Comeback Kid

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HENRY Ford did not invent the automobile. But he made it accessible to the masses, re-inventing the way cars were made.

Ford’s assembly line concept replaced the expensive hand-made process of making a car using a group of workmen who practically made everything themselves. Mass production not only sped things up but made cars a lot cheaper.

Ford’s vision was for a universal car “for the multitudes” – something he achieved in the Model T introduced in 1908.

Today, more than 100 years later, the company that helped put America and much of the world on wheels, has itself become the subject of re-invention. Credit that to a man who has had little to do with making cars.

When Alan Mulally, 65, landed on the chief executive’s seat at Ford in 2006, he bucked a trend that saw top posts in Detroit’s “Big Three” car companies held by those with a history in the car trade.

Mulally, who spent 38 years with Boeing, was the chief architect of the Boeing 777, the aerospace company’s highly successful large twin engine long haul airliner.

Prime achievement: Mulally at the wheel of the Fiesta. He reconnected Ford with its brand and standardised most parts for its cars around the world.

Hired by executive chairman William Ford Jr, the great grandson of Ford founder, Mulally moved in at a time the Detroit car maker was in dire straits, heading for an annual loss of US$12.6bil (RM42bil).

It was facing stiff competition from Asian car makers – saddled with generous union pensions and healthcare plans set up when the carmaking business was highly profitable.

Rises in fuel prices had also made the petrol-guzzling American sports utility vehicles and pick-ups made by the Big Three unappealing to consumers, hastening the downturn of US auto industry.

Ford’s operations were also not enjoying the global scale enjoyed by more organised and aggressive competitors.

Because of the way the 104-year-old company was organised, previous models of the Focus were designed separately by region and didn’t even share many parts.

Asked in 2007 how he would tackle something as complex and unfamiliar as the auto business when Ford was in such tough financial shape, Mulally famously replied: “An automobile has about 10,000 moving parts, right? An airplane has two million, and it has to stay up in the air.”

For Mulally, the way forward was the setting up of processes to transform the company into a leaner and more efficient outfit.

Described as practical and focused, Mulally embarked on drastic measures that included selling off Aston Martin, Jaguar, Land Rover and Volvo as well as consolidating operations by closing down unnecessary plants and slashing jobs to reduce losses.

Though controversial at the time, Mulally managed to secure funding before credit markets froze, allowing the company to quickly invest in cars and trucks which stabilised its sales.

Returning to its core on concentrating on the Ford brand, the carmaker is leveraging on its global presence to standardise most parts for its cars around the world.

Standardisation means that money saved by sharing parts globally gets pumped back into new technology, into things like better airbags and hybrid batteries, that can be spread more quickly across a common line-up of models.

Fewer designs also means fewer glitches and costly repairs. Ford’s quality ratings have subsequently improved.

Under the One Ford motto, Mulally aims to have the company working as One Team, with One Plan and One Goal.

Ford stakeholders would see themselves working as a lean global team, be aggressive in restructuring processes to operate profitably and accelerate the development of new products.

Ford employees themselves must develop a passion for the business, adopt a can-do attitude, hold themselves accountable and deliver the goods.

And Ford is clearly back in the game.

It was the only one of the Big Three who rode through the Detroit automotive crash of 2009 without asking for federal aid.

Detroit’s comeback kid also posted a profit of US$1bil (RM3.3bil) in the third quarter of last year.

A fitter organisation in a new auto industry landscape, Ford has accelerated the investment into development of new products.

Expect to see more of this highly re-invigorated brand when the new Ford Fiesta small car, developed by Ford Europe and one of the company’s latest generation global cars, comes to Malaysia soon through its local distributor Sime Darby Auto ConneXion Sdn Bhd.