While large and small companies alike are campaigning for federal aid money, one of the nation’s oldest producers and employers is attempting to weather the financial crisis on its own. The company may surprise you: Ford.
Ford’s business decisions stand in stark contrast to those of General Motors, which saw CEO Rick Wagoner ousted by the Obama administration in exchange for government funding.
His replacement, Frederick Henderson, said Tuesday that he would still consider bankruptcy as an option, as well as further layoffs.
Ford is taking innovative strides as well, but not quite like those at GM.
Led by CEO Alan Mulally, the company is driving toward the future while looking at the larger picture. Rather than narrowing his scope, Mulally is taking cues from Toyota, the world’s most successful automaker. That plan includes several steps, such as increasing the quality of products, negotiating with workers and pioneering production of vehicles that use alternative fuel sources.
Ford is finally starting to listen to its market. When the company started more than 100 years ago, Henry Ford claimed its customers could have any color car they wanted, as long as the color desired was black — a tactic that surely would not work today.
Since then, Ford added more colors to its lineup, and perhaps the claim can be made that adding color increased the brand’s profits. Today, Ford is taking similar steps.
On the Internet, auto fans have been raving about two Ford models featured in James Bond films: the Mondeo and the Ka. The talk started long before the cars’ cameos, however. Ford has several vehicles available only in Europe, including multiple compacts and variations of the Mustang. At this year’s Detroit Auto Show, Mulally showed off the Fiesta, a smaller Ford model that was available only in Europe until recently. The company has a number of cars that domestic consumers would like to purchase but cannot, and this needs to change.
There is also the release of previously Ford-owned brands including Land Rover and
Jaguar. Mulally said he is doing this to focus more on Ford’s main brands, specifically Lincoln and Mercury. It is a wise strategy, and it again follows the Toyota model.
In 2002, Toyota launched the Scion brand with simple pricing formats to appeal to younger, price-conscious consumers. Furthermore, its design and branding were meant to appeal to a younger generation that was not attracted to the Toyota or Lexus brands. Ford has not commented on any future brands aimed in a similar direction, but doing so would definitely create revenue for the company, whose product line is mainly geared toward families and drivers who need the hauling capacity of full-size trucks.
Amid all this innovation, Ford has made a few promises that seem too good to be true. On Tuesday, Ford and General Motors followed Korean manufacturer Hyundai’s
example by offering buyers plans to protect them if they lose their jobs and can no longer make car payments. Under its “Ford Advantage Plan,” Ford will cover monthly payments of up to $700 for as long as 12 months if the car buyer loses his or her job.
The marketing doesn’t make clear whether those who benefit from this plan will have to pay off the aid money later — or, if so, whether that would include interest. Consumers do not seem to care: Hyundai’s sales have increased by 4.9 percent so far this year, according to USA Today.
Mulally said he hopes these changes will bring Ford to new levels of production, sales and brand worth. The innovations at the now somewhat stale company look to be well thought out and effective. Ford isn’t free from financial woes yet, and its failure to request bailout money has given it little room to work if these changes do not lead to results. In any case, Ford has put the wheels on its future — now it just needs to let it roll.
Alex Cobb is a freshman majoring in mass communications.