SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 10, 2002
(Date of earliest event reported)
FORD MOTOR CREDIT COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-6368 38-1612444
(Commission File Number) (IRS Employer Identification No.)
One American Road, Dearborn, Michigan 48126
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
Item 5. Other Events.
- ----------------------
Ford Motor Company ("Ford") disagrees with the conclusions in a Goldman, Sachs
& Co. report dated September 6, 2002, entitled "Ford's Cash Position May be Less
Robust Than It Appears". The report essentially contends that Ford's Automotive
cash is overstated by as much as $10 billion because of the way Ford's
Automotive sector pays Ford Motor Credit Company subsidies (or subvention
amounts) for low interest rate retail and lease financing programs that Ford
sponsors. The effect of low-rate financing on Ford's Automotive operating cash
balances is less than half of the amount indicated in the Goldman Sachs report
and the effect on cash flow is even smaller. In addition, it is important to
understand the following points:
o Ford's accounting for subsidies to Ford Credit for low-rate
financing programs has been consistent for many years and is described
in Ford's and Ford Credit's 2001 10-K Reports.
o Ford's Automotive sector recognizes a reduction to revenue for
the subvention amount when a vehicle is sold to the dealer or
the marketing programs change (i.e., the amount of subvention on
the vehicle is recognized upfront as a reduction to Automotive
revenue). Ford Credit recognizes interest subvention as revenue over
the life of the contract.
o Ford's Automotive sector pays Ford Credit for the interest
subvention over the life of the contract; the payments are
front-loaded, which is consistent with the terms of the contracts
placed. In other words, the subvention payment flows are similar to
how Ford Credit would receive payments from the customer if the
customer were paying at a market interest rate. Again, this has been
Ford's practice for many years.
o Ford Credit does not presently require a capital contribution. In
fact, Ford expects to receive a dividend from Ford Credit this year.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
FORD MOTOR CREDIT COMPANY
-------------------------
(Registrant)
Date: September 10, 2002 By: /s/ S. P. Thomas
-------------------
S. P. Thomas
Assistant Secretary