Alan Mulally: CBI lecture.

Ford was the only major US car manufacturer to avoid bankruptcy during the recession. CEO ALAN MULALLY on how they did it, plus the importance of the UK to the company.  

Company president and chief executive officer Alan Mulally has set out the UK’s role in the remarkable turnaround achieved at Ford – the only major US car company to avoid bankruptcy in the recession.

Mulally emphasised the value of Ford’s UK presence as a major pillar of Ford’s global structure, saying: ‘It has a global role and one that can grow in importance’.

Loss-making

In the annual lecture delivered the Confederation of British Industry Mulally described how, in 2006 when he joined Ford, the company recorded a loss at a time when US car sales were relatively strong. By 2009, the company posted a profit of $2.7bn, a trend that continued in February 2010, when its US sales overtook those of General Motors for the first time in more than 80 years.

Turnaround strategy

The secret, according to Mulally, was to reduce the number of brands in the company’s portolio and to concentrate on the core Ford marque. A more limited range of models with more common parts is now being rolled out globally, while the Aston Martin, Jaguar LandRover and Volvo businesses have all been sold.

Mulally outlined the ONE Ford strategy to the audience of business leaders. This includes the ONE Ford Global Product Development system, which is expanding the company’s vehicle range, reinforcing the company’s position in mature markets and accelerating growth in emerging markets.

More UK jobs

In an interview with the BBC before the event, Mulally revealed that it is currently recruiting more than 100 new staff at its British factories, adding that further new jobs may be created.

He highlighted the significance of Ford’s UK powertrain engineering and manufacturing expertise.

‘Ford in Britain can produce two million engines a year including the latest low-CO2 technology petrol engines from Ford Bridgend in Wales and highly-efficient diesel engines from Ford Dagenham in London.
 
‘One-third of Ford cars globally are powered by engines manufactured and engineered in Britain.’

Alan Mulally: UK has global role.

Ford’s UK footprint

Ford’s Dunton Technical Centre, with its responsibilities for both powertrain and commercial engineering, is the largest facility of its type in the UK and it is a key contributor to Ford being the UK’s 11th largest R&D investor across all sectors.

The UK is the second largest market for Ford vehicles outside the US – again emphasising the country’s global significance for Ford – and it has been the UK car market leader 33 years.

Centenary

In 2011 Ford of Britain celebrates its centenary and the 100th year of manufacturing in the UK. This historic event is being matched by Ford’s commitment to a £1.5 billion investment programme over the next five years in low-CO2 manufacturing and engineering facilities at Bridgend, Dagenham, Dunton and Southampton.

CBI director-general Richard Lambert told ModernSelling.com: ‘Alan’s extensive business experience made him ideally suited to deliver this year’s lecture. He has gained great respect internationally for turning Ford around and for saving a global icon from decline.

‘Alan’s personal insight into the overhaul of Ford’s US product line, including the introduction to the US of new small cars developed in Europe, and his culture change at an executive level, provides businesses with valuable lessons on how to adapt to a changing economic climate.’

My Question / Comment Is...