Alan Mulally - Fixing up Ford

Falc'man · 14-05-2009, 07:53 PM

Anyone calling him/herself a Ford fanatic should be thanking this bloke; below is an in depth article on how the he gets the job done. The best thing for Ford since Henry Ford himself.

Fixing up Ford

If business were politics, Detroit would be the Middle East. So how is an outsider like Alan Mulally finding solutions? And why does he seem to be enjoying himself?

By Alex Taylor III, senior editor
Last Updated: May 12, 2009: 12:40 PM ET

(Fortune Magazine) -- Alan Mulally is in my face - again. In fact, he has barely left it for the past two hours. He has taken me through the thick loose-leaf binder he assembled for my interview and shown me another five binders filled with interviews he did upon taking the CEO job at Ford, along with research material and personal notes.

He has given me his opinion on all the stories I've written about Ford (F, Fortune 500) since he took over and, for good measure, the stories I wrote about Boeing back when he worked there. The man is relentless and demands all my attention. He won't let up until he has turned all my "nos" and "maybes" into "yeses."

Call it the Mulally method: this good-natured but relentless insistence on following what he has determined to be the correct course of action. My immersion is taking place around a conference table in his office on the 12th floor of Ford Motor Co.'s world headquarters in Dearborn, Mich.
0:00 /2:44Ford chief: Plan's working

Mulally is sitting so close, he could be in my lap. The office decoration is sparse, but Mulally likes the 180-degree view; Ford's historic River Rouge complex is visible on the horizon, and he says he can keep an eye on General Motors (GM, Fortune 500) and Chrysler from here too. Not that Mulally has much time for window gazing. He's on a crusade to save Ford Motor.

Now he's showing me the corporate mission statement he wrote and had printed on plastic cards and distributed to employees. And here is the hand-drawn diagram he's created just for me (with my name in a cloudburst!) to explain what it all means. In case I hadn't noticed, Mulally says, "I went to a lot of work for this." Trust me, Alan, I noticed.

All this attention is wearing me out - but not Mulally. In the midst of history's second-worst auto depression, Mulally seems to be ... enjoying himself? This is a man who lives less than three miles from his office, arrives there each morning at 5:15 a.m. for a 12-hour workday, and does so with smile. At 63, he still gets enthusiastic about tackling big jobs. "I've always wanted to do something important, and it had to be in a big organization," says Mulally.

You would think once in a lifetime would be enough for the aeronautical engineer in charge of developing the 777 airliner at Boeing (BA, Fortune 500). But here he is, doing it all over again: "What gets me really excited is a big thing where a lot of talented, smart people are involved," he says. Mulally once asked his mother, now 90, "Why am I this way?" She replied, "You've always been this way."
0:00 /2:56Ford adding production

Mulally's being "this way" has, at least for now, kept Ford ahead of GM and Chrysler in the fight for survival. Unlike its traditional rivals, Mulally's Ford insists it has enough cash to ride out the economic downturn and does not want the government loans that the other two companies have accepted.

Ford's financial independence is largely due to a new operational discipline that Mulally has installed, as well as some timely strategic moves he initiated. So while GM suffered the ignominy of seeing the Treasury Department's auto task force depose chairman and CEO Rick Wagoner, and Chrysler has declared bankruptcy, Ford stands alone as an independent company and, potentially, a Detroit survivor. "Alan was the right choice [to be CEO], and it gets more right every day," says executive chairman Bill Ford, the man who hired him.

Ford Motor is still losing money, like nearly every other automaker, but it shows signs of recovery. In the U.S. its market share of retail sales to individuals (as opposed to wholesale sales to fleet customers) has gone up in six of the past seven months. It has negotiated four new agreements with the United Auto Workers, bringing its hourly labor cost down from $76 an hour to $55 an hour and, Ford says, promising to make it competitive with Toyota (TM). While GM and Chrysler are hoarding cash, Ford actually laid out $2.4 billion in March to pay down $10.1 billion in long-term debt. Its share price has increased nearly fivefold since hitting a low in November.
'Pretty relentless'

Mulally, who was hired as CEO in September 2006, hasn't engineered, designed, or built any cars. But he has devised a plan that identifies specific goals for the company, created a process that moves it toward those goals, and installed a system to make sure it gets there. Mulally watches all this with intensity - and demands weekly, sometimes daily, updates. "Alan's style is pretty relentless," says chief financial officer Lewis Booth, a 31-year Ford veteran. "He says, 'If this is the reality, what are we going to do about it?' not 'We're going to work our way through it.'"

