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.
