United States:Ford says bond sale to fund pensions unlikely
Reuters / July 01, 2003
DETROIT - Ford Motor Co. said on Tuesday it was "highly unlikely" it would follow General Motors' lead with a large bond sale to help fund its pension plan.
Speculation that Ford would unleash a deal similar to GM's record $13.2 billion sale of parent company debt last week sent corporate bond yields up in trading Tuesday. GM has said it will use almost all of the proceeds from its deal for its pension and health care plans.
But Ford spokeswoman Marcey Evans said it was "highly unlikely we would do anything similar, because our pension funding status and liquidity position is very different from GM's."
Evans noted that Ford already had contributed $1 billion to its U.S. pension plan this year. The plan had a $7.3 billion deficit at the end of 2002, far smaller than GM's $19.3 billion pension deficit. According to credit rating agency Standard & Poor's, however, Ford had a worldwide unfunded pension liability of $15.6 billion at the end of 2002.
Ford has said it faces no U.S. government requirements for contributing to its pension plans until 2007, and it has $26.6 billion in cash.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....