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Special Report
Hero of Our Times
Just for the hell of it, I made myself a martini when I got home earlier tonight. I'm not much of a mixed drinks guy. A shot of whiskey and a cold beer are the usual for me. Still, there are times when you need to walk past the neighborhood bar and off to some side street lounge. Tonight was one those nights. And gin and vermouth are quite agreeable raconteurs.
The drink was needed because until recently I had felt immune from the recession. That façade cracked the other week when I realized that my finances had fallen behind my various obligations. That façade completely shattered the other night when my accountant called to explain that the tax refund check I was expecting to smooth things out isn't in the mail after all. Quite the opposite in fact.
Now, I don't want or need your sympathy. I don't deserve it either. Unlike the rich jerks wailing for their bailout from the federal government, I'll take responsibility for my mistakes and earlier short-sightedness. In this case it was being a little too loose with the cash when I did have it: buying drinks for friends, picking up the tab and trying to impress girls. Some of it I wasted too. I'll just have to muddle through now.
I would however like to offer a toast to one of the few leaders of corporate America who was not caught by the recession with his pants down around his ankles while desperately trying to find the fire escape: Alan R. Mulally, chief executive officer of the Ford Motor Company.
Ford is the sole member of the Detroit Big Three that is not in imminent danger of collapse and begging the Obama administration's indulgence to survive past Memorial Day. Indeed the company is in relatively robust shape, poised to gobble up GM and Chrysler's market share when those two finally circle the drain. All this can be chalked up to Mulally's leadership.
His competitors pushed the sales of SUVs and other outsize trucks and used the revenues to paper over their precarious finances, staggering under the weight of built-up debt and outrageously generous deals with labor and dealerships.
Mulally brought Ford into the black as well but also realized that the good times couldn't last. Before the fall, Mulally mortgaged everything in the company that couldn't roll into a showroom to build up cash reserves. He socked away $25 billion in total, to tide the company over in case of a downturn.
Ford cut fat too, closing factories and shrinking the workforce. He got the United Auto Workers to the table to renegotiate contracts. The Aston Martin, Jaguar and Land Rover brands were sold off.
Sure enough, the crash came. First, the spike in gas prices in 2008 caused sales overall to drop and the gas guzzling SUVs -- whatever their other attractions -- took the worst of it. Then the real estate bubble popped and soon the whole economy was in a full-blown recession. Sales fell off a cliff.
Mulally's foresight wasn't apparent at first. For one thing, he joined the GM and Chrysler CEOs in jetting to Capitol Hill last November to request a federal bailout. This gave the impression that Ford was hurting in the same way.
But even then Ford was distancing itself from its rivals. Mulally told Congress he only wanted the money as a backstop just in case things got worse down the road.
"We are seeking access to a $9 billion bridge loan, even though we hope to complete our transformation without accessing any of these funds," Mulally told the Senate Banking Committee in December.
You can see his thinking: If the government is making cheap loans available I'd be a fool not to be in line with the others. Once it became apparent, though, that Congress was not in a giving mood, Ford left the bargaining/begging table and hasn't been seen there since.
Today, GM and Chrysler, two venerable, once proud U.S. institutions have become branches of the U.S. government, toys that Obama will use towards what he himself called his "one goal" regarding the auto industry: building the kind of hybrid cars he and the rest of his administration favors.
To that end he has demanded that Chrysler merge with Fiat and ousted GM's CEO Rick Waggoner. It is not clear, to me any way, that Obama has the legal power to do either thing, but at this point both companies are too weak and too dependent on the government to raise an objection.
And so Detroit's Big Three may become the Detroit One. Well, so be it. Mulally -- who doesn't even have a background in the car industry -- has outmaneuvered his rivals, kept his company afloat in an awful economy and avoided the clutches of the government. And he did it all while taking a $1 annual salary. Not bad at all.
So I raise my martini glass to him. There aren't many heroes in this recession, but it's nice to know there is at least one.
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Kitty| 4.9.09 @ 8:17AM
GM's CEO Fritz Henderson was on Cavuto the other day looking and sounding the the kid who had just had an attitude adjustment behind the woodshed. The interview was pathetic and frightening.
I wish Ford's Alan R. Mulally all the best. But with Uncle Bam doing whatever he damned well pleases, and needing to subjugate private industry, the odds are stacked against Mulally.
...
Ryan| 4.9.09 @ 8:31AM
Ford stock is up almost 50% in recent weeks, up from about $1.50 low. HIGHLY undervalued, even near $3, IMHO.
