American Icon Ford Motor Company

        

Alan Mullay,Bill Ford and Mark Feilds  

          Recently I read a book "American Icon fight to save Ford Motor company".It talks about the effort of then CEO Allen Mullaly to save Ford from bankruptcy and extinction.Automobile was invented by Karl Benz in Germany 130 years back.But Henry Ford with his model T was first to mass produce automobiles and make it available to common man.Throughout its history Ford has had its ups and downs and had managed to be among the top three automobile manufacturers in America.       Ford is one of the few family run business which has managed to survive for more than a century.

          But at the start of 21st century due to decades of mismanagement Ford was on the verge of existential crisis.In 2001 Bill Ford the great grandson of Henry ford took up the CEO position of the company.He promised to bring back the glory days at Ford.But with all good intentions, after five years of him at the helm, company was facing bankruptcy with almost no chance of survival.Bill Ford understood that he couldn't turn around the company and needed to hire a CEO from outside the company.He tried very hard to find a CEO who could turn around Ford.After a long search he identified Alan Mullaly as the right candidate for the Job.

        Alan Mullaly was the number two man at Boeing and had managed to save Boeing from bankruptcy after the fall of world trade center.Allen Mullaly had an experience of more than 30 years developing passenger planes. Boeing 777 and Boeing Dream liner are some of the planes developed under his leadership.When he took over the CEO job, Ford was about to post its biggest quarterly loss of over 10$ billion.I will list down few things that he did at Ford which turnaround the fortunes of the company.

1.Self realization & Pride: Bill Ford had the maturity and self realization that he had to step down and bring in an external CEO to save Ford.He set aside his ego and hired Alan Mullaly to turn around Ford.One reason why Alan Mullaly left a comfortable Job at Boeing at age of 61 was his pride in American manufacturing.He wanted to save an American icon Ford motor company.

2.One Ford:Alan Mullaly's first realization at Ford was lack of team play.Everyone worked for their own interests and career.There was lot of back stabbing.First thing he changed was making people work together and towards common interest of Ford. Correct people were identified and the problem makers were asked to leave the company.Across the world Ford started working as a single company and started developing global vehicle platform's.

3.Focus:Ford had lost its focus had had become a house of brands.Apart from Ford it had other brands like Land Rover and Jaguar,Volvo,Lincoln,Mercury etc.Ford was not focusing on its core brand Ford.It was loosing lot of money on other brands.First thing Mullaly did was to start selling all the loss making brands and focus only on the brand Ford.

4.Cash:By 2006 Bill Ford and Leclair the CFO had the foresight that an economic recession was around the corner.They knew that cheap borrowing of money will not be possible after the economic recession sets in.Before the 2008 global financial crisis Ford managed to get a loan of 23$ billion by mortgaging all the assets of the company including the Ford brand.When the global financial meltdown happened Ford didn't have to file for bankruptcy as it had made provision for cash.Chrysler and GM filed for bankruptcy and had to be bailed out by the US government.

5.Research and Development:Even though Ford was posting the biggest losses in its history it didn't stop investing in new products.It invested in improving engine efficiency and developing small cars.When finally the economic started reviving Ford was ready with great products.This helped the company to make profits again and repay the loan quickly.

6.Customer and Quality:Ford started working on improving quality of its products by having same quality process and standards across the world.Ford declared that it will better Toyota in four years time.This was a laughing stalk for the people aware of automotive Industry.But this happened and Ford bettered Toyota in quality standards.Improved quality meant that the customers started returning back to Ford dealership and buying Ford cars once again.

7.Employees:Ford family had always maintained good relation with their workers.Henry Ford was first to implement five days of work at his factories.Good will with the workers really helped the company to negotiate better payment and insurance terms with employee union.This helped Ford to save billions of dollars on health insurance of workers and made manufacturing in America Viable again.

8. Techical Knowledge:Alan Mullaly during his working years at Boeing had gained in-depth understanding of engineering and manufacturing. This helped him to make  a quick  transition from aircraft to automobile industry.Negotiate well with suppliers and shut down plants to match  actual demand for vehicles.

         
            As promised Alan Mullaly managed to bring back Ford into profitability withing few years of him taking over.Alan Mullaly will go down in history as one of the greatest CEO in history having managed to save two American icons Boeing and Ford.Finally I will finish with a quote of Henry Ford "If you think you can and if you think you cant, you are always right"