Biker16 Posted November 5, 2007 Share Posted November 5, 2007 Mulally: Ford races the clock In tough times, will the turnaround succeed? The CEO says he doesn't know Amy Wilson Automotive News November 5, 2007 - 12:01 am ET DETROIT — Alan Mulally says Ford Motor Co. is in a "race against the clock," and he has no idea whether Ford will win. In a startlingly candid comment, Mulally revealed uncertainty about the outcome of the struggling automaker's bid to turn itself around. But the CEO reaffirmed his confidence that Ford is executing the right strategy to fix itself. Last December, Mulally made his first big move by mortgaging almost all of Ford's assets in a $23.4 billion financing package. The big question: Will Ford's burning of cash reverse itself before the money runs out? Mulally arrived at Ford 14 months ago from Boeing Inc., where he led a turnaround of the commercial airplane division. Mulally, 62, told Automotive News that he is commonly asked, "Now that you've been here for a year, is it going to be OK?" His answer: "Don't know — race against the clock. Are we working on the right things? Absolutely. I've been there. I've seen this movie. I performed well in it. I know exactly what to do. Do we have enough time? No idea." But Mulally says he can't worry about running out of time. "The more you worry about worr....... http://autonews.com/apps/pbcs.dll/article?...050362/1021/TOC Mulally pushes to transform Ford Peter Brown and Amy Wilson Automotive News November 5, 2007 - 12:01 am EST CLICK BELOW FOR MORE: >> Talk from the Top Index Strategies for Auto Manufacturing Leaders advertising Corporate Ethics and Anti-fraud The Russian Automotive Market Industry Overview The Central and Eastern European Automotive Market: Industry Overview Practical Solutions for the Automotive Industry Five Mega Trends Facing the Global Auto Industry See all articles Fourteen months after leaving Boeing for the top job at Ford Motor Co., Alan Mulally still has a lot of work to do. He has arranged a loan package worth $23.4 billion, put Jaguar and Land Rover up for sale and Volvo up for review, and last month snatched marketing star Jim Farley from Toyota. But U.S. sales continue to fall, and Ford Motor expects more financial losses this year and in 2008. Getting back on customer consideration lists remains Ford's biggest challenge, the CEO says. Mulally, 62, spoke with Editorial Director Peter Brown and Staff Reporter Amy Wilson. How would you assess where Ford is today compared with when you stepped in here? We together are ahead of where I thought we'd be. The good thing is that the Ford team had recognized the situation and had put plans in place to deal with that reality. I helped accelerate many of those plans. The things we came together on were to aggressively restructure to operate at the current demand and (with the market's) changing model mix and get back to profitability. And then accelerate the development of the new cars and trucks. And then the third part was the financing of the whole plan. We went to the markets at the right time with a solid plan. They responded really well. Our liquidity is good. The thing I'm really pleased about is under the guise of working together — our dealers, Ford, the UAW, our suppliers, the bankers, investors, everybody pulling together around this plan. With respect to that, I think we're a year or more ahead of where I thought we'd be. It's a huge cultural change. And this is a big transformation. Is your product pipeline where you want to see it? You always want it to be faster, but is the future looking satisfactory? I'm really encouraged with not only the pace and the discipline of the cycle plan but also the productivity with which we're doing it. (Product chief) Derrick (Kuzak) and the team are using our global resources. We'll have a new B-car to complement the Focus. This is just a complete enhanced, new-product portfolio in the small and medium-sized cars for Ford. Are you going to go outside to replace Cisco Codina as head of North American marketing, sales and service? We're going to look at all of o..... http://www.autonews.com/apps/pbcs.dll/arti.../711050330/1178 Quote Link to comment Share on other sites More sharing options...
P71_CrownVic Posted November 5, 2007 Share Posted November 5, 2007 DETROIT — Alan Mulally says Ford Motor Co. is in a "race against the clock," and he has no idea whether Ford will win. There is the confident CEO that Ford needs. Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 5, 2007 Share Posted November 5, 2007 There is the confident CEO that Ford needs. Or it's the PR savvy CEO that knows better than to say Ford is in great shape when he needs a contract ratified. Quote Link to comment Share on other sites More sharing options...
focus05 Posted November 5, 2007 Share Posted November 5, 2007 The irony is that they haven't been actually burning cash so far this year (although we'll see in Q3 - that should have changed). Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 5, 2007 Share Posted November 5, 2007 The irony is that they haven't been actually burning cash so far this year (although we'll see in Q3 - that should have changed). They probably borrowed $20B and invested it all in oil for a nice 40% return so far this year. Quote Link to comment Share on other sites More sharing options...
matthewq4b Posted November 5, 2007 Share Posted November 5, 2007 They probably borrowed $20B and invested it all in oil for a nice 40% return so far this year. LMAO They proboly would have gotten a better return on it if they had done that. Matthew Quote Link to comment Share on other sites More sharing options...
