Ford Motor Company (NYSE:F) is helping out some cash-strapped suppliers by paying its bills early.
Ford has created a new early payment program intended to ensure that cash-strapped parts makers have access to cash flow and working capital as they restart production.
Ford restarted most of its U.S. factories on Monday after a two-month shutdown amid the coronavirus pandemic. The shutdown probably cost Ford more than $10 billion, but the automaker has been able to weather the crisis thanks to an ample cash reserve that it set aside for an economic downturn several years ago.
Since its North American factories were idled in mid-March, Ford has added to its cash reserve by drawing down its credit lines and selling new bonds. As of April 24, Ford had about $35 billion in cash.
Now, with plenty of money to ensure its own survival, it's aiming to help companies that supply it with critical parts — but that didn't have deep pockets when factories abruptly shut down in March.
Ford spokesperson Jennifer Flake said that the early payment program is new and still limited, but the company expects it to grow. For now, Ford is working with a few companies that supply key parts to its U.S. factories, she said, but the company plans to expand the program more broadly across its supply base at a later date.
Ford currently expects to post a $5 billion loss for the second quarter.