Driving Ford Back Onto Road To Success

CEO Alan Mulally Says Union Accord, Commitment To Quality Key; Gives Obama High Marks

(CBS)  If there's one city that's suffered mightily from the intense financial strain of the recession, it's Detroit.

And while General Motors and Chrysler have turned to the government for bailouts, one is doing so well that one Wall Street brokerage gave its stock a "buy" recommendation on Friday: Ford.

Early Show co-anchor Harry Smith sat down with Ford CEO Alan Mulally for an exclusive interview to discuss the company's apparent and relative success at weathering the economic storm battering his industry and the nation.

It was part one of a weeklong series, "Early Across America," looking stories of hope and optimism amid all the economic gloom sweeping the nation.

"If you're looking for that tiny glimmer of hope amid all the economic doom," says Smith, "the place to find it might be at the gleaming, green, state-of-the-art Ford truck plant in Dearborn, Mich. It has three shifts are working 24 four hours a day, seven days a week, turning out Ford F 150 pickup trucks.

"Every single truck has been spoken for," Smith continued. "A buyer or dealer wants it, which basically means it has a 'sold' sign on it"

"People care about this product," Ford worker Tommy Johnson told CBS News. "People care about their jobs. And we understand that the product we build is important to the rest of the country."

"There's no small amount of irony," Smith points out, "that part of the recovery of the U.S. auto industry will come from one of its most maligned products. But this isn't your pop's pick up: It gets more than 20 miles to the gallon, highway."

"Even in the most tough economic times," Mulally remarked to Smith, "we are there with a new product that people really want and they value."

Mulally became Ford CEO two-and-a-half years ago.

Among the first things he did was restructure the company's debt so, unlike the other U.S. automakers, Ford isn't looking for a government bailout.

"We didn't need taxpayer money; we had a really good plan," Mulally observes.

How long can Ford hang on in the current economic environment?

"Well, with what we see right now," Mulally responded, "we have a little bit of a cushion if the economy degrades even further. But ... we're assuming that all the actions that were taken, fiscal and monetary policy will result in starting to recover the second half of this year."

Mulally also sought to consolidate Ford's business. He sold off Jaguar and Volvo and Land Rover to concentrate on one thing: Ford.

“We had ended up in the place where we had a lot of brands. So we had Aston Martin and Jaguar and Land Rover and Volvo (see editor's note below) and Mazda so clearly, when you need to focus, you need to focus in the toughest of times. So one thing we came together on was let's focus on the Ford brand and we divested all those other brands”.

"What we decided," he said to Smith, "was that we're going to be in every market, we're going to go back to our roots and focus on Ford. ... We're going to have small, medium and large vehicles, cars, utilities and trucks. We also decided we're going to be best-in-class in quality and fuel efficiency and safety, and also offer the best value."

Then he went to work with the unions to make Ford more competitive. He swears his current agreement with the United Auto Workers makes Ford competitive with Japanese automakers who build cars in America. "We have aligned the wages to the real value," Mulally says, "all the work rule changes that we have made, that we now are competitive with our foreign competitors inside the U.S. and we can make cars inside the U.S. profitably, which is a tremendous development for the U.S. and also for Ford."

Ford made money in the '90s selling pickups and SUVs but, to survive in the future, Mulally is convinced there needs to be more: "We made a commitment that every vehicle, no matter what its size, whether it's a car, a Fiesta, a Focus, a Fusion, a Mustang, an Escape or an Explorer, all the way up to a 150, no matter what the vehicle size, every year we're going to improve the fuel efficiency and the quality and the safety, and then the American public can decide exactly what vehicle works for them."

In the meantime, he committed to improving mileage and quality.

But his biggest challenge may be persuading a generation of Americans that American cars are just as good as those from the foreign competition -- truly a case, Mulally says, of, "Have you driven a Ford lately?"

As for President Obama and his efforts to revive the economy: not a discouraging word. He says he gives the administration "a very high grade for moving decisively" to revive the economy.

Editor's Note: After the broadcast a spokesman for Volvo sent the following statement to CBS News. “Volvo has not been sold. Ford has put Volvo under strategic review. We are still owned by Ford Motor Company.”

[deliciadawn]

I am not blaming Ford CEO Alan Mulally because he has just been at Ford for 21/2 years. But I do expect him to pick up the pieces of the mess before he came into the CEO position. Hiring big law firms to torture families that have lost so much, is hardly what I would call heroic and as far as his comment "Have you driven a Ford lately?" it raises my blood pressure just thinking about it. The answer is yes, My son was burned to death driving a Lincoln ,that had a defective switch. It has been 27 months since he was burned beyond recognition, not a day goes by that I don't regret buying that car. And as far as the American consumer, they should be very afraid of Ford Motor Company, because they have treated me and my family with utter disgrace. Alan Mulally has time to smile on every TV show, but forgets the loyal customers that children died over a defective $20 switch. A admiral American Company would have taken care of our family, and replaced my car. What does a 22 year old young man go for these days? please tell me? What is my son's ashes worth?
What are my tears worth?
When will you companies learn, this is why you're in the economic shape your in, poor customer service. People talk, and the internet is great for getting the truth out, all the law firms, and Scott Monty's can't contain 1,000's of UN -satisfied customers. Our bring the ones that have died back to life.
Hey, Alan how about a bridge loan? I need a car mine kinda burned up.

