09:06 PM CDT on Friday, May 15, 2009
By TERRY BOX / The Dallas Morning News
tbox@dallasnews.com
At a time when bankrupt Chrysler LLC and struggling General Motors Corp. are closing dealerships and plants, Ford Motor Co. plans to be profitable again in 2011.
“Ford is in a very different place right now,” said CEO Alan Mulally, who was in the area on Friday to attend the grand opening of Randall Reed’s Prestige Ford and Lincoln Mercury in Garland.
Ford, of course, has felt the pain of the recession just as other automakers have. The company lost a record $14.7 billion last year and another $1.4 billion in the first quarter of this year.
But Mulally, who came to Ford in 2006 from Boeing, where he oversaw the development of the 777 airliner and other projects, made a controversial decision shortly after he arrived to mortgage most of Ford’s assets so the company could borrow $23.6 billion.
The funds allowed Ford to operate through the recession without government assistance, and, more important, Mulally said, to continue developing vehicles. Some, such as the new Ford Taurus sedan and Lincoln MKT crossover, begin arriving at dealerships this year.
“We affectionately called that money our home-improvement loan,” said Mulally, who didn’t much resemble an automaker CEO in his red sweater vest, crisp white long-sleeve shirt and tan slacks.
Ford is already working to retire its considerable debt, he said.
“As we start to generate cash, we will be able to pay off those loans quickly,” said Mulally, a youthful 63-year-old Kansas native who’s featured in a cover story in this month’s Fortune magazine. “We are absolutely not postponing the pain.”
Ford has managed to separate itself from GM and Chrysler in perception, industry observers say, and that should serve the company well once the car market regains its health.
“I think Alan has been there long enough that you are seeing the results,” said Jeremy Anwyl, chief executive officer of Edmunds.com. “Most of these car companies have good designers. You just have to have someone who will cut them loose.”
“The direction they are moving is lifting the entire Ford group up,” said Jeff Schuster, executive director of forecasting at J.D. Power and Associates. “They have put good design back into their vehicles.”
Mulally, who at one point in the interview leaped up to go hug a 94-year-old woman who had just bought a Focus, said he decided to attend the Prestige grand opening because the dealership chose to invest millions in its facilities in a terrible economy to prepare for better times. That is essentially what Ford is doing, said Mulally, who drives a different car home every night, including a Honda Fit recently.
“If all you do is worry about slashing and cutting, this job is not much fun,” he said.