With GM and Chrysler both now in bankruptcy, a relatively healthy Ford stands to benefit, even as its two struggling Detroit rivals gain the advantages of powerful government backing.
Unlike GM and Chrysler, Ford hasn’t taken any money from the government. Two years ago, Ford’s Chief Executive Alan Mulally mortgaged every conceivable asset owned by the automaker to the tune of $23 billion to finance its turnaround plan.
While industry observers enthuse about the salutary effects of “quick rinse” bankruptcy plans for General Motors and Chrysler, as if these companies are simply changing hair color, Ford seems to hold onto the quaint notion that insolvency is better avoided.
It’s a position that’s pushing customers into Ford showrooms by default, as it were, according to Jack Kain, owner of a Ford dealership in Versailles, Ky.
“We’ve had so many people come in who have never come into a Ford dealership before, who have told us they were so happy Ford wasn’t having to borrow money from the government,” said Kain.
These customers are coming from both domestic and foreign nameplates, he noted.
“We’ve never had so many foreign cars on our [used car] lot,” Kain said.
It’s a perspective echoed by Rik Paul, automotive editor for Consumer Reports.
“A lot of people are thinking of buying American because they want to do their bit for the economy, but they are turned off by the problems at GM and Chrysler,” he said.
In fact, 63 percent of consumers surveyed by AutoPacific reported concern about buying from Chrysler, and 54 percent worried about buying from GM, even before the company filed for bankruptcy Monday, according to Ed Kim, director of industry analysis for the consultancy. By contrast, only 13 percent of consumers expressed concern about buying from Ford, he added.
Consumer Reports found an even stronger aversion to insolvent carmakers, with 78 percent of those surveyed saying they were unlikely to buy from a manufacturer in bankruptcy and 64 percent saying they were very unlikely to do so.
Shoppers not only say they are more comfortable buying from a solvent car manufacturer, they are voting with their dollars and driving Ford sales upward while Chrysler and GM shoppers hesitate.
“May will mark the seventh month in the last eight that Ford has increased its retail market share,” said George Pipas, Ford spokesman for sales analysis and reporting. “That hasn’t happened since early '90s,” when the company’s sales were powered by the twin dynamos of Taurus and Explorer. “At the retail level, last month’s 13 percent share was a point higher than a year ago,” he added.
(Ford and rival carmakers were scheduled to release official sales figures for May Tuesday.)
Ford has significantly curtailed sales to daily rental fleets, a onetime mainstay, and now rental sales account for only about 10 percent of production, a volume that is on par with competitors like Toyota, Pipas said. In the past, fleet sales were substantially less profitable than retail sales, but the profit gap has nearly evaporated under the harsh reality of mountainous incentives on retail sales.
The reduced fleet sales improve residual values, making Ford cars more financially appealing, according to Pipas.
But what about later this year or next, when slimmed-down GM and Chrysler get back in the car game in earnest, and their trips through bankruptcy relieve them of substantial costs? Will Ford be disadvantaged, or will the company take the sales lead from GM and power away on the momentum it is now building?
Observers say most of the advantages still will lie with Ford, even after GM and Chrysler benefit from deeper cost cuts than Ford may be able to achieve without bankruptcy and White House intervention.
Ford enjoys greater consumer confidence, holds esteem for its aversion to government aid, is getting higher ratings for quality and reliability, and has an array of fresh products queued up for introduction in coming months, including a refreshed Taurus family car that is earning praise from those that drive it.
“In our assessments, Ford products have done very well in recent years,” said Paul of Consumer Reports. “Cars like the Ford Fusion, Mercury Milan and Lincoln MKZ are among the most reliable models on the road.”
GM and Chrysler will have potentially lower costs and easier access to loan money for dealers and customers because of federal support of their loan arms.
Thanks to the government aid, the minimum FICO credit score to qualify for a loan has fallen to 621 from 700 for GM and Chrysler, said Paul Taylor, chief economist for that National Automobile Dealers Association.
“At 621 you include a lot of normal consumers who may have a slight hiccup some time in the last five years," he said. "That was an important change.”
But this small advantage will not offset Ford’s myriad advantages, Taylor insisted. “When you start listing these things, the list for Ford gets pretty long,” he said. “For GM and Chrysler it would be largely financial and is a much shorter list.”
