Unlike the other two firms comprising the Detroit ‘Big 3’, Ford Motor Company has managed to avoid filing for Chapter 11 in the worst recession to hit the US auto industry in decades. The firm is moving closer to sustainable profitability at much lower volume. Many say that Ford CEO and President Alan Mulally can take considerable credit for that. Big corporate turnarounds aren’t easy, but as he tells Dave Leggett, the important thing is to have a vision and act decisively.
- Mulally on industrial recovery: “We think that there is going to be a slower and longer recovery than we have seen in the past, so we’ve planned for that.”
- On Ford’s position today: “We have taken our production down to real demand, restructured ourselves to get back to profitability, divested the non-core brands to focus on Ford, focus on the full product line and continued to invest in the products that people want and value.”
- On the foresight three years ago to mortgage assets as part of the business plan: “Of course the bankers thought that was a very viable plan and that’s why they loaned us $23.5 billion. At the time, we also had in that plan a cushion in case the world economy slowed down even more.”
- On the importance of cash in the bank: “We are on a very sound financial footing right now. We have sufficient liquidity, we have reduced our cash-burn dramatically. You can just see the amount of money we have in the bank and the cash-burn…”
- On One Ford and integration: “We have these fabulous Fords in Europe and Asia-Pacific, with probably the best geographical split of any company but they were operating very independently – so we pulled all those together.”
- On divesting premium brands: “We love the other brands and they’ll do great for somebody else, but the decision we were taking was to create a viable Ford.”
- On Ford’s supplier relations when he took the job: “I was astonished and disappointed, when I arrived, at the relationship we had with our suppliers.”
- On Ford’s supplier relations now: “I am so proud that three years later we have moved up dramatically and our trajectory is very positive. You can’t move up in their eyes unless you are starting to include them as a partner, starting to share with them the production data, you’re including them up front in the design – all the things that are important to them to let them be successful. They’re very pleased with us.”
- On business turnaround parallels with his Boeing experience: “People say, ‘how did you know to move so decisively?’ and part of the reason is that I had just been through it.”
- On not needing to file for Chapter 11: “It’s one of the biggest advantages that we have…That Ford is different seems to be resonating with everybody.”
- On Ford quality and not chasing sales volume in the US: “The incentives are going down and over the last six months our market share has gone up every month. The incentives are going down because people not only perceive, but they know, that when you buy a Focus or a Fusion or a Taurus or an Escape you are getting the very best vehicle in that class, competitively.”
- Mulally’s ever-changing ride: “I drive a different car every night – either a Ford vehicle or one of our competitors’.”
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THE EDITOR’S Q&A: Ford’s Alan Mulally [full version]
