results Give Us a Lot of Confidence - Mulally

by : Glady Reign

So far, so good. That was the message that the Ford Motor Co. is trying to convey in connection with its first quarter earnings. Ford CEO Alan Mulally said, "'We exceeded our expectations across the board."

Those expecting more bad news were astonished by Ford's better-than-expected sales results with a net loss of $282 million that surpassed Wall Street's expectations and triggered a diffident rally in the automaker's stock. This is the Ford's way of saying that it is back to profitability. But the battle has just begun.

The automaker said that it lost $282 million in the first quarter of the year - a noteworthy improvement from its $1.4 billion loss a year ago. Ford's first quarter revenue totaled $43 billion and that amount is up from the $40.8 billion in the previous year.

In an interview Mulally intimated, "We exceeded our expectations across the board, meaning across all of our brands and across all of Ford operations. Across-the-board improvement. Improvement on the revenue side and also improvement on the productivity and the cost side. And that's why we're very encouraged about this. Because our plan addresses the restructuring on the cost side and the quality side, but also with the acceleration of new product it addresses the revenue side. So to see these results gives us a lot of confidence that we have the right plan."

When asked about the areas the automakers did worse than expected, Mulally said they do not have an area that they did worse. He added, "One kind of neat thing that came out - maybe we didn't share it as clearly as we could - creating a viable Ford Motor Co. and this transition is not just about the Blue Oval in North America. This is about all of our operations worldwide and all of our brands. And our plan is to improve our quality and our productivity and make cars and trucks that people want across the entire Ford operations. And part of what you saw today was that plan working. Not only did North America exceed their plan, everybody did. Which is a great story."

"With the guidance that we have given - the reason that we went through that very carefully - it's a very good story that through 2007 year-end we believe that we are going to improve our automotive operations over last year. We have three quarters to go and the quarters are lumpy. There are lots of moving pieces through the quarters. Then year-over-year it can be a tough comparison because the plan is to go down in production - you know, to the lower demand and the changing model mix. But clearly even with all of the headwinds we are facing, our best estimate is that we will actually improve the automotive operations this year, the first year of our turnaround," Mulally noted.

Mullaly, formerly Boeing's CEO, has been with Ford in the past six months. When asked about his biggest frustration, he answered: "I don't have a frustration. It's hard work and you've got a lot of people involved. This is just such a positive indicator that the plan is working." Ford has been busy checking on the quality of the and other auto parts. This is to ensure outstanding customer feedback.

He added, "This is a wonderful transformation of a great company and it didn't do anything wrong, it was focused on big SUVs and trucks. The world changed. People want a full product line, delightful cars, fuel-efficient, reliable, great quality across the entire family. And that's what we put in place, to aggressively restructure and (adapt) to the changing world and get back to profitability and to accelerate new product development. And to see - for everybody to see - that this plan is working gives a lot of encouragement to keep going."

When asked about his meeting with the Ford family, Mulally simply said, "I had the pleasure to meet with them and I just gave them an update on the business. And their message I think was that they were very supportive."

In regard Mulally's meeting with the employees, the CEO said, "It was a very gratifying meeting. I had a chance to share our story and the progress in each of the areas of the world and each of the brands. We had about 400 people here in Detroit and then we were netted with everybody else around the world. Of course it's a great story to be able to share because it represents all of their hard work. He concluded, "And to see their smiles and hear their great questions about the business and going forward and the transformation. I thought it was a terrific meeting."