Still, having the government’s assistance is a powerful advantage.
“They have the benefit of being streamlined by the government,” said Paul, referring to GM and Chrysler. “So they will be smaller, more agile, better able to compete. Ford is doing restructuring on its own, but it remains to be seen if they’ll be able to complete their own restructuring in a timely manner.”
“I’ve seen forecasts that put Ford ahead of GM [in sales] this year,” said Kim. “They may emerge as the top-selling domestic manufacturer,” he said. “It’s not impossible that could happen.”
A key reason that GM needs fewer dealers is that it has fewer brands than before, so now it can concentrate its marketing and support dollars on those remaining brands and dealers.
Ford is not eliminating dealers, but because those dealers are for effectively only two brands, Ford and Lincoln/Mercury, which are always paired, its marketing money is already focused.
“Ford really has just two dealership networks,” said Kim. “So they don’t have quite the dealer proliferation problem GM does.”
For its part, Ford says it’s not worried about being left disadvantaged by government action.
“I don’t think Washington has any notion to save two companies at the expense of one,” said Pipas. “I can assure you we’re not going to be uncompetitive.”
Tuesday, June 2, 2009
Ford U.S. sales strongest since July
DETROIT (Reuters) - Ford Motor Co said on Tuesday that U.S. sales fell 24.2 percent in May for all of its brands as the only U.S. automaker not in bankruptcy reported its strongest domestic sales month since July 2008.
Ford sales fell to 161,531 vehicles in May, including all of its brands, from 213,238 vehicles a year earlier. For its Ford, Lincoln and Mercury brands combined, sales fell 24.3 percent to 155,954 vehicles in May from a year earlier.
The 155,954 Ford, Lincoln and Mercury vehicles sold in May represented the strongest month for those brands since July 2008.
Ford is among the first of the large automakers to report U.S. auto sales for May, a day after rival General Motors Corp filed for bankruptcy protection in New York, joining Chrysler, which had filed for bankruptcy on April 30.
The automaker said it reduced incentive spending in May, but believed that the market share for its Ford, Lincoln and Mercury brands grew to its highest level since 2006.
For those brands, car sales fell 25.5 percent from a year earlier, crossover sales fell 9 percent, SUV sales fell 37.4 percent and truck and van sales fell 28.7 percent, it said.
Ford said on Monday it had made a small production increase in North America for the second quarter over its previous plan and set a third-quarter production plan of 460,000 vehicles, or 42,000 higher than a year earlier.
The automaker said it ended May with inventories of 350,000 vehicles, or a 56-day supply, 210,000 lower than a year earlier.
Ford shares were unchanged at $6.13 on the New York Stock Exchange in early afternoon.
(Reporting by David Bailey, editing by Matthew Lewis).
Ford sales fell to 161,531 vehicles in May, including all of its brands, from 213,238 vehicles a year earlier. For its Ford, Lincoln and Mercury brands combined, sales fell 24.3 percent to 155,954 vehicles in May from a year earlier.
The 155,954 Ford, Lincoln and Mercury vehicles sold in May represented the strongest month for those brands since July 2008.
Ford is among the first of the large automakers to report U.S. auto sales for May, a day after rival General Motors Corp filed for bankruptcy protection in New York, joining Chrysler, which had filed for bankruptcy on April 30.
The automaker said it reduced incentive spending in May, but believed that the market share for its Ford, Lincoln and Mercury brands grew to its highest level since 2006.
For those brands, car sales fell 25.5 percent from a year earlier, crossover sales fell 9 percent, SUV sales fell 37.4 percent and truck and van sales fell 28.7 percent, it said.
Ford said on Monday it had made a small production increase in North America for the second quarter over its previous plan and set a third-quarter production plan of 460,000 vehicles, or 42,000 higher than a year earlier.
The automaker said it ended May with inventories of 350,000 vehicles, or a 56-day supply, 210,000 lower than a year earlier.
Ford shares were unchanged at $6.13 on the New York Stock Exchange in early afternoon.
(Reporting by David Bailey, editing by Matthew Lewis).
Monday, June 1, 2009
Ford shows electric vehicles on car-less Mackinac Island
Mackinac Island is famous as a place where cars aren't allowed, but Ford Motor Co. managed to get permission to bring over a pair of vehicles that it hopes represent the future of transportation.
