Exclusive Interview with Ford CEO Alan Mulally (Detroit is back Series)

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Alan Mulally, President and Chief Executive Officer of the Ford Motor Company, answers a question posed by an audience member during a Q & A session at the annual Center for Automotive Research's Management Briefing Seminar at the Grand Traverse Resort and Spa, in Acme, MI. on Wednesday, August 8, 2007. (Photo by John Russell/Ford Motor Company) (08/08/07)
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An affable CEO, who made his name with his superb leadership at airplane manufacturer, Boeing, Alan Mulally fundamentally changed the trajectory of Ford and saved the iconic brand in probably the most tumultuous stage in its history. By the time Alan Mulally took the reigns of Ford in 2006, the seeds of the industry collapse of 2008 were already sown and a plan was developed to divest of the numerous brands under the Ford umbrella. The focus on rebuilding the value of the oval and instilling a new confidence in the rank and file were key to the role Alan would assume as CEO.

 

The task at hand was voluminous but with his steady stewardship Alan steered the legacy of Henry Ford. With an overreaching vision of “The Blue Oval” Henry Ford is probably the most renowned automotive entrepreneurs in history. A former race car driver, his first foray into manufacturing the Henry Ford Company didn’t flourish as planned and eventually became Cadillac under the help of Lincoln Founder, Henry Leland. Striking a partnership with the Dodge Brothers to provide parts and an initial investment, Henry Ford created Ford Motor Company in 1903 and the definitive success came with the introduction of the Model T in 1914 and the underlying concept of workers to be able to afford the products they make has shaped the foundation of entrepreneurship in America. Henry Ford understood the concept of affordable value and Alan Mulally’s vision was to restore that concept to the blue oval and in so doing, turn around the balance sheet and project strength for the company moving forward. The entire premier automotive group was disbanded with sales of Volvo, Aston Martin, Jaguar, and Land Rover, providing billions of dollars to the coffers of Ford. A huge bet on the oval itself brought several billions more in the forms of $ 23.6 billion in additional available capital for development of new powertrains and vehicle technology. Ford didn’t have the same capital needs of the other Big Three as a result of the leadership of Alan Mulally. Ford was still able to take advantage of a 5.9 billion Department of Energy loan for new fuel-efficient technology which manifested itself in things like EcoBoost, a series of fuel efficient powertrains that yield high power from smaller displacement engines. The program, the Department of Energy Advanced Technology Vehicles Manufacturing Loan Program, was created in 2008 with a fund of $25 billion authorized under section 136 of the Energy Independence and Security Act of 2007, to reduce dependence on foreign oil. Ford has retooled 11 factories in 5 states  Illinois, Kentucky, Michigan, Missouri, and Ohio which impacted over 33,000 jobs from the funds. Ford also has several advanced electric vehicles and an innovative in-car entertainment and voice command system, SYNC and My Ford Touch which focus the attention on perfecting the consumer experience with the Ford brand. With the elimination of Mercury, only the luxury brand, Lincoln, remains. Ford has since repaid its $23.5 billion loan in September 2011 and in May 22nd 2012 Moody returned Ford to an investment grade and restored the Blue Oval back. On May 22nd Alan stated “We are so proud of today’s decision by Moody’s and the resulting release of all collateral – particularly the Ford Blue Oval. This is an important milestone and further proof that, by staying laser-focused on our One Ford plan, the Ford team can deliver great products, build a strong business and contribute to a better world even through the most challenging external environment.”

 

I had the distinct pleasure of speaking with CEO, Alan Mulally about everything Ford. Our conversation is as follows.

 

 

 

OI: So Alan first of all, real great job you guys are doing here at Ford. You finally divested yourself of all your other brands. So kind of give us an idea of now this One Drive, this one vision, the cohesion of the Ford brand moving forward now that you can fully focus on the oval and the Lincoln brand.

 

AM: I think you should be the President and the CEO of Ford. (Jokingly). I could not have said that better…Now just think of what you described. Four years ago we found our compelling vision in Henry Ford’s original vision premiering January 24, 1925. He said, “open up the highways to all mankind,” focus on the Ford brand, a complete family of Ford vehicles – small, medium, large cars, utilities, and trucks – every vehicle best in class – quality, fuel efficiency, safety, smart design and then have scale so that you can get the costs down and make it the most affordable than any other automobile company and that has now liberated Ford. Everybody knows. The customers know what Ford stands for. The employees know. The suppliers know. They all know we’re making the best family of vehicles in the world all under Ford.

 

OI: Now you guys have been pretty aggressive with technology, right? You brought the Sync technology out to marketplace. You were the first to be able to now integrate voice texting, right? You guys are now integrating a WI-Fi hotspot, right? So you guys have the WI-Fi hotspot. Talk about that, your vision on bringing technology and you’re coming in from Boeing so you’re coming from aeronautics technology, right.

 

AM: Cockpit.

 

OI: Yeah.

 

AM: Pilot.

 

OI: Yes.

 

AM: Knowing everything.

 

OI: There you go.

 

AM: …the broadness of it…

 

OI: So kind of give us a little insight to that ’cause you brought a new dynamic that was different from other manufacturers and it won and it stuck.

 

AM: Well, this is a very neat thing about the Ford plan because as you described, in commercial airplanes the most important thing is that the pilot knows all of the situation – knows the situation in the health of the airplane, knows everything outside the airplane and so what we have done is we’re bringing that same approach to the driver to help you and I be the very best driver we can be so what we have found is that if you keep your hands on the wheel and your eyes on the road, that you are…really a terrific driver. Now, so what we’re doing is we’re using Sync My Ford, so voice-activated, seamlessly connected to the internet, all the apps but everything on five-position controllers just like our consumer electronics so you’re doing everything that you need to do about the vehicle and everything about the situational awareness, the safety features, the closure rates, the blind spot monitoring, the car is giving you all this information in an organized way so you know what to do to be a better driver.

 

OI: Now, another cool feature I saw was the ambiance, right? So you could have purple. You could have blue. Whose concept was that or how did you think of, okay, let’s think of how the customer is in our product. Let’s kind of integrate an ambiance, an environment to their driving. How did that come into play?

 

AM: Well, we’re really a technology company. We provide solutions to the consumer. So once you decide – have a point of view about what the consumer values – do they value quality, fuel-efficiency, safety, a really smart design – designs that make them feel good, make them a better driver, they love the driving experience and all of a sudden you’re using all the technologies available and your innovation to try to exceed their expectations, right? So one of the things is that people like to have different lighting situations. You know, it’s about their mood. It’s about their feeling comfortable. So that, you know, plus all the safety features, plus the quality features, the functionality, all of that is to exceed their expectations on what they expect as far as the car they sit in or drive in.

 

OI: Now so just moving just forward and just buttoning it up, we’re all curious – I mean you guys resuscitated Lincoln – I mean Jaguar, right? You brought Jaguar back. You have two great products that you guys underpinned and now you’ve sold that off. You resuscitated Land Rover. You resuscitated Aston Martin. Now…what’s the vision for Lincoln? Tell us.

 

AM: It’s going to be a fabulous luxury brand in the United States again. Remember only eight years ago Lincoln was the number one luxury brand in the United States, number one. And so like you said, we bought those other brands so we invested in those. We invested less in Lincoln so now you’re gonna see this laser focus not only on the complete Ford brand, you’re gonna see this fabulous lineup of Lincolns coming.

 

OI: And you have a wealth of information from what you developed.

 

AM: We sure do.

 

OI: …to integrate back into your products.

 

AM: …we’ve got fabulous brand recognition on Lincoln because so many people that remember that it was a really luxury brand in the United States .

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