[jxknowles]

My grandfathers owned Ford dealerships, but my father only drove Oldsmobiles, then Hondas, then Toyotas. Later this month, I'll probably be buying the first Ford in the family for many years. Old Henry might be proud of the rebound.

[mecanik-2009]

Why does everything cost more then I paid for my first house. I wish they would build a version of the Tata Nano. I only need a basic car.

[walt1944]

Myn former employer, a subcontractor for Ford Motor Company will be especially pleased that there are "movements" to bring Ford back on the "profitable track".

Of course, that doesn't help the dozen administrative staff, including me, that were let go a month ago, and while it may help those factory employees who suddenly found their weekly hours cut down from 40 hours, to 32, it is a certainty that it WILL HELP the corporate executives who stood to get a larger piece of the pension trust earnings, and whatever "retention bonuses" will be showered on them for a job "WELL DONE!"

Its just corporate business at work, and the average employee be D-A-M-N-E-D!!!!!!

HAIL OBAMA!!!!

[jostice007]

Great to see Ford doing well to some degree.I just wish GM can do likewise. However, please do not get ahead of yourselves. When exactly did American vehicle makers started to make as good as or better vehicles as the major foreign manufacturers? Please don't let your hatred for all things and people foreign cloud your judgment. People are not buying foreign cars because they are unpatriotic. It is because on average they are better cars period.

[TPS2]

Buying American sounds great; however many American autos have at least some foreign made parts. I bought a Ford Taurus several years ago and I noticed Japanese writing on the engine. The engine was made in Japan by Mazda. Ford partnered with Mazda and GM with Toyota etc. So the argument that American cars are not as reliable as imports, is sort of an oxymoron. Many foreign vehicles have parts from other manufacturers as well, so it is all relative. Anyway it is good news to hear about an American company making a profit. Go Ford!

[obama4king]

I've got to tell you, I was the last person in the world that would look at Ford.

Alan M. has changed all that. So has Ford's ability to run their business without the GM handout mentality. My next car shopping trip will start with Ford. It's their business to lose from here. No more Honda's, Mazda's or Toyota's for me.

Buying American 100%. Buying Ford 200%.

[bsayk]

I have a 2000 Toyota Solara V6 with manual tranny and 2005 Tacoma V6 with 6 speed manual. They are as American as Ford or Chevy. They may be a Japanese name plate but build here in the US of A. Good chunks of US name plates are made in Mexico.

[theystink]

I purchased a 2009 F150 about three months ago and I LOVE it. I'm getting almost 21 mpg on the highway. I traded in a 2004 that had the same 5.4 engine but let me tell you this '09 has unbelievable more get up and go. The frame has really been beefed up and it has a five star crash rating. My wife loves the step up engate.

[j_flood]

I drive a '91 VW Golf ---- 226,000 miles ---- no major equipment failures or replacements. New timing belt every 60K, oil every 3K ---- that's my story and I'm sticking to it!

BTW --- rock on Ford - only 'smartly' managed company in Detroit - took a plan and stuck to it - Billy was right to go outside the industry for a CEO....well done Billy

[Three-Fifty-Seven]

fedup12

My Ford 250 has over 250,000 miles on and still runs well -- not may beammers make that kind of milage.

[threefords]

We currently drive an '89 F 150, a '94 F 150, and a 2004 F-150. The older ones have well over 150,000 miles on them and despite squeaks, groans and occasional repair, are still reliable and absolutely useful. We applaud Ford for not asking for Federal funds, and
for manufacturing a long-life product, a rarity these days.

[majorbball]

I wish someone would take time to talk to my husband about his F 150. Factory warranty engine, they refuse to honor. I do not call that good business practice.

[cdegolier]

My husband and I own 2 Fords, 1999 F150 and a 2007 Edge. Great vehicles. My brother in law has a 1971 Ford pickup, 1965 mustang, 1970? crew cab Ford & 199? Harley Davidson Addition F150. All running great and never had a problem with them.

[mecury69]

"Buy a Ford. Support self sufficiency and good business practices.
Posted by sandy19731 at 8:25 AM : Mar 23, 2009"

Here, here.

The others should go under and Ford gets the spoils. That's the way business is supposed to work.

Why do we prop up the failures?

[fedup12]

I drive a BMW I bought new in 1992. How may 1992 fords are still on the road?
Posted by mjvwsr at 9:03 AM : Mar 23, 2009

ALOT and I own one. A 91 F-150.

I have just delegated it to haulin stuff on weekends but it starts every time.

[txlakeside]

Way more 92 Fords on the road than BMW's because they are cheaper to, buy, maintain and repair. In fact if you pay attention there are thousands of "old" Fords still plowing along! But if you drive a 92 BMW you are probably one of the idiots driving with your cell phone glued to your ear and notice little around you!

[lovegetpeace]

I drive a BMW I bought new in 1992. How may 1992 fords are still on the road?
Posted by mjvwsr at 9:03 AM : Mar 23, 2009

All of the brands and models of cars are of the highest quality. None are bad - foreign and domestic.

The only bad ones are the Owner for not maintaining them. For example, the owner's manual say to change the oil every 8K to 10K miles. I change my oil every 2K-3K because oil is nolonger oil (lost most of it good properties) after that many miles of heat.

[koko98-2009]

You would think that after they killed their electric car Karma would punish Ford. But that has not happened. Now when are going to build an electric Probe? I would buy one.

[mjvwsr]

I drive a BMW I bought new in 1992. How may 1992 fords are still on the road?