The Dearborn-based company staged a photo op between Executive Chairman Bill Ford Jr. and Gov. Jennifer Granholm Thursday during the Mackinac conference. Ford was displaying a plug-in hybrid-electric Escape sport-utility vehicle and a battery-electric Focus small car to be built at its assembly plant in Wayne in 2011.
Speaking with reporters, Ford said the company was pleased with its recent performance but isn't taking any pleasure watching its competitors struggle. Chrysler could emerge from bankruptcy as soon as Friday, General Motors is expected to file Chapter 11 on Monday and key supplier Visteon, which Ford spun off in 2000, filed for bankruptcy reorganization today.
"It's been our biggest concern all along," Ford said of suppliers. "There's no question the Obama administration and the (auto) task force understands it's a huge issue, and I think they've done a good job in their planning for all the eventualities to help the supply base...
"It breaks my heart the effect it has on people. From a business standpoint, Ford and all the major Visteon customers are helping provide the debtor-in-possession financing. So from a business standpoint, I think we should be fine."
Ford also reiterated that the company intends to avoid having to accept government loans. He noted the company recently raised $1.4 billion through an offering of 300 million shares of common stock, "which was a really strong signal that we could do that in this kind of market," he said. "We are financing ourselves and we'll continue to do so."
He said U.S. auto sales have remain mostly unchanged for the past few months.
"We're forecasting not a huge change going forward," Ford said. "I think it's prudent for us to be conservative. "Our market share has been going up, which we feel really good about, and we've kept our production in line with demand really I think very well for the last couple of years.
"You don't see us having enormous stocks out in the marketplace so we don't have to do huge incentives."
Granholm said the vehicles showed Ford's commitment to weaning the nation off its dependency on foreign oil.
"Michigan right now is at the cusp of this ability to move us forward, not just as a state but as a nation. That's very exciting," the governor said. "It's going to take a little bit of time, but it's very exciting."
The Dearborn-based company staged a photo op between Executive Chairman Bill Ford Jr. and Gov. Jennifer Granholm Thursday during the Mackinac conference. Ford was displaying a plug-in hybrid-electric Escape sport-utility vehicle and a battery-electric Focus small car to be built at its assembly plant in Wayne in 2011.
Speaking with reporters, Ford said the company was pleased with its recent performance but isn't taking any pleasure watching its competitors struggle. Chrysler could emerge from bankruptcy as soon as Friday, General Motors is expected to file Chapter 11 on Monday and key supplier Visteon, which Ford spun off in 2000, filed for bankruptcy reorganization today.
"It's been our biggest concern all along," Ford said of suppliers. "There's no question the Obama administration and the (auto) task force understands it's a huge issue, and I think they've done a good job in their planning for all the eventualities to help the supply base...
"It breaks my heart the effect it has on people. From a business standpoint, Ford and all the major Visteon customers are helping provide the debtor-in-possession financing. So from a business standpoint, I think we should be fine."
Ford also reiterated that the company intends to avoid having to accept government loans. He noted the company recently raised $1.4 billion through an offering of 300 million shares of common stock, "which was a really strong signal that we could do that in this kind of market," he said. "We are financing ourselves and we'll continue to do so."
He said U.S. auto sales have remain mostly unchanged for the past few months.
"We're forecasting not a huge change going forward," Ford said. "I think it's prudent for us to be conservative. "Our market share has been going up, which we feel really good about, and we've kept our production in line with demand really I think very well for the last couple of years.
"You don't see us having enormous stocks out in the marketplace so we don't have to do huge incentives."
Granholm said the vehicles showed Ford's commitment to weaning the nation off its dependency on foreign oil.
"Michigan right now is at the cusp of this ability to move us forward, not just as a state but as a nation. That's very exciting," the governor said. "It's going to take a little bit of time, but it's very exciting."
Getting your V6 to act like a V8, while saving gas
The history of engine improvements in the U.S. has tended primarily in one direction: raw horsepower. Engines have gotten bigger and more powerful over time—and that's certainly what automakers have used as a key selling point. But U.S. automaker Ford has decided to take turbocharging and direct fuel injection in another direction: fuel efficiency.