It wasn't just the recent turns - they've been on a decent track for some time now. They're separating more from Mazda, were the first to work something out with the UAW, and they committed to not paying the execs until they return to profitability. They've recently cleared some more debt, and were streamlining models and getting rid of baggage. They don't have the dealer overload that GM does.
TONS of right decisions, very few wrong ones, and they still sell more trucks - the F150 - than anyone else.
My next vehicle, in 3-4 years, may very well be a Ford.
Pingback| 4.9.09 @ 8:31AM
» The American Spectator : Hero of Our Times links to this page. Here’s an excerpt:
Curly Smith| 4.9.09 @ 8:46AM
Fritz Henderson has a reason to be pathetic. The CEO of Lackey Motors now realizes that he's in a lose-lose position. If he does what Obama demands then his company will fail, but if he doesn't do what Obama demands then his company will fail. And, when his company fails, then he, and not Obama, will take the blame and he'll likely be prosecuted theft of public funds.
Aaron| 4.9.09 @ 9:39AM
I'm not ready to raise a toast to Mr. Mulally yet and certainly not call him a hero. Remember he is the same guy who was pleading with Uncle Sam to not let GM and Chrysler fail for if it does it will "bring down the whole industry". Mullaly was essentially the big brother dragging the little brothers to daddy needing some money because they blew it.
He knew then and now that if those two companies would have chosen the route of bankruptcy protection and reorganization, Ford would have probably been drug down with them. We could argue this point all day long (and probably will on this discussion board) that reorganization would have most likely allowed all three companies to reemerge stronger, cheaper and a lighter quite shaken up UAW. Uncle Sam would not have allowed the big three to fail under bankruptcy protection just as they haven't under bailout. The difference would have been concessions in unions and management not the senate and the house.
Dustoff| 4.9.09 @ 10:06AM
I'll bet you Boeing is sorry they let Mr. Mulally go.
Irish Spectre| 4.9.09 @ 4:02PM
...and all this time I thought that I was the only one in America who believed this was a story worth telling! Leave it to a fella named Thirsty to do the honors!!
"...beng a little too loose with the cash when I did have it: buying drinks for friends, picking up the tab and trying to impress girls. Some of it I wasted too."
...best line I've read all week.
Matthew Vadum| 4.9.09 @ 4:53PM
Would Thirsty McWormwood happen to be a fan of absinthe?
delicia Dawn Lewis| 4.9.09 @ 5:05PM
"So I raise my martini glass to him. There aren't many heroes in this recession, but it's nice to know there is at least one" This statement makes me sick !
In 2006 when your hero was brought into Ford Motor Company, he was advised on the issues Ford, Lincoln and Mercury's were having with Fire! Alan R. Mulally turned his back on the defective cruise control issue, choosing not to recall all of them at once, as to not scare off the consumer ( great business move). Unforgivably a death sentence for those loyal consumers that bought and drove Ford Motor company brand cars/trucks/vans /RV's.
I know a real hero, His name is Payton Tyler Lewis, he was 22 years old, he had just sold all his possessions to start a NON-profit, helping the homeless, disabled, and the disadvantaged. He also tours the villages in eastern Europe, planning to help out with 33 orphanages in extreme poverty. and I could go on and on about his heroic acts, but his final act of heroism cost him his life. The Lincoln, he was driving caught fire/ defective cruise control switch. Payton left the road, screaming for his girlfriend to jump out the window, the car slid into two trees, Payton and Samantha were trapped in a burning car, Samantha's leg was stuck, and she made half way out the window, Payton cracked open his door, then a second fire ignited on the right side. Burning them alive. Payton could have just jumped out of the car, but he would'nt leave Samantha stuck in the car. That's a real Hero.
Alan R. Mulally might be a great guy, but that $20.00 part he saved X millions of cars. killed my son. And Alan R. Mulally, has never contacted me, or my family. Nor has Ford Motor Company ever expressed any compassion or responsibility to us. deliciadawn@yahoo.com
Robert Rosencrans| 4.9.09 @ 6:23PM
If Mr. Mulally arrived in 2006, recalls on the defective switch were widened in 2007 and earlier recalls had been completed as early as January 2005. It appears that Ford did all they could. These cars require thousands of parts to come together and some become defective in use.
http://www.usautoinjurylaw.com/cases/fires/ford-fire-recall.htm
On August 3, 2007, Ford Motor Co. again expanded the recall of Ford vehicles due to problems associated with the speed control deactivation system. The latest recall included several additional model years of some vehicles previously affected by the switch recall, as well as a few new models of cars, trucks and SUVs, for a total of 3.6 million vehicles recalled. Owners of the vehicles included in this recall will receive notices in the mail urging them to visit dealers to install a corrective fused wiring harness to repair the allegedly defective cruise control switch.
