Out of Control Policy Blog

Where's Ford? Not Looking for a Bail Out

All the debate over the GM and Chrysler bail out has obscured an even more important fact: Ford Motor Company, once the "sickman" of the U.S. auto industry, isn't asking for any help. USA Today did a great profile on the company and its CEO, former Boeing executive Alan Mulally recently, and its worth a read by anyone interested in the future of the U.S. auto industry and the tactics of the Obama Administration.

Why isn't Ford asking for taxpayer money? The company believes it has the cash to weather the storm, and it's focused on the long term. It's strategy is to focus on creating long-term value, and Mulally is not shy about learning from what he believes is the "best of brand" in the auto industry: Toyota.

With its crosstown rivals on the ropes, Ford Motor (F) is painting itself as Detroit's standout — the only U.S. automaker weathering the auto sales depression without taxpayer life support.

While that may be a short-term accomplishment, Ford is reaching for much more. CEO Alan Mulally is trying to guide the 105-year-old company closer to the model of a foreign rival he makes no secret of having long admired: Toyota. (TM) In doing so, the company is anticipating how the auto world may be realigned by the time the global economy finally rebounds.

It raises an interesting question: If the U.S. auto industry is so moribound, how is that Ford was able to turn itself around? What is the justification for propping up GM and Chrysler? Moreover, the federal government is now pushing for a Chrysler-Fiat partnership that, with U.S. taxpayer subsidies, may well undercut the economic viaibility of Ford (and other leading companies with very large investments in the U.S. such as Toyota and Honda)?

Of course, given the heavy-handed industrial policy currently under way, it's highly unlikely that Ford will invite greater government scrutiny of their operations by publicly criticizing either the Administration or his rivals.

Samuel Staley is Research Fellow

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Comments to "Where's Ford? Not Looking for a Bail Out":

Delicia | April 3, 2009, 10:46pm | #

2006 Ford's CEO Alan Mulally took on this Company, fully understanding the problems the Ford Motor Company was having with it's design flaws in millions of it's vehicles.But, instead of taking care of the loyal American consumer base that had lost, cars/trucks/homes and even their lives, he saved the $20 plus labor cost and the damage the largest recall in US history would cause on sales, for this rainy day. Now, Alan with his sweet smile looks like a great business man, a great success. I guess he is congratulations,to some people you look like a hero. But to me You look like a man that failed to recall a $20 cruise control switch, when your company knew it was dangerous. And my 22 year old son Payton, paid for your success with his life.He burned alive driving a what was said to be a luxury Lincoln with 86k miles o it. 28 months have gone by, and Ford Motor Company never replaced my car, did not pay for the funeral, they did not even send flowers, but they did say they were sorry, and threatened to slap a court order on me if I contacted ford employees. So, everyone I meet I have to ask, Do you work for Ford? lol And it's kinda hard to come to a resolution when your ignored, and threatened to not speak to the company that is responsible for your child's death.
If someone placed a bomb under your car, everyone would be outraged, and ready to convict, but when a US automaker does the same thing, nobody wants to get involved.

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