Yesterday, Ford began production of what it's calling the EcoBoost engine: a new gasoline motor that employs turbocharging, direct fuel injection, variable timing in the valves that control fuel and exhaust flow to make a smaller, lighter six-cylinder engine perform like an eight-cylinder engine.* When these technologies are combined, "you can now significantly downsize the engine," says mechanical engineer Dan Kapp, Ford's director for power train research. "The fuel efficiency comes from a much smaller displacement engine providing equal or, in most cases, superior performance to the engine you're replacing."
In essence, the new engine works by using the turbocharging to deliver more air to the fuel burning chamber, variable valve timing to fully flush exhaust gas after combustion in the chamber and then direct injection to overcome any knocking issues. ecoboost engine production line
The company estimates the new engines—which will begin appearing in the Lincoln MKS and MKZ and the Ford Flex and Taurus this summer—can deliver at least 10 percent more miles-per-gallon and therefore reduced emissions of carbon dioxide. By 2013, the company plans to produce 1.3 million vehicles with EcoBoost engines in them, including 90 percent of all Ford vehicles sold in the U.S.
Of course, such cars will be more expensive than current models, though Kapp declined to specify a price tag, saying only that fuel savings could pay for it "on the order of two years or less" at today's fuel prices. That’s compared to much longer payback times for diesels or hybrids (which Ford is also producing).
Ultimately, the EcoBoost engine will also have to cope with alternative fuels, and Ford plans in the longer-term future to move more towards hybrids and electric vehicles. But for the next decade or so, Ford will be relying on these engines to meet some of the new fuel efficiency targets announced this week and reduce pollution.
"What Ford is doing uniquely here is leveraging [EcoBoost] to deliver fuel efficiency through aggressive downsizing [of the engine] as opposed to the performance type approach," Kapp says. But it remains to be seen whether a car company that has spent years and millions of advertising dollars touting the horsepower that can be gained from such improvements (at the expense of fuel efficiency) can convince customers to change direction too.
Yesterday, Ford began production of what it's calling the EcoBoost engine: a new gasoline motor that employs turbocharging, direct fuel injection, variable timing in the valves that control fuel and exhaust flow to make a smaller, lighter six-cylinder engine perform like an eight-cylinder engine.* When these technologies are combined, "you can now significantly downsize the engine," says mechanical engineer Dan Kapp, Ford's director for power train research. "The fuel efficiency comes from a much smaller displacement engine providing equal or, in most cases, superior performance to the engine you're replacing."
In essence, the new engine works by using the turbocharging to deliver more air to the fuel burning chamber, variable valve timing to fully flush exhaust gas after combustion in the chamber and then direct injection to overcome any knocking issues. ecoboost engine production line
The company estimates the new engines—which will begin appearing in the Lincoln MKS and MKZ and the Ford Flex and Taurus this summer—can deliver at least 10 percent more miles-per-gallon and therefore reduced emissions of carbon dioxide. By 2013, the company plans to produce 1.3 million vehicles with EcoBoost engines in them, including 90 percent of all Ford vehicles sold in the U.S.
Of course, such cars will be more expensive than current models, though Kapp declined to specify a price tag, saying only that fuel savings could pay for it "on the order of two years or less" at today's fuel prices. That’s compared to much longer payback times for diesels or hybrids (which Ford is also producing).
Ultimately, the EcoBoost engine will also have to cope with alternative fuels, and Ford plans in the longer-term future to move more towards hybrids and electric vehicles. But for the next decade or so, Ford will be relying on these engines to meet some of the new fuel efficiency targets announced this week and reduce pollution.
"What Ford is doing uniquely here is leveraging [EcoBoost] to deliver fuel efficiency through aggressive downsizing [of the engine] as opposed to the performance type approach," Kapp says. But it remains to be seen whether a car company that has spent years and millions of advertising dollars touting the horsepower that can be gained from such improvements (at the expense of fuel efficiency) can convince customers to change direction too.
Can a 2010 Ford Fusion Go 1000 Miles on One Tank of Gas?
Have you ever heard of a “hypermiler”? It is a person who specializes at getting a lot of miles per gallon out of a vehcile. In other words, a fuel efficiency expert. They use Eco-Driving techniques to maximize operational efficiency. Recent studies show how you drive to be important and in some cases more important than what you drive in achieving the best fuel economy results. A good hypermiler can achieve 30-40% or better fuel economy than an typical driver using typical driving techniques. For instance, the new 2010 Ford Fusion Hybrid is rated at 41 MPG on its window sticker. Most of us have difficulty achieving even the stated economy of a vehicle. In recent tests and when it was driven by a hypermiler named Wayne Gerdes, the vehicle managed to produce a fuel economy rating of approximatley 70 MPG.
