Ford, Motor Co. CEO Alan Mulally, in remarks quoted by Automotive News on Monday, September 8, said he believed that government loans to fund fuel-saving technologies, would prove seminal for the automotive industry.

Ford, said Mulally, would seek such government-backed, low interest loans to develop innovative technologies from lawmakers now favorably disposed to bolster industry efforts to meet vital fuel-efficiency goals.

Speaking a day after the government rescue of mortgage giants Freddie Mac and Fannie Mae, Mulally said he was not describing an automotive industry bail out.

"The only conversation we have now is, what is the right way to finance, and what is the right provision for deciding which companies participate," said Mulally. "We are very positive."

In December 2007 Congress passed an energy bill legislating a 40 percent increase in fuel efficiency standards by 2020, which also included a guarantee of $25 billion in loans to retool plants.

According to Mulally, Ford has the cash to proceed with restructuring and accelerated technological development. Although admitting current conditions were the worst he had seen in 40 years in the business, Mulally said, "We are in very good shape as far as liquidity."

Car sales in the U.S. through August dropped 11 percent on the high cost of gasoline with Ford's sales down 15 percent. In response, the company plans to cuts is second-half output by 50,000 units.