The only one of the Big Three U.S. auto manufacturers to avoid government aid during the financial crisis, Ford Motor Co. has since dramatically reduced its debt and prepped for growth. Lewis Booth took over the CFO seat in November 2008, not long after Lehman Brothers filed for bankruptcy and just as the financial crisis was unfolding. Booth, who’s retiring at the end of the month, discusses how the crisis has impacted Ford’s long-term financial strategy and how that involves integrating operations.
We also just amended and extended our revolving credit facilities, moving the expiration date back two years, to Nov. 30, 2015. And lastly, we’re now taking steps to fund the pension scheme, and as it approaches being fully funded, we aim to de-risk it as well. That’s another significant balance-sheet improvement…. This strategy will reduce balance-sheet and cash-flow volatility and improve the risk profile of the company by lowering our liability and asset exposure.
T&R: When might the pension fund be fully funded?
T&R: Did Ford perform those tests before the crisis?
Booth: We did, as demonstrated by the major borrowing we did in 2006. I think the testing is more visible now, and we discuss it regularly with the business operators. This is not something that’s just done by the finance team.