Ford Credit seeks to tap $700 billion package

DETROIT — Ford Motor Co. wants to share in the $700 billion bailout package approved by Congress last month.

CEO Alan Mulally acknowledged that Ford is talking to officials in Washington about whether Ford Motor Credit Co. could be eligible for assistance under the legislation.

"I think that would be a really positive thing," Mulally told Automotive News. "I think it would help the economy and help Ford. Yeah, absolutely."

One roadblock: Only banks qualify outright for assistance, and Ford Credit is not a bank. So Ford is looking into whether an industrial bank charter would give the company more standing, Mulally said.

Ford has applied for an industrial bank charter from Utah, said Brenda Hines, a Ford Credit spokeswoman. Ford applied in 2006 and resubmitted its application in February after a moratorium on industrial bank approvals expired.

An industrial bank, also called an industrial loan corporation, is a financial institution that loans money and can be owned by nonfinancial institutions. Industrial banks are insured by the Federal Deposit Insurance Corp.

Ford intends to pursue the industrial bank charter regardless of whether it helps the company qualify for assistance from the $700 billion pool, Hines said.

The bank would operate as a subsidiary of Ford Credit. Its deposits would come from brokered certificates of deposit, giving it a lower cost of funds, she said. Ford Credit could provide loans for auto dealers and other customers.

Said Hines: "It's part of our longtime strategy of diversifying our funding sources." 

You can reach Amy Wilson at awilson@crain.com

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