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How A New CEO Turned Around Ford

No bailout and a record $20 billion in profits last year.


How Outsider Alan Mulally Rescued Ford

Some people underestimate Alan Mulally when they first meet him. Ford Motor Co.'s 66-year-old chief executive, who grew up in Kansas and once aspired to be an astronaut, looks and sometimes acts like an overgrown Boy Scout. He laces his speech with words such as "neat," "cool" and "absolutely."

But the farm-boy exterior conceals one of business' toughest, most ruthless managers. When a desperate Bill Ford recruited Mulally from Boeing in 2006, Ford was heading for a $12.7-billion loss and on the verge of losing its No. 2 sales spot in the U.S. to Toyota because of poor management and an uninspiring vehicle lineup.

Four years later, Ford reported a $6.6-billion profit — the biggest in the sector that year — and Toyota was comparing its cars with Fords, not Hondas, in its ads.

In his new book "American Icon: Alan Mulally and the Fight to Save Ford Motor Company," author Bryce G. Hoffman, a veteran reporter with the Detroit News, details "one of the greatest turnarounds in business history" and, to a lesser extent, the man behind it.

Published by Crown Business, the book makes for a fascinating read for anyone who follows the car industry; others may find the story engaging too, if hard work in places.

Ford was in deep trouble in 2006, with a poisonous culture in which executives fought turf wars and sat through endless meetings but made the real decisions elsewhere.

When Mulally arrived, many of its senior managers in Dearborn, Mich., did not deign to drive Fords or even cars made by its rivals, preferring the Jaguars and Land Rovers made by its loss-making British luxury brands. The new boss made them drive Volkswagens and Hondas.

Importing a practice from Boeing, he introduced weekly meetings that were mandatory for all senior managers. Executives were barred from using BlackBerrys or belittling one another; they were required to grade their own progress on targets truthfully and to confront problems head-on.

Initially, Mulally faced resistance in a company — indeed, an industry — that has always viewed outsiders with suspicion.

But he made a series of canny decisions and astute appointments that protected Ford as the U.S. car industry headed into a crisis in 2008 that nearly sank the century-old company and its two Detroit competitors, General Motors and Chrysler.

Mulally protected product spending even as Ford cut thousands of staff and economized on everything else, down to paper clips and plant watering.

He made tough decisions only a cold-eyed non-car enthusiast would, such as selling Ford's European premium brands and its stake in Mazda so it could focus on its core "blue oval" mass-market cars.

Some of the masterstrokes attributed to Mulally were already underway when he joined. His predecessors had begun steps to borrow $23.6 billion in 2006, just before credit markets closed.

But Mulally sealed that deal — brilliant in hindsight because it enabled Ford to refuse a federal bailout and a trip through bankruptcy that would have seen its shareholding family's members diluted out of their birthright.

Avoiding Chapter 11 bankruptcy also gave Ford's cars an edge over GM and Chrysler with U.S. consumers, while better vehicles developed on Mulally's watch began rolling into dealerships.

Some of the stories in the book have been told before, but the author delivers much new, excellent reporting collected in interviews with all the main people concerned.

Mulally is a constantly chipper, boosterish presence, whether bucking up dispirited colleagues, preparing for a presentation in Congress or hugging a dumbfounded customer at a dealership in Shanghai.

"Mulally ripped off the bandage, cauterized the wound and cured the disease," the author concludes, with his typical gusto. "Only an outsider could do that."


Merry Christmas.  662 hp.

2013 Shelby GT500 - Launch Control

Ford's Performance Vehicle Chief Engineer Jamal Hameedi talks about the company's new wave of high-performance vehicles.

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Reader Comments (13)

This is the man that should be running OUR country.
Dec 20, 2012 at 4:46 PM | Unregistered Commenterjohn
Found On the Road Dead
Dec 20, 2012 at 6:52 PM | Unregistered CommenterAmerica makes garbage
Nice retort to 'America Makes Garbage'. And agreed on Mulally.
Dec 21, 2012 at 3:10 AM | Registered CommenterDailyBail
Ann loves her 2006 Jetta VW, TDI Diesel that gets 57-58mpg on the hiway, and 38-40mpg around town, going back an forth to work and Dar going out to the airstrip to fly our plane. Most just going threw town to get to the north side of town and get in the air.....

But if I need'ed a real truck to pull our plane to all the meets around the country, it would be a "Ford"...........they dident cave to Bummers stupid offer and let him and his union buddys control the Co. Love the Fords in the 50's.......60's......had many.

Found out what Sex tasted like in the back seat of my 57 Farline 500 "Starliner".........Nothing like ( Wine or Cheese Either )........it dont get better, but the more you have, the better it is.........!

My 58 only got better in the back seat. 2 girls in the bucket seat wasent doing it, so I parked it and we all climed in the back seat.........."Hell Yea", I love my Ford Cars.......................Now "Cheese & Wine" hit the Sweet Spot............!

Cheese & Wine, dose taste better, togeather.................Jus Sayin...!
Dec 22, 2012 at 12:18 AM | Unregistered CommenterTexas Dar
Was a chevy guy til fairly recently. Have two Ford trucks, both with over 200,000 miles and still working fine, Easy to work on and easy to get parts for. The junkyards across America are loaded with them if I can't find the part at our local parts store. Occasionally like to burn em out. Just a red neck. All I'm sayin.
Dec 22, 2012 at 9:54 AM | Unregistered CommenterSKINFLINT
I have a Focus that is just the best car, and an F350 Triton V-10 4x4, gets about 24mpg. Wouldn't trade either of them.
Dec 24, 2012 at 10:17 AM | Unregistered Commentercanuck
Canuck, I asked Santa for one of those F-350's. All I expect is a lump of coal like last year, but it's nice to dream....
Dec 24, 2012 at 12:53 PM | Unregistered Commenterjohn
They are a complete pain in the ass to work on John. If the mechanic comes with it and not at Ford shop prices, it might be worth it.
Dec 24, 2012 at 8:33 PM | Unregistered CommenterSKINFLINT
The second video clip is the launch control of GT500. The expert engineers give their full dedication to make this car. After completion it is the time to launch. But it is testing period and most important. One mistake may be proved very expensive. If there is any mistake observed then it will not send to market. It is the last phase of launching.
<a href="http://www.eurotechtuningca.com/">bmw repair Campbell</a>
Apr 9, 2013 at 2:10 AM | Unregistered Commenterrobert
Car is such an electronics in which you can get all the comfortable parts for an easy and better riding and for secure life also. Remote car is such an invention by which your life will be easy. From a distance also you can manage your car. While you will be busy in some work then at that time you can also place your pets inside the car and can manage them through remote control. This blog provides a great knowledge about the remote control cars which will help you to get idea about the remote car.+
May 16, 2013 at 7:13 AM | Unregistered CommenterHarris
Use of car growing rapidly these days due to the car lovers. Car industry making various car models using advance technology now a day. Each Automobile company or car manufacturing trying to make various innovations in the manufacturing process. This also coming in a positive result and the new car of a particular car brand also getting appreciation for this. Now, the electric charged cars are very popular these days.
Oct 5, 2013 at 10:02 AM | Unregistered CommenterEd Joice

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