The Mulally method has pointed Ford to some smart strategic moves. Sensing a recession in 2006, Mulally decided to borrow $23.6 billion against Ford's assets. Piling on more debt wasn't an easy call, but the extra cash meant that Ford could say no to government loans when sales fell apart last year. Mulally is moving to integrate the company globally, despite several failed attempts in the past. In 2010, Ford will be selling small cars in the U.S. that were developed in Europe. Mulally persuaded Bill Ford to dispose of Jaguar and Land Rover and focus its resources on the Ford brand, and by moving quickly he managed to sell them to India's Tata in 2007 when there was still a market for makers of luxury vehicles. He took longer to untangle Volvo from the rest of the company, but he has now put that up for sale too.

Those moves have helped Ford separate from GM and Chrysler, and Mulally is pumped. "As we come through this, we're going to be a turbo machine on the other side," he says. He has promised that Ford's core North American operations, as well as the entire company, will turn profitable by 2011. It had better, because it can't keep losing money indefinitely. Ford recorded a loss of $14.7 billion last year and another $1.4 billion in 2009's first quarter. If the U.S. and the rest of the global economy continue to slump, Ford's survival could be endangered. "The test of Ford's liquidity will be how low vehicle sales go this year, when they recover, and what levels they recover to in 2010 and 2011," writes analyst Shelly Lombard of Gimme Credit.

Besides, Ford hasn't always handled prosperity well. It boomed in the mid-1980s on the strength of the Taurus, pickup trucks, and Lincolns, only to be laid low by the recession of 1990-91. Then it squeezed record profits out of Expeditions, Lincoln Navigators, and pickups - all built on the same platform - in the middle to late 1990s. But a binge of overseas acquisitions, combined with laxity in operations, brought it limping into the 21st century. When Mulally arrived in September 2006, Ford was known mainly for its pickup trucks and the Mustang, and the company was on the verge of collapse. It lost $12.6 billion in 2006 and another $2.7 billion in 2007.

Now, if the economy recovers on schedule, Ford is in a position to thrive. To meet stricter government fuel-economy standards, it is introducing a line of more efficient, smaller-displacement engines with turbocharging, and it will start rolling out electric vehicles in 2010. A healthier Ford will be able to scoop up business from GM and Chrysler as those companies shed brands and models. Goldman Sachs's Patrick Archambault sees Ford picking up 25% of the sales the two companies lose, equivalent to 1.35 points of market share.

So how does an industry outsider like Mulally come into a company as large as Ford - with its 205,000 employees, multiple product lines, and international operations - and straighten it out?

To people like me who follow the industry and find its inner workings infinitely complex, the success of a non-auto person is surprising and, frankly, a little discomfiting. Mulally, after all, was so removed from Detroit ways when Ford hired him that his personal car was a Lexus.

Although there are similarities between building airplanes and making cars - heavy R&D, complex manufacturing, supplier relations, a unionized workforce - there are crucial differences too. Mulally had no experience in mass marketing or dealer relations. Although he has weighed in on model names, brand streamlining (he is allowing Mercury to wither away), and product complexity (he was flabbergasted to hear that engineers had created 132 different center consoles for the Navigator), he leaves product decisions to the professionals.

The story of how Mulally revived Ford's best-known sedan is a quintessential demonstration of the Mulally method - analyzing a situation using accepted facts and then winning over support through persistence. Here's the story, told by Mulally:

"I arrive here, and the first day I say, 'Let's go look at the product lineup.' And they lay it out, and I said, 'Where's the Taurus?' They said, 'Well, we killed it.' I said, 'What do you mean, you killed it?' 'Well, we made a couple that looked like a football. They didn't sell very well, so we stopped it.' 'You stopped the Taurus?' I said. 'How many billions of dollars does it cost to build brand loyalty around a name?' 'Well, we thought it was so damaged that we named it the Five Hundred.' I said, 'Well, you've got until tomorrow to find a vehicle to put the Taurus name on because that's why I'm here. Then you have two years to make the coolest vehicle that you can possibly make.'?" The 2010 Taurus is arriving on the market this spring, and while it is not as startling as the original 1986 Taurus, it is still pretty cool.
A new corporate culture

It's difficult to imagine the reaction of hard-bitten Ford executives to Mulally's arrival. Sharp elbows, fierce loyalties, and frequent turf battles were hallmarks of Ford's management culture: The tough guys won. Despite nearly 40 years in the commercial airplane business - one of the most international of industries - Mulally looks as if he had just left his home state of Kansas. He dresses like a Boy Scout leader - blue blazer, button-down shirt, kiltie loafers - and his open-mouth smile makes him appear bemused or even a bit puzzled by what goes on around him. That corn-fed sincerity, however, masks confidence, discipline, and a fierce desire to win.

