Ford's Mulally Hits the Road

In an interview from his drive to Washington, the Ford CEO calls the drubbing of last month "a learning experience"

By David Kiley

Ford CEO Alan Mulally bombed last month in hearings before the Senate (BusinessWeek.com, 11/18/08) and House of Representatives in which Detroit's Big Three automakers were asking for up to $25 billion in loans. Mulally's performance was hurt in large part by the fact that most members of Congress treated the CEOs of General Motors, Ford, and Chrysler as if they were all in the same boat (or corporate jet).

Ford (F), in fact, not only has more cash on hand than GM (GM) or Chrysler. It says it may not need government money at all to outlast the recession. Safety and quality ratings have been running higher than those of its domestic rivals, according to Consumer Reports and other third-party rating entities. And the company is about to introduce Ford Fusion and Mercury Milan hybrid cars in early 2009 that beat the Toyota Camry hybrid by about 5 mpg.

But if Ford's story is a bit better than those of GM or Chrysler, its executives admit that the companies' fortunes are intertwined. They depend on the same suppliers, and if GM or Chrysler goes bankrupt, it will take some of those companies down with it. That, in turn, would play havoc with Ford's ability to maintain production and sales.

Mulally made two big mistakes before Congress: Along with the other auto CEOs, he flew to Washington in a private jet to ask for taxpayer loans. And when asked if he should take a cut in the $22 million compensation package he got last year, Mulally said: "I think I'm all right where I am."

On Tuesday, Dec. 2, Mulally was driving in a Ford Escape Hybrid, along with three other Ford executives, for two more days of Washington hearings, which start Thursday. In a phone conversation with BusinessWeek auto writer David Kiley, Mulally took a break from his turkey-salad sandwich to discuss the challenge he and Ford face.

So, you aren't driving right now?
We are rotating driving, but they tell me I shouldn't talk to you while driving, so, no.

You are a wealthy, successful guy. Are you eating bad road food and coffee from rest areas like Breezewood, Pa.?
I didn't know about Breezewood before they told me about it. They tell me we have to stop there and get our pictures taken. We stopped at a dynamite service plaza and we bought a little boxed lunch.

Were you taken aback with how you were received in Washington (BusinessWeek.com, 11/19/08) last month?
I was surprised. But going through it and reflecting on it, I really learned a lot. The enormous issues we have in the country, the economy, the financial crisis and the credit crisis, and unemployment, consumer confidence. And all these things where everyone is trying to figure out the most important thing to stabilize the economy. So my appreciation for the frustration, and my compassion for the thoughtfulness that many of the Congress people had, really went up.