Ford Will Speed Green-Car Launches

CEOs of Ford, GM Will Accept $1 Salaries in U.S. Bailout; UAW Leaders to Meet to Discuss Labor Pacts

By MONICA LANGLEY and JOHN D. STOLL
The Big Three auto makers will submit recovery plans to Congress on Tuesday that emphasize cost-cutting, downsizing and renewed emphasis on higher-mileage cars in a bid to win support for a federal bailout.
Ford Motor Co. Chief Executive Alan Mulally plans to tell Congress he is accelerating his company's development of hybrid and electric vehicles and is willing to cut his salary to $1 a year if Ford uses any federal funds.

Alan Mulally
General Motors Corp. is expected to focus on efforts to lighten the company's heavy debt load and consolidate or sell at least one of its eight automotive brands, most likely Saab, people familiar with the matter said. GM CEO Rick Wagoner also will take a $1 salary, those people said. Chrysler LLC is likely to emphasize its need for cash to stabilize the company and eventually join an alliance with one or more foreign auto makers, a person close to Chrysler said.
Meanwhile, top leaders and consultants for the United Auto Workers union, under pressure to deliver concessions, will meet Wednesday in Detroit to discuss potentially tweaking labor agreements, people familiar with the matter said Monday.
Key UAW leaders, including local union presidents representing GM, Ford and Chrysler, will travel to Detroit for the meetings.
In addition, the union will have outside consultants on hand to help evaluate the union's role in Detroit's attempt to secure a so-called bridge loan from the government. A UAW spokesman couldn't be reached for comment. The meeting was reported by Bloomberg News.

The Big Three are hoping to persuade Congress to provide $25 billion in low-cost loans to help them weather the deep downturn in auto sales. They were rebuffed in their first appeal to Congress in November. Lawmakers expressed skepticism the three could survive even with federal aid and told them to submit plans by Dec. 2 explaining how they would use taxpayer money to "become viable."
In a phone interview Monday, Mr. Mulally said Ford will explain to Congress it is rushing to launch new hybrids and electric vehicles by 2011, including a battery-powered commercial van and compact sedan. A plug-in electric vehicle that can be recharged from a standard electrical outlet should follow in 2012, he said.
In a separate interview, Ford Chairman William Ford Jr. said the company is looking beyond survival to opportunity. "We want to come blasting out as a global, green, high-tech company that's exactly where the country and the Obama administration want us to head," he said. Ford's recovery plan "isn't just about slashing -- we've already done that slashing and burning -- but about building for the future."

Robert Nardelli
Mr. Mulally added that he would work for $1 a year if Ford received any federal loan or other aid, a change from the view he expressed last month. While testifying before Congress, he was asked if he would be willing to cut his annual salary to that amount and responded, "I think I'm OK where I am." He took home $21.67 million in 2007.
In another symbolic move, Mr. Mulally plans to drive a Ford Escape hybrid to Washington, where he and his GM and Chrysler counterparts are set to appear later this week. They were criticized by Congress for flying private jets to the hearings last month. GM's Mr. Wagoner plans to drive a Chevrolet Malibu hybrid to the hearings, while others in his group will travel in a Chevy Cobalt hybrid and a Buick Lucerne that can run on 85% ethanol, said a GM official. Chrysler said CEO Robert Nardelli -- who told Congress last month he would take $1 in salary -- has ruled out flying by private jet this time but didn't say how he would travel.
For both GM and Chrysler, a federal bailout may be all that stands between them and bankruptcy protection. GM has said it could run short of cash by the time President-elect Barack Obama takes office next month; Chrysler said it could face the same trouble as soon as the end of this year. A bankruptcy filing by either could force the other as well as Ford and many of their suppliers to follow suit, and potentially leave the United Auto Workers union permanently crippled.

Richard Wagoner Jr
The future of Mr. Wagoner may also depend on whether Congress agrees to help Detroit. People familiar with the matter said the company's board could consider replacing him if GM doesn't secure a bailout this time. "Everything is in a state of flux right now for this board," a person close to the board said late Monday afternoon.
The Detroit CEOs are expected to appear Thursday before the Senate Banking Committee and Friday before the House Financial Services Committee. If Democratic leaders decide to move forward with assistance, Congress would be called back to Washington.
Ford is in a somewhat better position than GM and Chrysler because it mortgaged nearly every asset it had in 2006 -- including its blue, oval-shaped logo -- and now has a heftier cash cushion than its rivals.
Along with detailing its electric car strategy, Ford will outline its plan to introduce new fuel-efficient, turbocharged gasoline engines across its lineup and plans to bring popular, high-mileage cars from its European operations to the U.S. "Half of the Ford-Lincoln-Mercury lineup will qualify as advanced technology by 2010," justifying government funds under a new energy law, Mr. Mulally said.
On Monday, Ford also announced some downsizing news, saying it would weigh a sale of its Volvo unit.
GM's presentation, meanwhile, will include moves to restructure its balance sheet, including an offer to some bondholders asking them to exchange debt for equity, and possibly salary and bonus cuts for Mr. Wagoner and other top executives, people familiar with the matter said.
GM will also say it is considering consolidating or selling at least one brand, most likely Saab, these people said. GM has also talked with Chinese auto maker Shanghai Automotive Industry Corp., its partner in China, about the sale of at least a portion of Buick, they said.
GM board members spent time Sunday and Monday reviewing and tweaking the plan. "They're definitely stepping up, definitely putting the pressure on [management]," one person familiar with the board's deliberations said Monday. "They know the clock is running out."
In November, Mr. Wagoner told Congress that bankruptcy is not a viable option for GM, saying customers will not buy cars from an auto maker in bankruptcy court. The board as a whole supports this argument. But unlike Mr. Wagoner, they have left the door open to exploring all options as they become needed.
Chrysler, which is a private company controlled by private equity group Cerberus Capital Management LP, is likely to argue before Congress that Chrysler can be a viable company if it gets loans to carry it through the current crisis and wins time to find one or more foreign auto makers willing to form an alliance, people familiar with the matter said. A Chrysler spokeswoman declined to comment.—Mike Spector, Matthew Dolan and Greg Hitt contributed to this article.
Write to Monica Langley at monica.langley@wsj.com and John D. Stoll at john.stoll@wsj.com