"Communicate, communicate, communicate," Mulally explained in one of his notes to me. "Everyone has to know the plan, its status, and areas that need special attention." For instance, Mulally is determined that Ford reduce its dependence on light trucks as gas becomes more expensive, and he has let the entire organization know it in the bluntest possible language. "Everybody says you can't make money off small cars," he says. "Well, you'd better damn well figure out how to make money, because that's where the world is going."

Mulally's openness seems to have won him support throughout the organization. Says manufacturing boss Joe Hinrichs: "Alan brings infectious energy. This is a person people want to follow." Sometimes Mulally verges on guilelessness. In preparation for our interview, he provided me with a one-page summary of his managerial abilities. Titled "Alan's Leadership," it includes some boilerplate - "proven successful leader ... business acumen and judgment ... steady ... true North" - but leavens it with less quantifiable traits: "expects the very best of himself and others, seeks to understand rather than to be understood." I can't imagine another CEO making such a list public. Bill Ford sums Mulally up this way: "Alan is not a very complicated person. He is very driven."

Arriving at Ford, Mulally boned up on the company like a student cramming for an exam, interviewing dozens of employees, analysts, and consultants, and filling those five binders with his typed notes. The research allowed him to develop a point of view about the auto business that now frames all his decisions. Its pillars draw heavily from his experience at Boeing: Focus on the Ford brand ("nobody buys a house of brands"); compete in every market segment with carefully defined products (small, medium, and large; cars, utilities, and trucks); market fewer nameplates (40 worldwide by 2013, down from 97 worldwide in 2006); and become best in class in quality, fuel efficiency, safety, and value.

Are corporate mission statements so 1990s? Not to Mulally. To let everyone know what he had in mind, Mulally created those plastic cards with four goals on one side ("Expected Behaviors") and a revised definition of the company ("One Ford") on the other. To Mulally, it is like sacred text: "This is me. I wrote it. It's what I believe in. You can't make this up."

"I am here to save an American and global icon," Mulally declares. He drives performance the way he did at Boeing, with the Business Plan Review, a meeting with his direct reports, held early every Thursday. "I live for Thursday morning at 8 a.m.," he says. First up are Ford's four profit centers: the Americas, Europe, Asia Pacific, and Ford Credit. Then come presentations from 12 functional areas (from product development and manufacturing to human resources and government relations).

"When I arrived there were six or seven people reporting to Bill Ford, and the IT person wasn't there, the human resources person wasn't there," says Mulally. "So I moved up and included every functional discipline on my team because everybody in this place had to be involved and had to know everything."

The Thursday meetings are held in what's known as the Thunderbird Room, one floor below Mulally's office, around a circular dark-wood table fitted with three pairs of videoscreens in the center. Eight clocks, one for each Ford time zone, are mounted on the wall. There are seats for 18 executives around the table, with additional ones on the perimeter ("Here's where I sit," says Mulally, indicating a chair: "Pilot's seat").

There are no pre-meetings or briefing books. "They don't bring their big books anymore because I'm not going to grind them with as many questions as I can to humiliate them," Mulally says. "We'll see them next week. We don't take action - I'm going to see you next week." No BlackBerrys are allowed, and no side conversations either - Mulally is insistent about that. "If somebody starts to talk or they don't respect each other, the meeting just stops. They know I've removed vice presidents because they couldn't stop talking because they thought they were so damn important."

Mulally instituted color coding for reports: green for good, yellow for caution, red for problems. Managers coded their operations green at the first couple of meetings to show how well they were doing, but Mulally called them on it. "You guys, you know we lost a few billion dollars last year," he told the group. "Is there anything that's not going well?" After that the process loosened up. Americas boss Mark Fields went first. He admitted that the Ford Edge, due to arrive at dealers, had some technical problems with the rear lift gate and wasn't ready for the start of production. "The whole place was deathly silent," says Mulally. "Then I clapped, and I said, 'Mark, I really appreciate that clear visibility.' And the next week the entire set of charts were all rainbows."

