Mulally said. "On one hand we are finding solution after solution. But also, we're still on a journey of discovery on some of the parts."

Ford and other automakers have had to temporarily idle plants and even restrict the use of some paint colors as they grapple with the shortfall in parts and supplies since the March 11 earthquake in Japan.

"You will see us continue to update everybody, because we are very transparent about what we learn," Mulally said. "But it's still unfolding."

Mulally said Ford will maintain price "discipline" regarding consumer incentives to purchase vehicles from its two brands, Ford and Lincoln. Ford outsold cross-town rival General Motors Co (GM.N) last month in the U.S. market for only the second time since 1998.

"The most important thing about our plan is profitable growth and so that leads us to tremendous discipline on everything about the business," Mulally said. "The No. 1 thing is to match the production capacity to the real demand."

Earlier this year, GM hiked its incentives and gained market share over Ford. In the first quarter of the year, Ford took 16.2 percent of the U.S. market, behind GM at 19.4 percent. Ford's sales in the first quarter were up 16 percent from a year ago and GM's up 25 percent.

Mulally also responded to criticism of the nearly 50 percent jump in his compensation for 2010, saying it was aligned "with the business performance of Ford."

Bob King, president of the United Auto Workers union, has called Mulally's $26.5 million pay package "morally wrong" at a time when some workers on Ford's assembly lines make about $15 per hour.

Mulally, 65, spoke to reporters after he received the 2011 Automotive Executive of the Year Award for his performance as Ford CEO since October 2006. In that time, Mulally has led a turnaround of the iconic automaker without having to accept bailouts from the U.S. government, unlike GM and Chrysler.

Ford's net income last year was $6.6 billion, its highest since 1999. In three years ending in 2008, Ford lost $30 billion.

Last year's winner was Elon Musk, CEO of Tesla Motors Inc (TSLA.O).