LyrArc Article Gist
Mullaly's experience at Ford, its culture, changes he has made and the gradual improvements that are taking place and showing up in better quality cars, cars for a global market with all global product capabilities focussed on developing top rated cars and all energies focussed on fewer car brands, the Ford and Lincoln brands. But as results improve the test will be how well Ford can withstand the difficult conditions ahead as consumption is sure to decline, and sales of cars drop with it as carmakers go through 2008 and 2009. The decision to focus on profitability was a critical choice made by Mulally and shows his instincts are right to let Ford's market share drop to its natural level and cut production to cut inventories and let ford scale down into a smaller but profitable and reilient company. The other was to focus on global cars and global product capabilities under Dennis Kuzak. And the third move to get marketing right with Jim Farley taken by Mullaly from Toyota's marketing organization. And the focus would be only on the Ford brand and logo, so Mulally will close Mercury models and sell the premium luxury brands except Volvo with the sale to Tata Motors. The market and stock price is responding and Ford has already shown a profit of $750 million in the second quarter of 2007 by being able to sustain higher prices with fewer cars to sell. The Fiesta compact goes on sale in the US in 2010 and this with the redesigned Focus and other models will show how far Ford can go. The risk is now more in the economy as BW estiimates show a $3 trillion overhang of overspending that occurred over the last decade that will have to be worked down by US consumers and so one can expect a continued and protracted decline in sales not just for Ford but for all manufacturers in the USA market.