Ford Motor Company is commited to producing fuel efficient vehciles that protect our enviornment and help of to live off our own resources. It is more than just trying to be green. Yes, being green is a goal. But keeping our enviornment green is a much more valuable objective. So Ford’s hottest new vehicle is a cool efficient hybrid! Read more below.
[Source: Ford]
PRESS RELEASE:
Ford Team Aims To Drive 2010 Fusion Hybrid 1,000 Miles on a Single Tank of Gas
- The Ford Fusion Hybrid team will attempt to drive more than 1,000 miles for more than 43 continuous hours – on a single tank of gas, raising money for the Juvenile Diabetes Research Foundation in the process
- The most fuel-efficient, mid-sized sedan in America – the Fusion Hybrid driven by a team of Ford hybrid engineers, a fuel efficiency expert and a NASCAR star, will have to achieve an average of at least 57 mpg on the challenge to reach its goal
- By using Eco-Driving techniques engineers have achieved 70 mpg during testing of the Ford Fusion Hybrid in preparation for the challenge
- Consumers can improve their own vehicle’s fuel economy performance is by adopting Ford’s “Eco-Driving” tips used for the 1,000-Mile Challenge
DEARBORN, Mich., April 21 /PRNewswire-FirstCall/ — This weekend, the 2010 Ford (NYSE: F) Fusion Hybrid is being put to the ultimate fuel-efficiency test. A team of drivers, including NASCAR star Carl Edwards and world-record breaking hypermiler Wayne Gerdes, will attempt to drive more than 1,000 miles on a single tank of gas, raising money for the Juvenile Diabetes Research Foundation in the process.
The 1,000-Mile Challenge starts at around 8:00 a.m. on Saturday, April 25, from Mount Vernon, Va., and ends the morning of Monday, April 27, in Washington, D.C. The team will drive for more than 43 hours continuously to reach the 1,000-mile goal. The drivers will do stints of between two and three hours each and will have regular breaks to ensure safe driving is maintained. Already rated as the most fuel-efficient, mid-sized sedan in America, the Fusion Hybrid will need to average at least 57 mpg to achieve its goal. During preliminary testing in preparation for this challenge, Ford engineers have reached as much as 70 mpg in the Fusion Hybrid by using Eco-Driving techniques.
The team will run clinics for media and customers over the weekend in the Fusion Hybrid, conducting interviews and vehicle demonstrations on how simple techniques can make a significant difference to real world fuel economy numbers.
The Fusion Hybrid being used in the challenge will be a factory produced model with no modifications or alterations and will run on regular 87 octane gas.
The team will be uploading regular images and video to YouTube (http://www.youtube.com/fordstory), Flickr (http://www.flickr.com/photos/fordmotorcompany), Facebook (http://www.facebook.com/people/Kristopher-Spencer/1228149870), Twitter (http://twitter.com/Ford), and www.media.ford.com.
Ford is taking on the 1,000-Mile Challenge for a number of reasons:
* To demonstrate Ford’s commitment to be the best or amongst the best in fuel economy in every vehicle segment in which it competes;
* To highlight the crucial role the driver plays in maximizing fuel economy and demonstrate how consumers can make a difference through Eco-Driving;
* To raise awareness about Eco-Driving and how the Fusion Hybrid contributes to it with the ability to run up to 47 mph in pure electric mode; and
* To raise awareness and funds for the Juvenile Diabetes Research Foundation
The 1,000-Mile Challenge team comprises of:
* Wayne Gerdes, the world-record breaking hypermiling champion and founder of www.cleanmpg.com;
* Carl Edwards, the NASCAR race star who recently bought his own 2010 Ford Fusion Hybrid;
* Sherif Marakby, graduate of Maryland University and Ford hybrid chief engineer;
* Gil Portalatin, Ford hybrid applications manager and Ford Fusion Hybrid team leader;
* Tom Rolewicz, one of Ford’s top calibration experts and hybrid system expert; and
* Steve Burke, Ford product expert on hybrid applications
The mileage-maximizing techniques that the Ford team will use and pass on to consumers include:
* Slowing down and maintaining even throttle pressure;
* Gradually accelerating and smoothly braking;
* Maintaining a safe distance between vehicles and anticipating traffic conditions;
* Coasting up to red lights and stop signs to avoid fuel waste and brake wear;
* Minimize use of heater and air conditioning to reduce the load on the engine;
* Close windows at high speeds to reduce aerodynamic drag;
* Applying the “Pulse and Glide” technique while maintaining the flow of traffic;
* Minimize excessive engine workload by using the vehicle’s kinetic forward motion to climb hills, and use downhill momentum to build speed; and
* Avoiding bumps and potholes that can reduce momentum
Go here (http://media.ford.com/article_display.cfm?article_id=28946) for more Eco-Driving tips
Ford Motor Company is commited to producing fuel efficient vehciles that protect our enviornment and help of to live off our own resources. It is more than just trying to be green. Yes, being green is a goal. But keeping our enviornment green is a much more valuable objective. So Ford’s hottest new vehicle is a cool efficient hybrid! Read more below.
