Feb

19

 

"How a Painting from 1925 Inspired Ford's Customer Focused Future":

In 2007, Mulally tells Fast Company, "I was looking for a compelling vision, a comprehensive statement to deliver that strategy." He found the company's mission for the foreseeable future in a 1925 advertisement in the Saturday Evening Post. It featured a painting commissioned by Ford's ad agency called "Visions of Tomorrow."

I strongly suggest readers of this Mulally puff piece take a look at the real financials and not be swayed by the Art Deco-esque graphics that are reminiscent of the covers of Ayn Rand's books.

Ford had gross profit in 2005 of 26 billion and EBITDA of $14B. Mulally was named President and CEO in Sept 2006. In 2006 gross profit dropped to 3.4 billion. But just a few months after he joined, in 2007 (before the recession), gross profit bounced back to 21 Billion. Most notable, except for one quarter in 2010 (which was a post recession bounced), he never achieved annual EBITDA greater than when he became CEO.

Mulally was a very good CEO. But anyone who knows anything about running a company with $170 Billion in revenues and 190,000+ employees knows that it takes more than a few months to turn around a company; that auto sales are cyclical; and that his major achievement was preventing Ford from following GM into government-controlled bankruptcy — primarily by shrinking the company — not by growing the company.


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