Ford CEO Alan Mulally Discusses Auto Industry Bailout, Economy, and Double-Dip Recession

Strategic Insights -

Ford CEO Alan Mulally emphasized the significance of the new Explorer's environmental and gas-friendly features, stating that the four-cylinder version is more expensive than the six-cylinder due to fuel efficiency. Mulally highlighted that 140,000 Explorer owners trade their vehicles in annually, seeking the latest technology, quality, and fuel efficiency. He also discussed the importance of the Ford Explorer's presence in the medium-sized SUV market, noting that 70% of parts for American auto manufacturers come from suppliers, and that a Ford collapse would have put pressure on suppliers.

Key Takeaways:

  • The new Explorer's four-cylinder version is more expensive than the six-cylinder due to its improved fuel efficiency.
  • The Explorer has sold over 6 million units, with 4 million still on the road, and 140,000 owners trading in annually.
  • Ford remains committed to its promise of offering a vehicle in every market size, with a focus on quality, fuel efficiency, and safety.
  • Sen. Harry Reid (D-NV) attributes Ford's success to the auto industry bailout, stating that if not for government intervention, General Motors and Ford Motor Company would have gone under.
  • Mulally denies receiving bailout funds, but testifies on behalf of GM and Chrysler, allowing them to receive temporary assistance.
  • Ford has a plan to transform the company, with a focus on accelerated product development and creating a strong business.
  • Mulally emphasizes that Ford's decision to testify on behalf of GM and Chrysler was not motivated by competitive disadvantage, but rather a desire to support the industry and the US economy.
  • Mulally believes that Ford's financial situation, with its own finance company and ability to pay back loans, is a source of goodwill and sets the company apart from other manufacturers.

Statistics:

  • The new Explorer's four-cylinder version achieves up to 26 miles per gallon.
  • 4 million Explorers remain on the road, with 140,000 owners trading in annually.
  • Ford has sold over 6 million Explorers.
  • 70% of auto parts in the US come from suppliers.
  • Ford's finance company has allowed the company to avoid taking bailout funds and to pay back loans.
  • General Motors' purchase of a subprime lender has raised concerns about a competitive disadvantage.

Sources:

  • FSN (Federal News Service)
  • American Motors
  • Sen. Harry Reid (D-NV)
  • Ford Motor Company
  • GM
  • Chrysler