[Source: Ford]
PRESS RELEASE:
Ford Team Aims To Drive 2010 Fusion Hybrid 1,000 Miles on a Single Tank of Gas
- The Ford Fusion Hybrid team will attempt to drive more than 1,000 miles for more than 43 continuous hours – on a single tank of gas, raising money for the Juvenile Diabetes Research Foundation in the process
- The most fuel-efficient, mid-sized sedan in America – the Fusion Hybrid driven by a team of Ford hybrid engineers, a fuel efficiency expert and a NASCAR star, will have to achieve an average of at least 57 mpg on the challenge to reach its goal
- By using Eco-Driving techniques engineers have achieved 70 mpg during testing of the Ford Fusion Hybrid in preparation for the challenge
- Consumers can improve their own vehicle’s fuel economy performance is by adopting Ford’s “Eco-Driving” tips used for the 1,000-Mile Challenge
DEARBORN, Mich., April 21 /PRNewswire-FirstCall/ — This weekend, the 2010 Ford (NYSE: F) Fusion Hybrid is being put to the ultimate fuel-efficiency test. A team of drivers, including NASCAR star Carl Edwards and world-record breaking hypermiler Wayne Gerdes, will attempt to drive more than 1,000 miles on a single tank of gas, raising money for the Juvenile Diabetes Research Foundation in the process.
The 1,000-Mile Challenge starts at around 8:00 a.m. on Saturday, April 25, from Mount Vernon, Va., and ends the morning of Monday, April 27, in Washington, D.C. The team will drive for more than 43 hours continuously to reach the 1,000-mile goal. The drivers will do stints of between two and three hours each and will have regular breaks to ensure safe driving is maintained. Already rated as the most fuel-efficient, mid-sized sedan in America, the Fusion Hybrid will need to average at least 57 mpg to achieve its goal. During preliminary testing in preparation for this challenge, Ford engineers have reached as much as 70 mpg in the Fusion Hybrid by using Eco-Driving techniques.
The team will run clinics for media and customers over the weekend in the Fusion Hybrid, conducting interviews and vehicle demonstrations on how simple techniques can make a significant difference to real world fuel economy numbers.
The Fusion Hybrid being used in the challenge will be a factory produced model with no modifications or alterations and will run on regular 87 octane gas.
The team will be uploading regular images and video to YouTube (http://www.youtube.com/fordstory), Flickr (http://www.flickr.com/photos/fordmotorcompany), Facebook (http://www.facebook.com/people/Kristopher-Spencer/1228149870), Twitter (http://twitter.com/Ford), and www.media.ford.com.