"If something is off-track, we are much better at identifying it and resolving it," says CFO Booth. "Not everything turns to green. If it doesn't, we have to modify the plan."

To monitor operations during the week, Mulally can visit two adjacent rooms whose walls are lined with 280 performance charts, arranged by area of responsibility, with a big picture of the executive in charge in case there are any doubts. Everyone at the Thursday meeting gets wall space. Mulally spends 30 minutes explaining the charts to me, making sure I stand 20 feet away so that I can't see any of the data. The message, though, comes through clearly: Mulally has his finger on every piece of this large and complex company. So does his board of directors; they see a subset of the same data. There are no secrets at Ford anymore. "This is a huge enterprise, and the magic is, everybody knows the plan," says Mulally.

And everyone seems to be onboard. Chief financial officer Don Leclair became a company hero for arranging the $23.6 billion loan in 2006. But other executives found him hard to work with, and Leclair decided to retire. Mulally doesn't want to have to settle arguments between executives, either. "They can either work together or they can come see me," he says. He demonstrates how infrequently that happens by springing up from his chair, dashing into his outer office, and then racing back and sitting down. He reports that nobody is waiting to see him. "They're not here. There's nobody here. There's nobody outside. So they must be working together." I am speechless, but I get the point.
Will it work?

So far, Mulally has been mostly managing the hand dealt him when he arrived. The first new model to bear his fingerprints will be the restyled 2010 Taurus that goes on sale in June. His plan for "One Ford" won't get a real test until next year when two small, fuel-efficient cars, the Fiesta and the Focus, make their way from Europe to the U.S. It remains an open question whether Americans will be willing to pay more for the smaller, higher-content vehicles. They will have to if Mulally is to succeed in reducing Ford's dependence on pickup truck profits.

The biggest unanswered questions about Mulally are how long he will stay at Ford and who will succeed him. Bill Ford has been saying that he hopes Mulally never leaves, but having spent nearly four decades in Seattle, he isn't likely to settle in Dearborn, and in fact, the company spent $344,109 in 2008 flying Mulally and his family between the two cities and elsewhere. Now that Ford is running more smoothly, there shouldn't be a need to look outside again for his successor. If Mulally leaves when he turns 65, the betting is that he will be succeeded by Booth, who is 60. If Mulally stays longer, then 48-year-old Fields would likely be the choice.

Mulally talks as if he has found a home and is doing the work he was always intended to do. "Something about just being mature, being almost 64, is that I've been there. I've been through a lot of cycles. I'm not up and down. I'm rock-solid, no matter where the bad news comes from. I'm steady. And everybody knows why I'm here. It's not a career move. I'm not trying to get ahead. I am not looking for more awards."

At one of his early meetings with employees upon joining Ford in 2006, Mulally was asked whether Ford would be able to remain in business: "Was Ford going to make it?" "I don't know," Mulally replied. "But we have a plan, and the plan says we are going to make it." It was a moment Mulally's mother would have appreciated. To top of page
First Published: May 11, 2009: 3:50 AM ET

Link

R-Design · 14-05-2009, 09:00 PM

Brilliant, lets hope we're reading a similar article on Marin Burela in two years time.

GK · 14-05-2009, 09:08 PM

Quote:

Originally Posted by Boss315

Brilliant, lets hope we're reading a similar article on Marin Burela in two years time.

Let's hope that these two blokes become the best of mates!

Awesome article.

GK

Wretched · 14-05-2009, 09:14 PM

Nice read, let's hope he is successful, that Ford can sell a diverse range within the NA region, not just trucks and Mustangs.

mik · 14-05-2009, 09:17 PM

i don`t know much about corporate workings , but it looks to me like this bloke deserve`s every cent they are paying him imo.....well done mr Mulally.

Scott · 14-05-2009, 09:22 PM

Some people just have "it".

ILLaViTaR · 14-05-2009, 10:09 PM

Quote:

Originally Posted by mik

i don`t know much about corporate workings , but it looks to me like this bloke deserve`s every cent they are paying him imo.....well done mr Mulally.

Even if he wasn't Superman it doesn't mean he deserves every cent.

vztrt · 15-05-2009, 01:46 AM

The fact that he use to be an engineer gives me confidence in the man.

Ohio XB · 15-05-2009, 05:49 AM

He started as an Engineer at Boeing and worked his way up to CEO.