Customers may also contact Ford directly at 1-888-222-2751 or the National Highway Traffic and Safety Administration's (NHTSA) auto safety hotline at 1-888-327-4236.
The August 2007 recall greatly widens the scope of previous Ford recalls made in March 2007, August 2006 and January/ September 2005. The March recall consisted of 155,000 2003 model year trucks, SUVs and cars. The January recall consisted of almost 800,000 Ford pickups and sport utility vehicles, including model year 2000 Ford F-150s, Ford Expeditions and Lincoln Navigators and 2001 F-Series Super crew trucks made at the same time, while the September 7, 2005, recall included 3.8 million full-size pickup trucks and sport utility vehicles.
NHTSA first opened an investigation into the alleged switch defect in November 2004. In March 2005, NHTSA began a second investigation of the issue, this time including Ford F-150 pickups from 1995-1999 and 2001-2002 model years, and Ford Expeditions and Lincoln Navigators from the 1997-1999 and 2001-2002 model years. The 2005 recall came less than two weeks after consumer advocate Ralph Nader criticized Ford for delaying action on the issue. Up to that point, NHTSA had received more than 1,000 complaints of engine fires linked to the faulty switch.
Roy| 4.9.09 @ 6:46PM
I still don't get the logic by which, if GM collapsed, Ford "would be dragged down with them". Logically, why? Wouldn't that leave GM's market share and trained work force available for Ford to pick up?
Granted it might take down a couple suppliers - but those are even more screwed than the Big 3 themselves. Visteon's stock was down at 3 cents before the latest bailout and even now it's only 15 cents. If the government quit bailing them out they would collapse and other suppliers could survive by taking their business. As it is, endless government bailouts keep them going just enough to drag their competitors down with them, without bringing them any closer to profitability, and at a cost of umpty billion dollars to the taxpayers. Yay socialism.
Jeff Daniels| 4.9.09 @ 6:48PM
Great stuff! Too bad we don't have more Mullalys! I haven't driven a Ford lately, but I'm seriously considering it ...
Frodo| 4.10.09 @ 2:13AM
Haha, what??? "Still, there are times when you need to walk past the neighborhood bar and off to some side street lounge." Yeah, because normal bars will NEVAR give you whiskey and beer. You have failed.
Plumee| 4.10.09 @ 5:19AM
Good article....one correction. Mulally gets paid a dollar a year only if Ford asks for government funds
Pingback| 4.11.09 @ 3:10AM
An Ode to a Corporate CEO | The Blog of Record links to this page. Here’s an excerpt:
Pingback| 4.11.09 @ 9:52PM
The American Spectator : Hero of Our Times | MotorSupports.Com links to this page. Here’s an excerpt:
Cato| 4.14.09 @ 2:53PM
Good for Mullaly for taking the appropriate financial steps to save the company, but at the end of the day there is one simple thing he needs to do: build cars that people want to buy. Grow up "Thirsty"; throwing mud at a president who has been in office for three months rather than looking at a generation of Detroit's mistakes is absurd. If Ford survives it will because they build a car people want to drive- and yes, that likely means hybrid or electric. And if they fail, well, then there will likely be dozens of nimble start-ups, like Tesla, following in Henry Fords tradition. I raise my glass to the entrepreneurs who are not afraid to fail.
Pingback| 4.14.09 @ 6:23PM
A toast to Alan Mulally! | truth about domestics links to this page. Here’s an excerpt:
Richard Baker| 5.2.09 @ 9:47AM
Mulally comes from the aircraft industry where re-adjustments are a way of life. Unlike the car executives who seem to assume that everything will always be, those of us in the aircraft business expect life to be fluid and so are prepared to shift gears and be prepared for change. Quite frankly, Mullaly and his bretheren have been working in a global economy since almost the beginnings of flight. Nimbleness and forethought are norms. Is this an absolute? No, but these people understand the transient nature of business and act accordingly more often than not. Now, if we can just get the government the hell out of the way we'll still lead the world in aircraft enterprises and technology
Pingback| 6.12.09 @ 11:25PM
The Ethical Case for Boycotting Chrysler and GM | The Blog of Record links to this page. Here’s an excerpt:
Pingback| 8.26.09 @ 12:22PM
Twitter Trackbacks for The American Spectator : Hero of Our Times [spectator.org] on links to this page. Here’s an excerpt:
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