DEARBORN - “So how are you? Did you get a chance to look at the earnings?,” said Alan Mulally, president and CEO, Ford Motor Company, as he began the second quarter Town Hall meeting for Ford employees in the auditorium at World Headquarters.
“You know, this is really a very special day for all of us for a lot of reasons,” Mulally added before running through the list of second quarter successes the companies’ leaders had just shared with investors Wednesday morning.
“So, we had our earnings call this morning and everyone that introduced themselves said, ‘Congratulations.’ It was really neat,” he said.
There is a lot to be enthusiastic about as the first half of 2013 comes to a close. According to the second quarter financial reports, the company made gains in market share in every region around the globe.
Total company pre-tax profit for the second quarter was $2.6 billion with a pre-tax profit of $4.7 billion for the first half of the year marking 16 consecutive profitable quarters.
North America set second quarter and first half records for pre-tax profit; Asia Pacific Africa delivered its best ever quarterly profit, South America returned to profitability and Europe, despite incurring a loss due to the continuing economic challenges, increased its pre-tax profit compared to a year ago and the first quarter.
Throughout the presentation, Mulally focused on four metrics; wholesales, revenue, pre-tax profit and operating margin. “Every region improved on every one of these metrics for the first time ever, that’s why everybody is so excited,” said Mulally.
“Our strong second quarter with improved results in every region of the world is another proof point that our One Ford plan is continuing to deliver and is building momentum,” Mulally said. “We remain absolutely committed to our plan of serving customers in all markets with a full family of vehicles offering the very best quality, fuel efficiency, safety, smart design and value. As we do, we are providing profitable growth for everyone associated with Ford.”
Mulally credits the One Ford plan, and the entire team’s cooperation with the plan, for the company’s continued success. The key elements of the one Ford strategy include:
• Aggressively restructure to operate profitably at the current demand and changing model mix
• Accelerate the development of new products that customers want and value
• Finance the plan and improve the balance sheet
• Work together effectively as one team, leveraging Ford’s global assets
While going through the earnings data with the audience, Mulally explained he added his handwritten notes to the slides because he was just so excited about the data that he wanted to emphasize certain points.
While he touched on growth in every region, Mulally paid slightly more attention to the companies’ progress in China.
“We always highlight one area around the world (when meeting with the investors) and give them a little more insight into what our plan entails,” Mulally said. “This is just so fantastic because we only had one or maybe two vehicles (in China) not very long ago … we had promised by 2015 we would have 15 new vehicles in China and you can see the progress we are making now to deliver on that promise.”
Mulally pointed out that Ford will have launched five new vehicles in China by the end of 2013. These new vehicle launches will essentially double the Ford product lineup in China by year end.
Ford also plans to expand the number of dealerships in China from 600 at the end of 2012 to more than 900 by 2015. At this point in the year, Ford maintains a record 4.3 percent market share in China up 1.5 points from the same time last year.
Throughout the presentation, the audience burst into applause a number of times in response to the positive news regarding the companies’ continued growth.
In addition to gaining market share and increasing profits, other important achievements for Ford this quarter include new hiring initiatives, which will add 3,000 new salaried employees in the U.S. by the end of 2013, and the increase in hybrid sales – selling more hybrid vehicles in the first five months of 2013 than Ford has ever sold in a year.
Following a complete review of the earnings data, Mulally took questions from the audience, many of which came from interns working through their summer stints with Ford.
One particularly ambitious intern asked Mulally what advice he would give to someone who would like to be standing in his shoes someday leading a company as important as Ford?
“Functional excellence and technical excellence is really important … whatever you choose as your passion, it is really important to be the best you can be at it and also to continuously improve.”
Mulally added that there was a phrase he always kept top of mind, ‘It is nice to be important, but it is more important to be nice.’
Another member of the audience, who boasted he drove his Ford Escort with 392,000 miles to the Town Hall meeting, raised the question of quality and how the company will improve going forward. Mulally explained that concerns with MyFord Touch and PowerShift automatic transmissions have contributed to declining quality ratings but added, “We have learned a lot, and we are incorporating all those lessons learned … and now we are growing so we are absolutely dedicated to improving our processes to enhance the quality of our products.”
To close out the meeting, Mulally provided another round of thanks and encouraged everyone to revel in the good news today and continue working together under the One Ford plan.