“Ford has a better idea” was the auto company’s ad slogan in the late-1960s.
My father felt this way long before that. He bought our family’s first car, a 1951 Ford which lasted forever, or at least until he acquired a third-generation, Country Squire full-size station wagon, a “woody” big enough for eight passengers, and powerful enough to haul my mother, me, and my four siblings to the 1964 World’s Fair in New York from St. Louis. Even loaded down with kids, luggage, coolers, etc., that thing could really haul, well, cargo. Gas was pretty cheap back then.
The iconic American auto manufacturer has seen many ups and downs in the intervening years, but it has now become its own better idea. Last week Ford Motor Company reported its fourth profitable quarter in a row, a big turnaround from a loss of $1.4 billion a year ago. It beat expectations with a $2.1 billion profit, reflecting a rising tide for the entire auto industry as well as its own successful reinvention as America’s only truly free enterprise automobile company.
According to Matthew Dolan and Jeff Bennett, writing in the Wall Street Journal, Ford increased North American production by 30,000 vehicles during the second quarter which will yield an output of 625,000 cars and pickup trucks, a 39 percent improvement over the same period last year.
“Ford made money in each region of the world where it sells cars and trucks,” said Dolan and Bennett. The company earned 46 cents a share, beating the average analyst estimate of 31 cents as found in a survey by Thomson Reuters.
While the overall data is impressive, even more so is the quality of the products Ford is putting on the road these days. Its technologically impressive Ford Fusion is the 2010 Motor Trend Car of the Year.
The new, improved Taurus is back with a 3.5L Ecoboost™ V6 engine, looking good and transforming this once moth-balled brand into something very stylish and contemporary.
The company is now implementing global platforms for its business, applicable to markets throughout the world, with the re-introduction of the 2011 Ford Fiesta from Europe. Born 1976, this subcompact was brought to North America in 1978 but was discontinued in 1980 despite the fact that approximately 12 million were sold overseas.
Reviewing this sixth-generation Fiesta in the Washington Post, Warren Brown said that Ford “kicks tailpipe and takes names” with this new offering.
“Mine is not irrational exuberance. I am not saying that this new Fiesta will somehow roll over the Mini Cooper or best other hot little numbers on their way from Germany, South Korea and Japan,” says Brown. “I am saying that, for the first time in 30 years, Ford has become a genuine contender, a potential champion, in the small-car fights in its home market.”
And, yes, Ford still excels with its best-selling F-150 pickup truck.
Certainly, part of the thrill stems from the fact that Ford accomplished this feat without government subsidies, which were lavished on General Motors and Chrysler-Fiat. This is due, largely, to the leadership of Alan Mulally, the auto maker’s CEO and “Renaissance Man.”
Mulally, an engineer by training, but hardly a traditional “car guy,” came to Ford from Boeing almost four years ago when “Ford seemed on death’s door,” writes Paul Ingrassia, the Pulitzer Prize winner and expert writer on the automotive industry.
“But last year  Ford became the only U.S. car company to avoid bankruptcy, and actually posted a $2.7 billion profit.”
As the Economist reported (“Rinsed and raring to go,” November 7, 2009), “Ford struggled on, completing its restructuring without help from either the taxpayer or bankruptcy, thanks to the $23.6 billion it had raised in 2006, before the credit markets froze, by pledging all its North American assets as collateral.” This may be one of the greatest examples of “going all in,” this time with a happy ending at least for now.
Ford will have to manage its debt reduction without the benefit of Uncle Sugar to bail it out. But give Mulally credit for making a gutsy play and maintaining Ford as a private enterprise.
Kudos, too, to William Clay (“Bill”) Ford, Jr., great-grandson of Henry and former President, CEO and COO of the company, who brought in Mulally and stepped aside to let him take on those roles for the benefit of the family, the company and, if I may say so, for the country.
In February this year, Ford Motor Company surpassed General Motors in sales for the first time in at least fifty years.
Within hours after the release of these sales results, GM announced its second executive reshuffling in three months. Competition is alive and well amongst and between the domestic auto companies even if the federal government has put its heavy finger on the scales to the benefit of Ford’s rivals.
All three American auto companies are benefiting from a rising tide. One hopes that GM and Chrysler-Fiat become profitable and pay back all the taxpayers’ dollars poured into them, including over $50 billion that GM still owes if you include the stock owned by the government. This may be a pipe dream, but one can hope can’t one?
But wouldn’t we have all been better off if the other car companies had taken Ford’s better idea to heart and avoided this in the first place?