As one financial analyst recently commented, if business were politics, Detroit would be the Middle East. Yet in the midst of one of the worst car slumps in history, Ford Motor Company appears to be driving. However, at least it does better than its competitors.
Case in point: Ford’s F-150 pickup is currently the best-selling vehicle of any kind in the United States, and it doesn’t look like it’s in any danger of losing that title any time soon. But it’s compact, fuel-efficient cars like the Ford Focus that give us a glimpse of what the future may hold for this auto giant.
Ford Focus symbolizes the change of direction of the company. This car, built on a platform that allows the automaker to produce half a dozen different cars with the same components, is designed to be sold around the world. Ford expects to sell more than a million of these vehicles this year.
The company, it seems, put the last traces of the recession in the rearview mirror. They not only avoided bankruptcy and federal bailout, but became the most profitable automaker in the world. The transformation, however, has not happened overnight.
Taking over as CEO of Ford in 2006, Alan Mulally embarked on a crusade to save Ford. Due to the economic recession, Ford Motor Company had to adapt its current production to the lower demand. They set out to rework some of the traditional models and add new ones. The company divested its European car brands that were acquired under previous leadership and sold the customer service operations. They focused all their resources on the Ford brand.
Unfortunately, all this proved insufficient to save the company. Ford was forced to mortgage its most valuable assets, just to keep the company going and hopefully fund much-needed restructuring. This massive loan was taken out just two years before the financial crisis hit, making credit unavailable. Therefore, unlike its competitors, Ford had enough money to ride out the economic downturn. A desperate move turned out to be the right thing at the right time!
Today, Ford Motor is moving to integrate the company globally. Despite failing in the past, his compact Ford Fiesta is back in Japan. Sales of the Fiesta and Fusion midsize sedans are growing at a record pace. Ford Motor Company, Detroit’s second largest automaker and one of the largest of all time, has successfully reclaimed its position as an American icon and is now looking to sell cars around the world.