Ford CEO, Alan Mulally, announced yesterday that Ford earned a $2.7 billion profit in 2009 and will be solidly profitable in 2010. The company did this without receiving any US Federal aid and without entering bankruptcy court. (See: “
Ford Earns First Annual profit in Four Years”).
How did they do this?
Mulally, a Boeing veteran, focused on business fundamentals: good products, cost efficiencies, better selling practices, pricing strategies, and efficient use of capital. He and his team have shown that America can still build cars and be competitive. Admittedly, Ford is not out of the woods; Mulally went to the debt markets after joining the company and amassed a huge debt load to transform the company. 2009’s earnings are a result of the restructuring; their “uncompetitive balance sheet” is as well. The debt will need to be repaid and will be a drag on future earnings.
However, Mulally and his team are to be commended for doing the right things, and doing them well. Way to go Alan!
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