Ford Death Watch 48: 'til the Cows Come Home

Speaking of barnyards, someone forgot to tell Ford watchers not to count their chickens until they hatch. The MSM is ready, willing and able to pronounce the Blue Oval Boyz’ turnaround plan for the ailing American automaker as good as done, and skip the “it worked!” part of CEO Big Al Mulally’s canonization. The Detroit News is down with this fait accompli meme. “As one fund manager who controls a sizable chunk of Ford’s stock and bonds put it: ‘The biggest threat to Ford’s future is that Mulally steps off the curb tomorrow and gets hit by a bus.’ Such sentiments, blunt as they may be, are a testament to the progress Ford has made since Mulally took over as CEO in September of 2006. He predicts the company should settle into profitability by late 2011.” So that’s it, then, save “Mulally is no stranger to success” and “He’s been an agent of change” and “For many Ford employees, he has rock-star status” and I think they ought to think it out again.

Not to go all Nixonian on you, but it looks like I’ll have Big Al to kick around for a while:

Ford Motor Co. CEO Alan Mulally says he has no intention of retiring before restoring the Dearborn automaker to sustained profitability.

Mulally turns 64 next month, and Ford executives have typically retired by age 65. If he followed that policy, the chief architect of Ford’s turnaround plan would leave before reaching his long-stated goal of returning Ford to full-year profitability. But Mulally told the Detroit News he intends to stay.

“As long as I’m contributing, I’m honored to serve Ford,” he said last week. “But I’m one person on a fabulous team.”

OMG! Did he say fabulous? Has he SEEN Mark Fields’ mullet? Anyway, am I the only one who sees the irony in this bit of DetN hagiography?

Some of the credit for these accomplishments belongs to other Ford executives.

Former Chief Financial Officer Don Leclair and then-CEO Bill Ford began assembling the financing plan before Mulally was hired, and much of the cost reductions that have trimmed billions from Ford’s North American operations were the results of Fields’ “Way Forward” plan or part of an accelerated effort that he and Leclair had already drafted.

But Mulally has done something that no other Ford executive in history has been able to: taken a sledgehammer to Ford’s infamously careerist corporate culture, which too often put individual advancement ahead of the company’s long-term success.

Ford insiders are free to email me (farago@ttac.com) backing-up the contention that the Glass House Gang’s days of competing fiefdoms have gone the way of English titles. (Oh wait . . .) My contacts tell me that everyone’s saying a lot, but they’re not doing anything. Remember our post about Ford’s ridiculous number of seat track assemblies? The tempus have not fugit. Parts commonality may exist worldwide for a few key products, but it’s not happening across brands or models.

Truth be told, Ford’s turnaround is a LONG way from finished. Volvo. Lincoln. Mercury. All dead brands walking. The Ford brand is no stranger to amorphousness, with plenty of overlapping products that don’t sell in enough quantity at enough of a margin to earn enough money for Ford to become profitable.

Of course, there’s always the next big thing. But if the new C-Max, Edge, Explorer, Fiesta and Focus tank like the Flex, old Taurus and Taurus X, the company’s slide is sure to continue. Even if Ford convinces more investors to come on board, the company still has too many models and dealers and not enough brand. They’re still losing money.

The clock is ticking. As BusinessWeek‘s David Kiley points out, “During its quick trip through bankruptcy court, GM shed $40 billion in debt. That’s roughly the amount Ford could have on its books in just two years.”

Ford is banking on a climbing share price and its brand momentum to bail it out. But if that doesn’t happen, Ford could have less money than its crosstown rival to spend on new vehicles and marketing in a few years. “We’re really focused on the balance sheet right now, and the liquidity we need to make it through [the recession],” says Ford CEO Alan Mulally. “We are watching closely but haven’t seen evidence yet that we are being disadvantaged.”

Disadvantaged relative to whom? Chrysler and GM? What about Honda, Toyota, Hyundai, Volkswagen et al.? Not to put too fine a point on it, TTAC’s Ford Death Watch continues.

Oh, and I repeat: $5.9 billion worth of Department of Energy retooling loans says Ford is not “the only American automaker to eschew a federal bailout.” If you think the loans were created to improve fuel efficiency, I’ve got some New GM stock I’ll sell you cheap. It’s not available yet, but hey, why wait ?