I was thinking about posting this but I already write enough long posts so I was waiting to see if someone else would stumble across it and take the heat.

This is why I am so optimistic about Ford. I have seen and worked with the results of what Mulally has been doing here. Nobody in Ford would have been this successful at making these changes because of the "culture" here. It takes someone from the outside to come in and shake things up and say "This sh-t's gonna stop."

I believe he is one of the very few leaders left in this country. Look into Lee Iacocca's "Where Have All the Leaders Gone?" book to see what I am talking about. I've got it on CD, read by Lee himself.

Steve

**Bundy** · 15-05-2009, 07:15 AM

Its always a bit of a gamble taking on someone from "outside", how many CEO's have we seen lately stuff a business, get a fat cheque and leave...to have an outsider look at your business and take the hard and correct approaches to enusre stability and viability especailly in this current climate, all with an a new level of transparency and problem ownership is really is a breath of fresh air, KUDOS to the man that saves Ford!!

Also interesting to note its the move to Focus and Festiva, being America is such a large place and the American view of large comfortable vehicles to transit those distances...it'd never work....hang on seems to be working here.

Swordsman88 · 15-05-2009, 08:06 AM

Quote:

Originally Posted by bundy

Also interesting to note its the move to Focus and Festiva,

FIESTA!!!!! Sorry had to point that out (because someone else will soon enough). Sorry bundy just having some fun, no malice intended honest.

Moving on....the points you have made are valid i believe. Its never easy to not only bring someone from the outside into the organisation, but to then co-oprate and not resist the changes is important too. It seems that people within ford have realised much earlier on than GM/Chrysler that the situatoin was very serious....that the whole show could go down if action wasn't taken and major changes made. I think its the entire management (and really the entire company) that recognised that desperate times call for wholesale change of how Ford does business. They have/are doing this and it looks increasingly likely it is will work.

LeadFoot81 · 15-05-2009, 09:19 AM

Truly inspirational!

imugli · 15-05-2009, 12:50 PM

Quote:

Originally Posted by LeadFoot81

Truly inspirational!

Agreed.

BA GT-HO · 15-05-2009, 01:22 PM

Reading that makes Mulally sound like a good leader who is full of energy and actually wants to make a difference.

He does remind me of Hank Scorpio a bit from the sounds of that article!

redauxr8 · 15-05-2009, 01:34 PM

Isn't he the one who says the future of the falcon is FWD?

Road_Warrior · 15-05-2009, 01:48 PM

Quote:

Originally Posted by redauxr8

Isn't he the one who says the future of the falcon is FWD?

No, he said that it hasnt been considered properly yet (Falcon's future) but they've got some "pretty darn good" FWD cars out there.

tommyd · 15-05-2009, 02:59 PM

As a Ford employee that's seen a number of CEOs, both globally and locally, in charge of the company, I can tell you all that Alan Mulally is the best thing that ever could've happened. He has managed to effect culture change on almost every level, exceedingly difficult in such a large corporation. The benefit of him being an outsider was instantly recognised by him being able to cut through all the layers of bullsh!t stopping the company from succeeding and imlpementing a great plan to get us back on track. Whenever I get asked about the future of Ford I always respond that it looks bright because we've got a great captain guiding the way.

Let's not forget that as well as being a great leader, he's also actually a great bloke. I met him at the Proving Ground a year or so ago and he's a genuinely nice guy.

phillyc · 15-05-2009, 03:35 PM

Quote:

Mulally instituted color coding for reports: green for good, yellow for caution, red for problems. Managers coded their operations green at the first couple of meetings to show how well they were doing, but Mulally called them on it. "You guys, you know we lost a few billion dollars last year," he told the group. "Is there anything that's not going well?" After that the process loosened up. Americas boss Mark Fields went first. He admitted that the Ford Edge, due to arrive at dealers, had some technical problems with the rear lift gate and wasn't ready for the start of production. "The whole place was deathly silent," says Mulally. "Then I clapped, and I said, 'Mark, I really appreciate that clear visibility.' And the next week the entire set of charts were all rainbows."

To me, that was very important. Because ignoring the problem doesn't make them go away. No wonder the quality amd calibre of vehicles is continuing to lift.

I've been a fan of his since not long after his appointment. He seemed to be making positive changes at Ford. I was even more a fan when he loved the FG G6ET so much he got some taken back to Detroit!