Ford is taking on the 1,000-Mile Challenge for a number of reasons:
* To demonstrate Ford’s commitment to be the best or amongst the best in fuel economy in every vehicle segment in which it competes;
* To highlight the crucial role the driver plays in maximizing fuel economy and demonstrate how consumers can make a difference through Eco-Driving;
* To raise awareness about Eco-Driving and how the Fusion Hybrid contributes to it with the ability to run up to 47 mph in pure electric mode; and
* To raise awareness and funds for the Juvenile Diabetes Research Foundation
The 1,000-Mile Challenge team comprises of:
* Wayne Gerdes, the world-record breaking hypermiling champion and founder of www.cleanmpg.com;
* Carl Edwards, the NASCAR race star who recently bought his own 2010 Ford Fusion Hybrid;
* Sherif Marakby, graduate of Maryland University and Ford hybrid chief engineer;
* Gil Portalatin, Ford hybrid applications manager and Ford Fusion Hybrid team leader;
* Tom Rolewicz, one of Ford’s top calibration experts and hybrid system expert; and
* Steve Burke, Ford product expert on hybrid applications
The mileage-maximizing techniques that the Ford team will use and pass on to consumers include:
* Slowing down and maintaining even throttle pressure;
* Gradually accelerating and smoothly braking;
* Maintaining a safe distance between vehicles and anticipating traffic conditions;
* Coasting up to red lights and stop signs to avoid fuel waste and brake wear;
* Minimize use of heater and air conditioning to reduce the load on the engine;
* Close windows at high speeds to reduce aerodynamic drag;
* Applying the “Pulse and Glide” technique while maintaining the flow of traffic;
* Minimize excessive engine workload by using the vehicle’s kinetic forward motion to climb hills, and use downhill momentum to build speed; and
* Avoiding bumps and potholes that can reduce momentum
Go here (http://media.ford.com/article_display.cfm?article_id=28946) for more Eco-Driving tips
2009 Dodge Ram Recalled for Fourth Time
WASHINGTON — Chrysler is recalling 37,407 2009 Dodge Ram trucks with manual temperature control because the software programmed into the heating, ventilation and air-conditioning module may cause the windshield defrosting and defogging functions to become inoperative, according to the National Highway Traffic Safety Administration.
"This can decrease the driver's visibility under certain driving conditions and result in a crash without warning," said NHTSA in its recall summary of the problem.
This is the fourth recall of the 2009 Ram since March. Earlier recalls dealt with a clutch pedal problem, a windshield wiper problem and a windshield wiper module motor assembly problem, according to NHTSA.
In this latest recall, Dodge dealers will reprogram the HVAC module for free. The recall will begin in June. Owners may contact Chrysler at (800) 835-1403.
"This can decrease the driver's visibility under certain driving conditions and result in a crash without warning," said NHTSA in its recall summary of the problem.
This is the fourth recall of the 2009 Ram since March. Earlier recalls dealt with a clutch pedal problem, a windshield wiper problem and a windshield wiper module motor assembly problem, according to NHTSA.
In this latest recall, Dodge dealers will reprogram the HVAC module for free. The recall will begin in June. Owners may contact Chrysler at (800) 835-1403.
GM Recalls 2010 Chevrolet Camaro With V8 Engine
WASHINGTON — General Motors is recalling 1,243 of its 2010 Chevrolet Camaros equipped with a V8 engine. A potential short in the engine compartment could cause the vehicle to stall without the ability to restart or could result in an engine compartment fire, according to the National Highway Traffic Safety Administration.
"The positive battery cable may contact the starter motor housing and cause wear on the cable insulation," said NHTSA in its recall summary of the problem. "If the insulation wears through the cable, it could create a short.
"A short could result in a no-start condition, cause the vehicle to stall without the ability to restart, or result in an engine compartment fire."
The problem was first discovered in a 2010 Camaro SS, according to GM documents filed with the government.
Chevrolet dealers will reroute the positive battery cable to ensure adequate clearance. GM said it will start calling customers on May 6 and anticipates mailing owner letters on May 18. Owners can contact Chevrolet at (800) 630-2438.
"The positive battery cable may contact the starter motor housing and cause wear on the cable insulation," said NHTSA in its recall summary of the problem. "If the insulation wears through the cable, it could create a short.
"A short could result in a no-start condition, cause the vehicle to stall without the ability to restart, or result in an engine compartment fire."
The problem was first discovered in a 2010 Camaro SS, according to GM documents filed with the government.
Chevrolet dealers will reroute the positive battery cable to ensure adequate clearance. GM said it will start calling customers on May 6 and anticipates mailing owner letters on May 18. Owners can contact Chevrolet at (800) 630-2438.
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?
(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 shit 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. http://money.cnn.com/2009/05/11/news/companies/mulally_ford.fortune/index.htm?section=money_topstories" \l "TOP
(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 shit 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. http://money.cnn.com/2009/05/11/news/companies/mulally_ford.fortune/index.htm?section=money_topstories" \l "TOP
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