Ford seeks insurance should recession worsen: CEO

By David Bailey

DETROIT (Reuters) - Ford has sufficient liquidity to weather current economic conditions, but has sought government aid for insurance against a worsening of the economy, Chief Executive Alan Mulally said on Tuesday.

"Clearly, we are in a recession and if this gets much worse, and the industry declines, and sales decline, than we are asking for a line of credit, so to speak, that we could tap to make it through this recession and continue the transformation of Ford," Mulally told Reuters in an interview.

Ford went to the market in late 2006 to borrow more than $23 billion (15 billion pounds), pledging substantially all of its assets, including the familiar blue oval logo.

The automaker seeks access to up to $9 billion in bridge financing from the government as a backstop should the economy worsen, and hopes to complete its restructuring without tapping the line of credit if possible.

Mulally, who spoke to Reuters via telephone while riding in a Ford Escape Hybrid headed toward Washington for Congressional testimony later this week, said the automaker highlighted more details on product development for the upcoming testimony.

He described the detailed plans as "shared sacrifice" that includes compensation cuts for Ford management and workers.

Ford has had discussions with the United Auto Workers to improve its competitiveness in North America, he said.

"A lot of what we can do on productivity is built into the basic contract, that allows us to continue to make productivity improvements through the life of the contract, but we have not decided with the UAW to technically open up the contract itself," Mulally said.