LincolnV Posted November 5, 2007 Share Posted November 5, 2007 Or it's the PR savvy CEO that knows better than to say Ford is in great shape when he needs a contract ratified. That is a good point..... Quote Link to comment Share on other sites More sharing options...
bolita Posted November 5, 2007 Share Posted November 5, 2007 Im with the PR savy CEO remark... 3rd quarter results are due this week anyway, right? Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 5, 2007 Share Posted November 5, 2007 Im with the PR savy CEO remark... 3rd quarter results are due this week anyway, right? Nov 8th. Calling it right now, Ford will break $10 before the end of January. The contract looks great and I believe results are ahead of schedule. Quote Link to comment Share on other sites More sharing options...
TStag Posted November 6, 2007 Share Posted November 6, 2007 There is the confident CEO that Ford needs. A CEO should always claim the glass is half full because it undermines consumer confidence and encourages suppliers to make credit facilities tighter. I find Mullaly's comments disturbing. There is a lot to feel positive about. Ford has cars in the pipeline and is reducing it's overheads. The only reason to worry would come if Ford no longer believe's it can survive all the way through 2008. My question around the sale of JLR has always been more about whether Ford is selling because it needs the money to survive than whether it see no future for JLR. I think Mullaly's comments point towards a future that is touch and go. 2 million Americans getting their homes repossessed may also worry him.... Quote Link to comment Share on other sites More sharing options...
ManFord Posted November 6, 2007 Share Posted November 6, 2007 Perhaps his statements have something to do with the '09 profitability mark. Thinking they might need more time...Idk. Besides the only thing he expressed doubt about was time...which is what everyone is saying. He said that Ford is making progress and is on the right track, just that time is the enemy....especially since Ford set its own profitability mark for '09. Quote Link to comment Share on other sites More sharing options...
Pioneer Posted November 6, 2007 Share Posted November 6, 2007 My question around the sale of JLR has always been more about whether Ford is selling because it needs the money to survive than whether it see no future for JLR. I would say it's a little bit of both. Quote Link to comment Share on other sites More sharing options...
ManFord Posted November 6, 2007 Share Posted November 6, 2007 I would say it's a little bit of both. Or that it sees no future for JLR in the Ford company...given that Mullaly has said many times that the focus is on the Ford brand. JLR are IMO distractions from the core brand that need attention and money constantly, maybe not so much LR. But idk.... Quote Link to comment Share on other sites More sharing options...
Pioneer Posted November 6, 2007 Share Posted November 6, 2007 LR, just like Jag, is a money pit. Unless the new owners can develop products that demand a lot higher transaction prices, they will always be a drain on whomever takes it over. Just like how they have been with Ford. Quote Link to comment Share on other sites More sharing options...
ManFord Posted November 6, 2007 Share Posted November 6, 2007 LR, just like Jag, is a money pit. Unless the new owners can develop products that demand a lot higher transaction prices, they will always be a drain on whomever takes it over. Just like how they have been with Ford. Exactly, you put it better than I ever could... Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 6, 2007 Share Posted November 6, 2007 Does CAFE legislation affect Land Rover at all? None of those SUVs are exactly fuel efficient. It's possible the cost to make LR new CAFE compliant isn't worth investing. Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted November 6, 2007 Share Posted November 6, 2007 A CEO should always claim the glass is half full because it undermines consumer confidence and encourages suppliers to make credit facilities tighter. I find Mullaly's comments disturbing. There is a lot to feel positive about. Ford has cars in the pipeline and is reducing it's overheads. The only reason to worry would come if Ford no longer believe's it can survive all the way through 2008. My question around the sale of JLR has always been more about whether Ford is selling because it needs the money to survive than whether it see no future for JLR. I think Mullaly's comments point towards a future that is touch and go. 2 million Americans getting their homes repossessed may also worry him.... The big financial companies in this country are in BIG trouble right now and it's very disturbing to say the least. And bottom has not been hit yet and no one seems to know how much worse this subprime mess will get. What is most worrisome is the plummeting of home prices. When your adjustable resets, and you cannot refinance because your house is worth less than original loan, many default on loan. There really is no end in sight. Some are saying Citigroup may have to come up with $30 billion to offset the losses. And that is just ONE company. Merrill Lynch is in big trouble and many have most of their net worth with big brokerage houses including myself. Most of us don't keep most of our money in our mattresses, and when the big banks go belly up, we all go down with the ship. This is starting to turn into another big debacle with many going to jail and billons wiped out like with tech mess in 2000, only probably worse because it involves major banks that have all our money. The Feds lowering interest rates is not going to increase home values. That will take time and until then big financial stocks are headed down. Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 6, 2007 Share Posted November 6, 2007 The big financial companies in this country are in BIG trouble right now and it's very disturbing to say the least. And bottom has not been hit yet and no one seems to know how much worse this subprime mess will get. What is most worrisome is the plummeting of home prices. When your adjustable resets, and you cannot refinance because your house is worth less than original loan, many default on loan. There really is no end in sight. Some are saying Citigroup may have to come up with $30 billion to offset the losses. And that is just ONE company. Merrill Lynch is in big trouble and many have most of their net worth with big brokerage houses including myself. Most of us don't keep most of our money in our mattresses, and when the big banks go belly up, we all go down with the ship. This is starting to turn into another big debacle with many going to jail and billons wiped out like with tech mess in 2000, only probably worse because it involves major banks that have all our money. The Feds lowering interest rates is not going to increase home values. That will take time and until then big financial stocks are headed down. Citi paid $10B in dividends in 2006. That's in addition to $10+ billion in profit. The banks aren't in trouble. They just want to get bailed out so they don't have to take 2 years of losses with no dividend payment. By the way, Citi has $2.4 TRILLION in assets worldwide. $30 billion is nothing. In my opinion they should have to take all these losses on their own. They made this mess by creating the CDO market and pushing for more and more mortgages to be made. Their failure to accurately price risk should not be passed on to anyone other than their own shareholders and consequently the management that made the decision. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted November 6, 2007 Share Posted November 6, 2007 Does CAFE legislation affect Land Rover at all? None of those SUVs are exactly fuel efficient. It's possible the cost to make LR new CAFE compliant isn't worth investing. Yes and the new CO2 regulations being imposed in Europe are going to hit SUVs the hardest. Everyone knows Ford is selling J/LR to avoid this bear pit and get cash for VEBA. Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 6, 2007 Share Posted November 6, 2007 Yes and the new CO2 regulations being imposed in Europe are going to hit SUVs the hardest.Everyone knows Ford is selling J/LR to avoid this bear pit and get cash for VEBA. Apparently everyone doesn't know this if people still pine to keep JLR. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted November 6, 2007 Share Posted November 6, 2007 Apparently everyone doesn't know this if people still pine to keep JLR. So long as it's remains apparent and not self-evident I'm happy. Quote Link to comment Share on other sites More sharing options...
7Mary3 Posted November 6, 2007 Share Posted November 6, 2007 FWIW, Rick Wagoner had no doubt GM would pull through, even during the summer of 2005. They are certainly not out of the woods yet, but are far more comfortable than Ford is right now. Quote Link to comment Share on other sites More sharing options...
ShockFX Posted November 6, 2007 Share Posted November 6, 2007 FWIW, Rick Wagoner had no doubt GM would pull through, even during the summer of 2005. They are certainly not out of the woods yet, but are far more comfortable than Ford is right now. Prove GM is more comfortable than Ford. I'm sick of hearing how great GM is doing with no objective analysis. Ford still owns their credit arm, can GM say that? Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted November 6, 2007 Share Posted November 6, 2007 Prove GM is more comfortable than Ford. I'm sick of hearing how great GM is doing with no objective analysis. Ford still owns their credit arm, can GM say that? I don't get that either. Ford made as much money last quarter as GM. GM also still has big stake in GMAC which is now bleeding money with subprime debacle that will impact GM's earnings. And GM has less cash on hand than Ford and put more money into VEBA than Ford and will have to put more in later too. GM is also cutting shifts all over the place which will further impact profits here. Not pretty no matter how you look at it. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted November 6, 2007 Share Posted November 6, 2007 Their failure to accurately price risk should not be passed on to anyone other than their own shareholders and consequently the management that made the decision. Ah the murkiness of SPEs and securitized debt. I remember the scrutiny Fannie and Freddie were getting a few years ago due to their fast-n-loose risk assessment based on the assumption that the gov't would bail them out. More of the same here. Risk management doesn't work when management only hears what they want to hear. Quote Link to comment Share on other sites More sharing options...
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