Wednesday, April 23, 2008

Ford's recovery gaining traction

Against all odds, Alan Mulally pushes cultural change on all fronts to move carmaker to profitability

Thank God.

Like an itiot, I've held on to some Ford stock that I bought in 2003 for about $10 a share. I still think the company will take off again which is why I'm holding, but so far it's been 5 freakin' years in purgatory!

The share price might bump to $8 on this news woohoo.

In the year and a half that he has been at the helm, Ford chief executive Alan Mulally has downsized Ford's North American operations and negotiated a game-changing contract with the United Auto Workers, notes the Detroit News. He is selling off what he calls "non-core assets" like Jaguar and Land Rover and has mortgaged much of what is left to secure what he calls "the largest home loan in history" to pay for it all. He has assembled a global leadership team, outlined his vision for integrating Ford's global operations and is leading a cultural transformation that is shattering the old ways of doing business at Ford.

I wonder how much Ford stock Mulally owns.
It has to be disclosed somewhere.

There is a growing sense of optimism in Dearborn. There are the impressive quality gains the automaker has achieved, despite one of the most painful downsizings in its 104-year history. There are the customers Ford is reclaiming in key markets like California, and the new products it is preparing to launch later this year.

Ford insiders also point to the smaller victories being won at every level of the company: a few dollars shaved from the cost of a new truck by using common components, a few days cut from the development time of a new crossover by virtual manufacturing analysis, a few million saved by new work rules approved by union members at an assembly plant.

The financial reports Ford releases April 24 will likely reveal the company's sixth consecutive year-over-year improvement.

Wall Street has taken notice. Ford's rising share price has given the automaker a market capitalization far larger than its cross-town rival, General Motors, and Ford watchers increasingly give the company credit for unloading brands and crafting more creative deals with the UAW than its competition.

Mr. Mulally's insistence on teamwork is only part of what is driving this new spirit of cooperation at the top. Ford executives may believe in his turnaround plan, but they also know it is likely the last chance Ford has to get it right.


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