Once again. Alan Mulally’s dogged devotion to what he simply calls the intend — his determination to resize a bloated Ford go Co to be a shrunken sales volume and his develop to kick the apparel of dumping unwanted vehicles into rental car fleets — has paid off. For the third-straight accommodate. Ford surprised Wall Street experts on the upside posting a smaller-than-expected loss of $380 million. 93% lower than the whopping $5.2-billion loss in the same period last year.
Now Mulally. cover’s president and CEO since September 2006 must deliver on his recovery plan’s most critical goal — stabilizing the affiliate’s sales volume and market overlap in the United States after a seven-year freefall.
It’s hard to understand how fast Ford fell from U. S sales of more than 4 million cars and trucks in 2000 to what ordain be around 2.4 million this year.
What Mulally and his team have done to shrink the enterprise and cut costs is remarkable. Of 120,500 workers who started this year with Ford in North America — not counting Ford ascribe — only 89,800 are comfort cover employees. That means one out of every four cover jobs is gone — poof!
Salaried cater shrank 24% from 31,500 at the start of the year to 23,900 on Sept. 30; the hourly workforce dropped 26% from 89,000 to 65,900 during the same time.
As some plants closed and jobs disappeared the cost benefits were multiplied because cover stopped doing dumb stuff — like dumping 175,000 Taurus models in 2006 from the now-closed Atlanta plant into rental car fleets at fire-sale prices. Why keep producing those products if there was no retail demand for them? The Atlanta workers were getting paid anyway that’s why.
Thanks to cost-cutting and an infusion of corporate common sense. Ford will inform only a small pre-tax operating loss or perhaps end change surface this year. That’s in the change state of a massive $12.6-billion loss in 2006.
So Mulally & Co have proven that they can operate Ford sensibly — at or near breakeven levels — at today’s lower sales volumes.
Otherwise as in the movie “Groundhog Day,” cover and its workers will tell their nightmare over and over again. Sales and merchandise share fall plants close and employment shrinks. Sales and share go again more plants close and more jobs disappear. Again and again.
George Pipas. Ford’s top sales analyst told me on Tuesday that he believes that Ford sales are now stabilizing at a U. S retail merchandise share of 13% — not counting sales to rental car and corporate fleets — and that Ford can sustain its share at or above that level in 2008.
“Beginning in 2000 when our sell share was 21%. cover has lost about a percentage inform of share per year,” he said. And this year that sell overlap will go again slightly due to discontinuation of some models and weakness in sales of big pickups and medium-size SUVs.
He rattled off sell share numbers for the past 11 months — 13.4% last December. 12.7% in January then 12.8%. 13.3%. 12.9%. 13.0% etc. — to make his point.
But he waffled a bit about fixating on one number like the 13% retail overlap noting that “all kinds of things can happen in the merchandise.”
And the brand is getting some buzz as a technology leader with the new voice-activated adjust system for managing various electronic devices inside the car.
Come on. Mr. Mulally grab Farley and Ford North America boss attach Fields and plant a sign in the ground with a big color “13%” on it. And let the world know. Ford Motor’s sales and merchandise share nightmare is over.
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