Alan

Alan

Recently, when the other major U.S. automakers
accepted federal funds in order to stay in business, Ford
Motor Company—in the voice of CEO Alan R. Mulally—
said no. The federal funds were to come in the form of
short-term loans, which Ford determined that it didn’t
need at the time to survive. Several years earlier, the firm
had faced financial decisions and restructured its debt in
such a way that, when the economy slowed down, Ford
didn’t.
Mulally observes that this timing was a bit of luck
and a bit of strategic planning. “I go back to the fundamental
point of view that the Ford Motor Company has
taken about the future going forward, and the actions
that we have taken to create that future,” he observes.
“[Several years] ago we decided that fuel efficiency was
going to be very, very important going forward, along with
quality and safety and good value. We also decided that
we wanted to provide customers with an absolutely clear
vision of Ford and focus on the Ford brand.” As part of
this overall strategy, Ford sold off its luxury brands Aston
Martin, Jaguar, and Land Rover. Meanwhile, it invested in
the development of moderately priced, fuel-efficient cars
and trucks. Ford took on some extra debt at the time as
a hedge against a recession—and had the cash on hand
when the other two automakers didn’t.
Decisions like this are typical of the responsibilities
that are faced by top managers like Mulally. They require
strong leadership qualities that include a willingness to
persist during tough times. But Mulally wasn’t always
CEO of Ford. His first management position was as an
engineering supervisor at Boeing. He overmanaged his
employees so closely that one engineer finally quit. Mulally
says that this was an important experience early in his
management career. He realized that his job as a manager
was “to help connect people to a bigger goal, a bigger
program and help them move forward to even bigger
contributions. That...

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