I didn't think that the Jaguar/LR sell off was a good idea. I've been proven wrong on that one with Tata (buyer of JLR) now asking for 600M pounds sterling!

As Mullaly correctly states, Ford will be in a great positioin when the economy turns for the better!

Great work!

phillyc · 15-05-2009, 03:42 PM

Quote:

Originally Posted by GK

Let's hope that these two blokes become the best of mates!

Awesome article.

GK

The best of 'long distance' buddies! Don't want Burela leaving Australia anytime soon.

ZA-289 · 15-05-2009, 05:28 PM

That was the most I've read in a long time

The fact that he is an engineer scares me! have you seen an engineer try to do anything? That said, he obviously has his finger on the pulse of FoMoCo and seems to be doing a great job.

XR8putts · 15-05-2009, 05:31 PM

Quote:

Originally Posted by BA GT-HO

:

He's nothing like Hank, Alan Mulally would never hire Homer!

GK · 15-05-2009, 08:29 PM

Quote:

Originally Posted by phillyc

The best of 'long distance' buddies! Don't want Burela leaving Australia anytime soon.

True.

GK

CAMS290 · 15-05-2009, 09:26 PM

A very smart man....he has obviously had to keep a cool head when he was at Boeing, with Airbus breathing down their neck.

Ford seem to be in good hands.

4Vman · 15-05-2009, 09:28 PM

Quote:

Originally Posted by Ohio XB

He started as an Engineer at Boeing and worked his way up to CEO.

I was thinking about posting this but I already write enough long posts so I was waiting to see if someone else would stumble across it and take the heat.

This is why I am so optimistic about Ford. I have seen and worked with the results of what Mulally has been doing here. Nobody in Ford would have been this successful at making these changes because of the "culture" here. It takes someone from the outside to come in and shake things up and say "This sh-t's gonna stop."

I believe he is one of the very few leaders left in this country. Look into Lee Iacocca's "Where Have All the Leaders Gone?" book to see what I am talking about. I've got it on CD, read by Lee himself.

Steve

I wonder where Wally is with his anti Ford/Pro GM rhetoric and propaganda counter argument?

Falc'man · 17-05-2009, 11:46 PM

http://www.quote.com/news/story.action?id=KRO136e4474

Ford on the road to profit in '11, CEO Mulally says
Saturday May 16, 2009 02:14:58 EDT
May 16, 2009 (The Dallas Morning News - McClatchy-Tribune Information Services via COMTEX News Network) --

At a time when bankrupt Chrysler LLC and struggling General Motors Corp. are closing dealerships and plants, Ford Motor Co. plans to be profitable again in 2011.

"Ford is in a very different place right now," said CEO Alan Mulally, who was in the area on Friday to attend the grand opening of Randall Reed's Prestige Ford and Lincoln Mercury in Garland.

Ford, of course, has felt the pain of the recession just as other automakers have. The company lost a record $14.7 billion last year and another $1.4 billion in the first quarter of this year.

But Mulally, who came to Ford in 2006 from Boeing, where he oversaw the development of the 777 airliner and other projects, made a controversial decision shortly after he arrived to mortgage most of Ford's assets so the company could borrow $23.6 billion.

The funds allowed Ford to operate through the recession without government assistance, and, more important, Mulally said, to continue developing vehicles. Some, such as the new Ford Taurus sedan and Lincoln MKT crossover, begin arriving at dealerships this year.

"We affectionately called that money our home-improvement loan," said Mulally, who didn't much resemble an automaker CEO in his red sweater vest, crisp white long-sleeve shirt and tan slacks.

Ford is already working to retire its considerable debt, he said.

"As we start to generate cash, we will be able to pay off those loans quickly," said Mulally, a youthful 63-year-old Kansas native who's featured in a cover story in this month's Fortune magazine. "We are absolutely not postponing the pain."

Ford has managed to separate itself from GM and Chrysler in perception, industry observers say, and that should serve the company well once the car market regains its health.

"I think Alan has been there long enough that you are seeing the results," said Jeremy Anwyl, chief executive officer of Edmunds.com. "Most of these car companies have good designers. You just have to have someone who will cut them loose."

"The direction they are moving is lifting the entire Ford group up," said Jeff Schuster, executive director of forecasting at J.D. Power and Associates. "They have put good design back into their vehicles."

Mulally, who at one point in the interview leaped up to go hug a 94-year-old woman who had just bought a Focus, said he decided to attend the Prestige grand opening because the dealership chose to invest millions in its facilities in a terrible economy to prepare for better times. That is essentially what Ford is doing, said Mulally, who drives a different car home every night, including a Honda Fit recently.(A very wise 6th century B.C. Chinese General named Sun Tzu, once stated in a treatise titled The Art Of War, that if "you know your enemy & know yourself, in 100 battles you will never be in peril")

"If all you do is worry about slashing and cutting, this job is not much fun," he said.

Tuddy200 · 18-05-2009, 09:45 AM

Close to $15 billion last year with only $2 billion first quarter this year, times by four thats $8 billion, leaving the buffer $7 billion.

We all know there will be no profit this year, or next, however, we can clearly see the loss margin getting smaller and smaller by the years. I don't recall the figures but GM's looked a hell of a lot worse then that!

ltd · 18-05-2009, 09:45 AM

Quote:

Originally Posted by Ohio XB

He started as an Engineer at Boeing and worked his way up to CEO.

I was thinking about posting this but I already write enough long posts so I was waiting to see if someone else would stumble across it and take the heat.

This is why I am so optimistic about Ford. I have seen and worked with the results of what Mulally has been doing here. Nobody in Ford would have been this successful at making these changes because of the "culture" here. It takes someone from the outside to come in and shake things up and say "This sh-t's gonna stop."

I believe he is one of the very few leaders left in this country. Look into Lee Iacocca's "Where Have All the Leaders Gone?" book to see what I am talking about. I've got it on CD, read by Lee himself.

Steve

I've said it for a while, and even posted links to him being on the floor at Boeing when the 777 was having the wing test done as part of the certification; he's that much of a hands on kind of guy. Many within the Boeing company, actually view him as the father of the 777 - the most successful airplane to date. 0 hull loss and 1 crash which resulted in 0 casualties.
Actually, that crash in question was a BA 777 on final approach to heathrow when they had no throttle response so they landed short of the runway. Investigations have proven that the fault was with the engines manufactured by Rolls Royce, where the engines had insufficient anti icing devices to stop ice crystals forming around the inlet to the engine core. Not the fault of Boeing at all. In other words, Mulally is aces in the aviation world and he literally turned an arrogant/failing company into the world leaders of design and innovation they are today. His performance at Ford to date is no different, and the way he structures business and his employees around certain tasks is ultimately one of his hallmarks. Ford could hope for no better CEO; GM could only pray for someone like Mulally.

Falc'man · 18-05-2009, 07:06 PM

Quote:

Originally Posted by Tuddy200

Close to $15 billion last year with only $2 billion first quarter this year, times by four thats $8 billion, leaving the buffer $7 billion.

We all know there will be no profit this year, or next, however, we can clearly see the loss margin getting smaller and smaller by the years. I don't recall the figures but GM's looked a hell of a lot worse then that!

It was bound to be alot less than $15b last year if it weren't for the GFC.

As per my previous post, the image and public perception Ford now has in the US is alot better than the competition. Their model line-up is awesome, and they're scheduled to release even better models soon; a result of their decision to go for the jugular and press on with them at the time of GFC - at the same time GM decided to pull the pin on just about everything, just to save money. This means the gap between the two over the next few years will just widen. In whatever form GM remain alive, they're screwed.

HSE2 · 18-05-2009, 10:05 PM

Quote:

Originally Posted by Falc'man

It was bound to be alot less than $15b last year if it weren't for the GFC.

As per my previous post, the image and public perception Ford now has in the US is alot better than the competition.

Ford Aust employees were made aware of this very early in proceedings and it would be fair to assume that the image and perception strength would filter down into other markets.

vztrt · 19-05-2009, 02:54 PM

Quote:

Originally Posted by Falc'man

http://www.quote.com/news/story.action?id=KRO136e4474

Ford on the road to profit in '11, CEO Mulally says
....edit...

Here's some more on the 2011 profit.

http://www.goauto.com.au/mellor/mell...2575BB000B30CF

Quote:

Ford can see a profit in 2011

Ford’s Mulally says worst is over in global auto sales crisis

By IAN PORTER 19 May 2009

FORD Motor Company chief executive Alan Mulally said he believes the world slump in vehicle sales has bottomed and that demand will start to rise in the third or fourth quarter of 2009.

This, and the progress being made in restructuring the group’s North American operations could see Ford back in the black by 2011, Mr Mulally told the annual meeting in Delaware.

