Last year the CEOs of the Big Three of the American car industry went to Congress seeking financial assistance. When it became clear that Congress was only offering short-term loans with a lot of strings attached, GM and Chrysler had no choice but to accept the deal. Ford, however, walked away without taking the loan. Since then, as GM and Chrysler struggle to survive in the economy, Ford has been going it alone. But that doesn't mean Ford is in an entirely happy place. To survive they've had to sell off brands such as Jaguar, Land Rover and Aston Martin, and are talking about putting Volvo up on the auction block.
In this interview on "The Takeaway," Ford CEO Alan Mulally talks about the future of the company, and how it plans to stay competitive in a tough market.
John Hockenberry: Living on the edge. Edge is so ‘90s, but Ford's new product line is rolling out as the automaker is enjoying something of a dream moment. In the midst of a life or death crisis for General Motors and Chrysler and a near nationalization of those companies, Ford has been quietly going it alone. So far it has said it doesn't need Federal bailout money. But that doesn't mean Ford is absolutely in a happy place financially. Last year, Ford made its biggest ever annual loss, despite the sale of Jaguar and Land Rover. Now, it’s in talks to sell off its Swedish subsidiary, Volvo. Joining us now is Alan Mulally. He's CEO of the Ford Motor Company. He joins me now from Ford headquarters in Dearborn, Michigan. Mister Mulally, thanks so much for being with us.
Alan Mulally: You’re welcome. Good morning to you, John.
Hockenberry: My first question to you is that a lot has been made of the fact that Ford's dodging the bullet here is not so much a matter of management, as it is a matter of timing. In the fact that you had a reversal of fortunes about two and a half years ago and arranged a credit line that has really been beneficial right now. Is it a more a matter of timing or more a matter of management savvy that's really gotten you to this point?
Mulally: [Laughs] That's a tough question. I clearly think that the financing is the important part of our business plan, but John, I go back to is the fundamental point of view that the Ford Motor Company has taken about the future going forward, and the actions that we have taken to create that future. Two and a half years ago we decided that fuel efficiency was going to be very, very important to all of us going forward, along with quality and safety and good value. We also decided that we wanted to provide the customers with an absolutely clear vision of Ford and focus on the Ford brand. As you mentioned, we divested Aston Martin, Jaguar and Land Rover and bought down our relationship in Mazda, and, of course as you mentioned, we’re looking at the next steps with Volvo. So, the other thing we decided was that we were going to be in every market segment that customers wanted us in – small, medium, or large cars, utilities or trucks. And, we decided that every new vehicle that you got from Ford would be best in class and quality, fuel efficiency, safety, and value and we have made tremendous progress on all four, five of those elements. And of course the piece that you mentioned is that we knew that the economy was going to slow down, we wanted to continue this transformation during the worst of times and so we took on some extra debt and we have sufficient liquidity to make it through this and be there with the products that people do really want.
Hockenberry: Well 41% decline in sales is the last reported number, so demand is going to have to pick up for you to avoid some of the similar difficulties that your colleagues at General Motors and Chrysler are experiencing in a very painful way right now. Last night, your colleague, executive chairman William Ford told National Public Radio that the most positive news on the statistic front for Ford is the growing market share. That sounds like me you might be happy to see Chrysler go away or a much smaller General Motors. Is that true?
Mulally: Well, the most important thing is that we have and continue to produce the vehicles that people really do want. And, we have really appreciated the fact that the customers really love the new line up and we have increased market share over the last few months and quarters, which is terrific.
Hockenberry: But it's also conceivably a euphemism for it’d be great if there was no more Chrysler, do you believe that?
Mulally: Well, we don't have a point of view about the competition. Clearly the auto industry worldwide is very competitive and Ford is very well position, not only in the United States, but also in South America, Canada, Europe, and Asia Pacific. So, another part of our plan has been to leverage these fabulous Ford vehicles around the world, whether they’re small, medium or large, and bring that scale and that quality to all the markets around the world. So, we feel like we’re on a really good track.
"The Takeaway" is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what’s ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH.