Alan Mulally, Ford’s chief, with clay models of various Ford cars. He says buyers worldwide look for the same qualities.
HE blew into the Ford Motor Company in 2006 as an outsider from a different industry, and he was hailed as the latest in a long line of purported saviors of a faltering, century-old automotive icon.
At the time, skeptics in the clubby world of auto executives whispered that the newcomer, Alan R. Mulally, would be swallowed up by the complexities of the car business, his ebullient personality smothered by the feudal infighting for which Ford had long been famous.
Yet three years into his tenure as chief executive — and with a host of still nettlesome challenges awaiting him — Mr. Mulally has thus far proved to be the unifying figure that Ford has needed for decades.
His vision is distilled in the laminated, wallet-size cards carried by tens of thousands of Ford employees that spell out his management principles beneath a simple heading: “One Ford ... One Team ... One Plan ... One Goal.” And on Monday, at the opening press conference of the 2010 Detroit auto show, Mr. Mulally will unveil the car that embodies his strategy for returning Ford to its status as a leader in the global auto industry.
That car, the new Ford Focus, is arguably as important to Mr. Mulally as the Model T was to Henry Ford, the founder. Despite some previous efforts, the Focus is Ford’s first truly global car — a single vehicle designed and engineered for customers in every region of the world and sold under one name. It is small, fuel-efficient and packed with technology and safety features that, Mr. Mulally believes, will appeal to consumers in Europe, Asia and the Americas.
The car also represents what Mr. Mulally calls the “proof point” of everything he has done since joining Ford after a 37-year career with Boeing: he hopes that the vehicle will provide a rolling blueprint for generations of Ford cars to come.
“If we were going to be world-class, we needed to pull together and leverage and use our global assets around the world to create a powerhouse ‘One Ford,’ ” he said in an interview in his office at Ford’s headquarters. “It’s exactly why we are here.”
In an industry populated by naysayers and familiar with wrenching disappointment, Mr. Mulally’s doubters have largely disappeared because he has already delivered more than what was expected of him when he replaced Ford’s chairman, William C. Ford Jr., as chief executive.
One of Mr. Mulally’s first, prescient acts in 2006 was to borrow $24 billion, which later gave Ford the cash it needed to stave off the government-sponsored bankruptcies of its crosstown rivals General Motors and Chrysler. He has also shifted Ford’s emphasis away from trucks and sport utility vehicles to cars and crossover vehicles, and dumped luxury brands like Land Rover, Jaguar and Aston-Martin that were consuming Ford’s resources and distracting management.
Perhaps most important, Ford has shrunk drastically, shedding jobs and factories to better align its production with demand. For decades, Ford executives and workers labored inside a bureaucracy that made decision-making cumbersome and often undermined dexterous responses to market shifts. It was a system that also withstood repeated efforts by others to streamline it.
But under Mr. Mulally’s hand — and in response to a downturn that threatened the very existence of Detroit’s Big Three — Ford has finally started to run a tighter ship.
All of this is beginning to show up in Ford’s bottom line. It reported $1 billion in earnings in the third quarter of 2009, its first profitable quarter in nearly two years. Mr. Mulally, however, says he doesn’t expect Ford to become “consistently” profitable until 2011. (Coincidentally, that’s when the new Focus will begin appearing in sizable volumes in the United States and Europe.)
While the Focus is only one of several new products on the way, it is the centerpiece of Ford’s transformation from a truck-heavy manufacturer to a producer of smaller, lighter and more environmentally friendly passenger cars.
The impact of the Focus on Ford’s global operations is even more significant. While Ford has been an international company since early in the 20th century, its overseas divisions have long operated as semiautonomous units geared to individual markets.
In the 1990s, Alexander Trotman, then its chief executive, developed a plan called Ford 2000 to standardize some vehicles around the world. The new system saved money, but the products it yielded were successes in some markets and flops in others. The initiative was summarily dropped by Mr. Trotman’s successor, Jacques A. Nasser.
Upon his arrival, Mr. Mulally took his own shot at knitting together Ford’s far-flung operations, seeking the economies of scale that a “world car” could bring.
“Why are we doing it this way?” he asks. “Because we believe the customer requirements are going to be more the same around the world than they are different.”
INDUSTRY analysts have long derided Detroit automakers as being overly fixated on the United States market and unable to see how vehicles designed for Europeans and Asians could appeal to American consumers.
“There’s nothing revolutionary about selling the same car around the world,” says John Casesa, an industry consultant. “Toyota does it. BMW does it. But the Detroit companies were always disproportionately run around their North American strategy.”
In that regard, the Focus is Ford’s first big bet that it can effectively sell a single, largely uniform car — with variations to come later — in several global markets. Currently, the company has three engineering “platforms” serving what the industry calls the C-car segment — essentially, compact vehicles the size of a Toyota Corolla or a Honda Civic. The three platforms account for annual sales of about 1.1 million vehicles, although the various models are substantially different inside and out.
The new Focus is built on one platform for all markets, from Shanghai to Seville to Seattle. The platform is also flexible enough that it can be adapted for different body styles, whether hatchbacks or small crossover vehicles.
Within a few years, Ford expects to sell as many as two million vehicles a year off the new C-car platform and to save billions of dollars in costs by avoiding multiple platforms.
“The Focus represents the first tangible evidence of a global strategy,” says Mr. Casesa. “For the first time, Ford is executing it and not just talking about it.”
A YOUTHFUL-LOOKING 64-year-old with close-cropped red hair and a toothy smile, Mr. Mulally is relentlessly optimistic and perpetually in motion. Educated in engineering at the University of Kansas, a father of five and married for nearly 40 years, he can be so exuberant that he’ll sometimes hug people the first time he meets them.
But Ford executives quickly learned that beneath that sunny disposition was a demanding and competitive executive.
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