Ford ceo alan mulally leads a global company with 166,000 employees.166,000 employees, annual sales of $121 billion and a bottom-line profit of $6.6 billion. But above all: mulally has saved the colos from seemingly certain bankruptcy. Now he wants to bring ford back into the top league of automakers.
"Ford is a growing company in a growing global automotive market", mulally shouted to investors at their meeting in new york on tuesday, showing them where he wants to go: sales are to increase by a whopping 50 percent to around 8 million by 2015. Mulally wants to make gains above all in the emerging markets of asia, where ford is currently weak. This is a challenge to the leading trio of toyota, general motors and volkswagen. The three car giants sell a good proportion of their vehicles there.
Last year, ford sold 5.3 million cars, placing it in the middle of the industry. In the meantime, even the up-and-coming south korean team hyundai. Last year, the world leaders were uncatchably far away: toyota sold 8.42 million cars, general motors 8.39 million and volkswagen 7.14 million vehicles.
Ford now wants to catch up with slimmed-down but cheaper cars for the billions of potential customers in the emerging markets. If anyone can pull off the feat, it’s company ceo mulally. Until he took over, ford was considered a lost cause. The model range was outdated, the quality was questionable, the plants were in urgent need of renovation, and the company was burdened with gigantic health care and pension costs. Year after year, the company was running up horrendous losses and more and more customers were turning away. The end seemed only a matter of time.
2006 marked the beginning of the turnaround. Bill ford, great-grandson of the company’s legendary founder henry ford, stepped down as ceo after five unsuccessful years. With mulally, not only did a manager from outside the family take the helm, he also had no knowledge of the industry at all. Mulally had spent 37 professional years with the aircraft manufacturer boeing – which was ultimately his salvation. Mulally set out to get ford back on track, regardless of old allegiances.
He eliminated tens of thousands of jobs, closed more than a dozen plants, and sold off a series of unprofitable subsidiaries, including the two british luxury brands jaguar and land rover and the swedish carmaker volvo. Dozens of high-ranking managers had to go. In order to get fresh money, mulally borrowed everything that still had any value, even the world-famous blue company logo. The head of the automotive industry put all his eggs in one basket: in his opinion, only a shrunken ford had any chance of survival.
In the end, ford was the only one of the three u.S. Car companies to survive the severe crisis in the industry in 2009 on its own. Now mulally believes the time is ripe to invest heavily in growth again. Because in the end, as the shrewd manager knows, high unit sales are the only way to keep up in the auto industry. Company founder and conveyor belt pioneer henry ford lets dig.