Ford CEO Alan Mulally: Love Conquers All

Robert Farago
by Robert Farago

Ford has roughly $18 billion in the bank. The company’s CEO has slowed The Blue Oval’s cash burn to about a billion a month. If you take away $10 billion—the amount of float needed to keep the lights on—Crazy Henry’s mob has eight months to stop the arterial spray of red ink before contemplating C11 (or a “proper” bailout). Volvo’s sale looks like it will give them another month (about a billion). Although Ford tapped the credit markets for $1.6 billion in May, another offer may not be greeted with open arms. So let’s call Ford’s drop-deadline a year, maybe 18 months. Oh, did I mention a $5.9 billion dollar Department of Energy “retooling loan?” That’s worth another six months on our timeline. But that’s different. “Ford is the only one of the Big Three U.S. automakers that hasn’t taken government bailout money or declared bankruptcy,” NPR declares, disingenuously. “Ford is still losing $1 billion per month, but it has money in the bank and hopes to be making money by the year 2011.” The media meme in a nutshell. In an interview with publicly-funded radio, Ford’s CEO connected the dots between perceived purity and customer conquest, and hinted that yes, they did stick their noses in the taxpayer trough.

How much of Ford’s recent turnaround do you think can be attributed to people who aren’t going to buy from GM and Chrysler because of their recent bankruptcies?

About half of the market share that we are gaining is from GM and Chrysler and about half are from our Japanese competitors. We’re all very sensitive when companies use taxpayer money. In Ford’s case, consumers are not only very pleased with our cars and trucks, but they are very pleased that we did not take taxpayer money, that we are paying our loans back and we are right on our plan to move back to profitability in 2011.

Not to beat a dead horse, but Big Al makes a distinction between “taxpayer money” and “taxpayer loans,” because, I dunno, loans don’t involve cash? And if that cash burn stays at about a billion ’til 2011 well, it’s gonna be real close. Maybe Al should ditch that $25 million paycheck and stop using those jets for family travel to help out the cause.

Meanwhile, here’s a good one: “We will be absolutely competitive on every vehicle we make.” Wow! Oops, he was talking about cost structure versus the other guys. Now if he said that about every Ford vehicle’s competitive appeal . . . That would have been Edgy.

Robert Farago
Robert Farago

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  • U mad scientist U mad scientist on Aug 19, 2009
    As far as the American Engineering @ University discussion, the U.S. is at a lull in terms of investing in the hard sciences and R&D, and foreign competitors in Asia and even Europe are wiping out are edge. American government is far too busy spending $$$ on social entitlement programs and stimulus - great for short term election results in terms of votes; all while the economy and infrastructure crumbles. US science is doing just fine, and number of foreign faculty it attracts regularly is a sign of that. What would really make a difference is if the general public were aware of science at all. To them, it's as if the last 30 years of progress didn't happen at all. All those polls where half the peeps don't believe in well support theories? And you have to seriously doubt if the other half even know why it's true. Yeah, that's a problem.
  • Anonymous Anonymous on Aug 19, 2009
    Ford Cars - The market speaks for itself. So..... Mediocre at best.
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