Mulally's achievements position Ford to thrive in a very hard industry.
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Alan Mulally of Ford Motor Company
The changes Mulally implemented since joining Ford have radically transformed the company and set it up not just to survive the crisis, but thrive as a highly profitable automaker. Though he's winning our 2010 award, Mulally's achievements actually began several years ago. The first move he made after becoming president and CEO in late 2006 was to convince Wall Street to lend Ford $23.6 billion. This was an all-or-nothing act for Ford since it had no additional access to the credit markets.
Then came the recession. Ford was battered as the market tumbled and gas prices skyrocketed in 2008, and the stock traded barely over $1 late that year. Although the company was suffering and burning billions of dollars of cash, Mulally's early actions to shore up the balance sheet meant Ford was the only automaker to not take taxpayer-funded bailout money in 2008 and 2009.
Eventually the capital markets thawed and auto sales rebounded enough for Ford to start turning a profit. The goodwill from not taking bailout money combined with an excellent new product lineup (also thanks to Mulally's leadership) enabled Ford to gain over 100 basis points in U.S. market share in 2010, more than any other automaker. The market has rewarded Mulally and Ford shareholders as Ford's stock traded over $17 per share in 2010, and we think the best is yet to come.
Cars People Want
A superior vehicle is what will ultimately get customers into a showroom, and Mulally correctly recognized that fuel economy laws and the threat of high gas prices required Ford to be less reliant on light-truck models. One of his first product moves was to bring back the Ford Taurus full-size sedan, a product that has sold very well. The Taurus has won Kelley Blue Book's best resale value award in the full-size car segment the past two years. Other Ford models are also showing noteworthy improvements. The 2011 Ford Mustang GT won the same award in the high performance car category.
Furthermore, the company claims that the "projected resale value of 2010 Ford, Lincoln and Mercury vehicles after 36 months in service increased by an average of $1,310 per vehicle compared to the 2009 model year - the industry's largest increase among full-line manufacturers." These higher residual values come from the fact that Ford now makes cars people actually want to own instead of vehicles that are purchased only because of heavy incentives.
This success even applies in the subcompact segment with the new Fiesta, which Ford reported in the fall to be posting sales prices greater than vehicles in the segment above it, such as the Honda Civic. The Fiesta is winning profitable market share in traditionally import-friendly markets such as California and Florida, and only 7% of American Fiesta buyers are opting for the cheapest trim package.