Ford’s chief executive, Alan Mulally, was mocked in 2006 for gathering more than 400 bankers into a ballroom and asking them to mortgage the company’s assets to pay for an overhaul of the carmaker.
The cash, he said, would give Ford “a cushion to protect for a recession or other unexpected event.”
The experts called him desperate.
But back then, money was cheap and Ford wanted to invest in its future. The company still faces a dark road ahead, but at least it has its headlights on and some gas in the tank.
Take-away lessons from a forward-thinking leader:
Seize the day. Mulally, formerly of Boeing, had been at Ford for only 90 days.
Think big. Because of easy credit at the time, the $23.6 billion in loans he ended up with exceeded the $18 billion he originally sought.
Separate yourself from the pack. Ford has taken no government bailout money, and Mulally likes to show off a cartoon likening college basketball’s Final Four to Toyota, Honda, Volkswagen and Ford.
Keep peace with your workers. Unlike GM and Chrysler, the company made a deal to finance half its retiree health care trust with company stock.
Show a little muscle. In April 2009, Ford made a deal with its creditors to retire $9.9 billion in corporate debt.
Do a little preening. “The No. 1 thing we need to do is deal with our reality and tackle these issues head on,” he told the bankers back in 2006. Now, he says, “This is America, and this is about making products people want and being self-sufficient. Clearly, the reputation of Ford is on the rise.”
— Adapted from “Choosing Its Own Path, Ford Stayed Independent,” Bill Vlasic, The New York Times.