Ford’s financial problems haven’t been making headlines like GM’s have, but the company is in dire straits. Car and truck sales are hitting record lows and Ford’s stocks are following. Ford has a plan for surviving this crisis: stick to the old plan, but make it better.
While General Motors and Chrysler are cutting back on new car development in order to free up cash, Ford’s executives believe that the only way the company can survive is by focusing on building cars people actually want to buy.
"We’re only going to be in business if we create products that people really do want and value," Ford’s CEO Alan Mulally told The Detroit News Tuesday. "This is the essence of creating a viable Ford."
Because Ford believes that selling cars is the only way out of this crisis, its current round of advertisements are aimed at convincing customers that credit is still available.
Ford is cutting everything except for car development. The company is consolidating its international operations to eliminate jobs and factories. Ford’s executives have also taken a good look at some of its most efficient factories and put the best elements they found into practice worldwide. Executive bonuses and advertising have also been cut. Unlike GM, Ford has not decided that turning off escalators is integral to the company’s survival.
"Outstanding products are the heart of any turnaround of our business and its future success," Mulally said. "The whole intent from the beginning was to protect the product plan and the capital spending and engineering that goes with it and look for every other element of cash that isn’t directly tied to the products."
Mulally believes that because Ford’s plans for survival don’t rely on government aid, the aid is actually more likely to come.
"Whoever is going to invest or loan us money wants to know we’re taking the actions to create a viable company going forward," he said. "We are absolutely taking the appropriate actions. We’ve demonstrated that we’re making progress.”