It can be rare to hear a CEO admit that their company has made mistakes. Allan Mulally, CEO of Ford, has done just that.Speaking at the WSJ ECO:nomics conference in Santa Barbra, the Wall Street Journal reports Mulally acknowledging Ford products haven't always been the best. "We really have lost a generation," WSJ quotes him as saying, adding "In the past, Ford ‘did not have a consistency of purpose,' he said, but is now committed to producing vehicles that are ‘best in class.'"
And, in a surprising turnaround from the company who has made much of their living on the back of the F-150 pickup truck, WSJ says, "He reiterated that Ford's mix of vehicles will do a 180 in coming years, with light cars-rather than trucks and SUVs-representing two-thirds of the automaker's lineup, as rising energy prices make fuel-efficient cars a priority for consumers."
Mulally's comments come as many analysts see Ford avoiding the doom-and-gloom news affecting other domestic automakers. Forbes says, "The No. 2 U.S. automaker is so far navigating brilliantly through a very dangerous minefield while the fate of its U.S. competitors, General Motors and Chrysler, looks bleaker by the day." The Detroit Free Press says, "While GM and Chrysler quickly asked for bridge loans in order to keep operating, Ford -- thanks to a cash pile it built by borrowing back in 2006 before the credit crunch -- said it didn't need a rescue. At least not right away."
Yesterday's announcement that Ford will retire 40 percent of its debt, was, according Forbes, "shrewdly timed, coming on the eve of a crucial meeting Thursday between President Obama's auto industry task force and a committee representing GM's bondholders." While Ford has been taking steps to remove red ink from its books, Forbes also reports that the company was able "to strike a deal with the United Auto Workers union about how to pay for retiree health care. Ford's deal, allowing it to fund up to half its $13.2 billion future liability with stock instead of cash, is likely a model for GM, which is still locked in tough negotiations with the UAW."
The steps appear to be working, as Ford has begun to separate itself from GM and Chrysler's woes. University of Michigan Accounting professor Gregory Miller told the Free Press, "The financial crisis has allowed them to say, 'Quit lumping us together. There is no Big Three anymore. Look at us for what we are.'"
With sales still down, only time will tell if Ford's bold moves will continue to pay off - but is seems that some people think they will.
Even though it is doing better than other American automakers, Ford sales are still down and the company if offering incentives to reverse that trend.
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