He praised governments around the world for the stimulatory policies they had enacted, saying he believed these had hastened the recovery from the global financial crisis.

Speaking after the annual meeting, Mr Mulally said decisions to reduce interest rates and to counter the illiquidity of financial markets with cash advances in various countries were starting to have an effect.

"We are very encouraged," he said. "We're going to see the start of this turnaround in the third and the fourth quarter."

He said Ford would continue to bring its production capacity down into line with demand around the world and would continue its long established policy of consolidating dealers across the US – a policy GM and Chrysler have also adopted.

"We are confident that we will not only survive this downturn, but that we will emerge as a lean, globally integrated company poised for long-term profitable growth," Mr Mulally said, adding that the automaker was on track to be at or above break-even in 2011, excluding special items.

Ford is the only US manufacturer not operating with the help of government loans, having started its own restructuring process in 2006 under its Way Forward Plan.

Capacity was to be cut 26 per cent, the workforce cut by up to 30,000 hourly workers and operating costs reduced by $US5 billion ($A6.5 billion).

During the meeting, several investors said they were encouraged by the company's response to the economic crisis and the restructuring moves it had taken to become more competitive.

The meeting attracted a modest turnout of 98 shareholders, although this was up from the meagre crowd of 58 who fronted the 2008 meeting.

This year’s meeting was enlivened by the appearance of former presidential candidate the Reverend Jesse Jackson who argued strongly for the company to make more cars inside the US, and not send more assembly work over the border.

Mr Jackson, who has actively lobbied on behalf of minority suppliers and dealers recently, said some company decisions to close factories had eliminated thousands of American jobs. He urged Ford to make renewed commitments to "reindustrialising" the US.

"The Ford Fusion, made in Mexico, can be made in America," he said. "The automotive industry is the heart of our manufacturing. It's the backbone of our financial markets."

Mr Jackson said other countries had put barriers up against US vehicles while America continued to encourage free trade.

"Getting there, we face walls. Getting here, they face bridges," the civil rights leader said.

Ford executive chairman Bill Ford jun thanked Mr Jackson for raising those issues, but defended Ford's global strategy.

"Regarding the reindustrialisation of America, I couldn't agree with you more," he said. "We cannot let our industrial base go away. (And) we are investing here in America."

As evidence, Mr Mulally pointed to Ford's announcement that it would produce the next generation Ford Focus compact car in Michigan.

Aside from Mr Jackson's appearance, this year's annual meeting was a low-key affair compared to past gatherings.

Chief financial officer Lewis Booth said programs to encourage motorists to trade in older models for new, more fuel-efficient vehicles were having an immediate impact in countries that had adopted them.

For the fifth year in a row, shareholders were asked whether they wanted to end the privileged voting rights that the Ford family held, which gave the family control of the company despite not owning a great proportion of the shares on issue.

The advisory vote seeking the end of the special voting powers failed for the fifth time.

Under the unique voting structure, Ford family members hold a 40 per cent voting interest through 70.9 million Class B shares, while the automaker had more than 2.3 billion common shares outstanding as of March 18, according to its proxy statement.

The motion received 25.05 per cent support when it was brought in 2005. It had received more than 27 per cent support the past two years, but received only 19.5 per cent at this year’s meeting.

Ford posted a company record net loss of $14.7 billion ($A19.24 billion) in 2008 and losses totalled $30 billion ($A39.25 billion) over the past three full years. It posted a first-quarter net loss of $1.43 billion ($A1.87 billion).

On the day before the annual meeting, the company raised $US1.4 billion ($A1.83 billion) through a new issue of 300 million ordinary shares at $US4.75, in a move Mr Mulally said was an important step towards making the company profitable again.

Part of the cash would be used to help meet Ford’s obligations towards the creation of a trust fund to handle all the health fund requirements of retired Ford employees. The fund would hand the responsibility to the United Auto Workers union and end Ford’s financial responsibilities in this costly area.

Issuing equity now and possibly funding a larger portion of its retiree obligations with cash would help Ford improve its balance sheet and reduce the potential impact of those obligations on its shareholders, Mr Mulally said.

In April, Ford also persuaded holders of $US9.9 billion ($A14 billion) in unsecured debt to accept repayment of less than 50 cents in the dollar made up of $US2.44 billion in cash and 468 million new shares.

The redemption cut the company’s annual interest bill by $US500 million ($A654 million), but Ford still has $US15.9 billion of debt on its books.