Ford Motor Co. (F) faces stronger headwinds than it anticipated when launching a turnaround plan but has ruled out seeking court protection from creditors, its chief executive was quoted as saying in the Wall Street Journal on Thursday.
In an interview with the newspaper Bill Ford dismissed any talk of bankruptcy being a threat, saying "it's not an option."
Standard & Poor's cut its rating on Ford debt deeper into junk territory on Wednesday, lowering it one notch to single-B-plus from double-B-minus and saying "2006 would be a more difficult year for Ford than previously anticipated."
Bill Ford told the paper the company had no interest in taking itself private, despite reports that it has studied doing so amid a falling share price and a flurry of private-equity-backed deals.
Since Ford detailed in January its "Way Forward" restructuring campaign to make North American auto operations profitable again by 2008, industry conditions have got tougher than Ford planned for, the paper quoted him as saying.
He said sales of sport utility vehicles had declined faster than planned for amid higher fuel prices and that prices of metals, plastics and other materials had also risen faster.
"I think we had some fairly conservative assumptions in the Way Forward plan, just because the world never develops like you think it is going to, and the world has gotten tougher," he said.
The paper quoted him as saying the turnaround plan was ahead of schedule when it comes to reducing headcount and that he anticipated 12,000 hourly workers will depart this year, largely through buyouts.
But the consumer exodus from SUVs in favor of smaller cars was occurring at a faster pace than forecast, he said. "If that pace continues, that is tough for us."