June 9, 2009

Independence has advantages, Ford says

Ford Motor Co. Treasurer Neil Schloss says keeping the second-largest U.S. automaker free of government loans has its advantages.

Although GMAC LLC -- the lending firm associated with General Motors Corp. and Chrysler LLC -- has changed its official status to a bank and received $13.5 billion in government loans, there are significant benefits from an operating perspective to being able to have the credit guys and the marketing guys and sales guys working right next to each other, Schloss told The Detroit News Tuesday.

We recognize that we're going to be at a cost disadvantage because of that, Schloss said referring to GMAC's bank status. However, you can always be faster in the market if you don't have people looking over your shoulder who you have to satisfy, he said.

Ford has applied for permission to create a bank that would enable it to borrow money at better rates, but Ford Credit recently raised $2.8 billion in secured and unsecured loans, proving it can still raise cash when it needs to, the newspaper said.