Ford CEO: rate cut positive

DETROIT (Reuters) - Ford Motor Co Chief Executive Alan Mulally said on Tuesday the Federal Reserve rate cut would have a positive impact, adding he would like to see continuing efforts to support the U.S. economy.

Mulally also said Ford remained in good shape "liquidity wise" and with its long-range restructuring plan and would continue to watch the U.S. economy and consumer confidence and make adjustments as needed.

"I was very pleased, like all of us, that our leadership is really addressing our economy, because it is so important to all of us," Mulally told reporters after a speech at the Automotive News World Congress in Detroit.

"I think that it is going to be a positive, but I also would like to continue dialogue to work all the pieces of the economy," Mulally said of the Fed's three-quarters of a percentage point cut in the federal funds rate to 3.5 percent. "There are a lot of elements that can be worked."

Mulally said Ford had no plans for additional production cuts, but the automaker would continue to restructure its business to match profitable demand for vehicles.

"We are just going to watch it carefully like we have been and then move decisively and not end up building up extra inventory," Mulally said.

Auto industry analysts expect North American auto sales to fall in 2008, after a 2.5 percent decline to 16.15 million vehicles in 2007, the lowest level in a decade. Such declines would put pressure on car makers to add incentives or reduce prices to support demand from consumers.

Ford which reported a third-quarter net loss of $380 million and reports fourth-quarter results on Thursday, has been restructuring its operations in North America to match its decline to a mid-teens market share in recent years.

The company has reported net income of $88 million through the first nine months of 2007, after reporting a $12.6 billion net loss in 2006.

During the session, Mulally said he was "not clairvoyant" and could not predict whether the restructuring would put Ford back into profitability in 2009 as planned; but he reiterated that it was absolutely the right plan.

The company has enough liquidity to do its restructuring and accelerate work on new products, Mulally said.

Mulally said Ford needed about $17 billion for its restructuring and was able to obtain about $23 billion in financing, giving it some cushion against a further downturn.

Mulally also said that Ford was developing a new Taurus, while adding that he was comfortable with sales of the current version. He revived the Taurus name shortly after becoming CEO, renaming the Ford 500 sedan.

Ford shares were down 7 cents at $5.85 Tuesday afternoon on the New York Stock Exchange.

(Reporting by David Bailey; Editing by Brian Moss and Gerald E. McCormick)