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Southfield, Michigan: Ford Motor Chief Executive Officer Alan Mulally may be pulling a repeat: Turning around the No 2 US automaker in the same way that he helped revive Boeing, the world's second-largest aircraft maker.
Ford on Friday reported a $100 million first-quarter profit after analysts had forecast a loss. Ford shares gained the most since November 2002 as Mulally maintained his pledge to restore the Dearborn, Michigan-based automaker to profit in 2009.
Grade 'A'
"It's hard not to have a positive reaction to these results," said Van Conway, who advises struggling companies as president of Conway, MacKenzie & Dunleavy in Birmingham, Michigan. "When you overlay the state of the economy, you have to give him an 'A' on the report card."
The profit was the second for Ford since the career-long aircraft executive took over 20 months ago, recruited by Chairman William Clay Ford Jr. to tackle the automaker's third restructuring in five years.
"The confidence in our plan is really increasing," said Mulally, 62, in a Bloomberg Television interview yesterday. "We said we had to aggressively restructure to meet the real demand."
At Boeing, Mulally slashed employment as head of the commercial airplane division by more than half, to about 50,000 in eight years. He sped production of a more fuel-efficient jetliner, the 787, and helped lay the groundwork for record orders. Boeing reported a 38 per cent gain in first-quarter profit three days ago and said it has $346 billion in unfilled commercial and military orders on its books.
Ford dropped 90 cents, or 11 per cent, to $7.50 at 4:15pm in New York Stock Exchange composite trading on Friday, the biggest drop since September 2006, after Merrill Lynch, JP Morgan Chase and Bear Stearns lowered ratings on its shares.
In his current post, Mulally has eliminated 46,300 jobs in North America over the past two years as Ford has closed or scheduled to close nine plants to match its shrinking manufacturing footprint. One shut plant will be re-opened.
Mulally still hasn't shown that he can boost US demand for Ford products. The company has posted just three monthly sales increases in its home market since Mulally took over. Ford now claims 16 per cent of US sales, down from about 25 per cent 13 years ago.
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