Ford Dodges Bailout with Outside Help

We've frequently praised Ford in this blog for the actions it has taken to secure its future... to the extent that any Detroit auto maker can secure its future these days.

A lot of the praise can be directed at Ford's CEO Alan Mulally, an outsider to the Detroit Big Three and the auto industry in general.

Click here to read more about how Ford took an innovative approach to get ahead its Detroit rivals - GM and Chrysler. I pulled out some excerpts from the article on Mulally and the actions he took to avoid a potential bankruptcy at Ford, at least for now:

Mulally, 63, blessed with a deceptively soft-spoken persona, was audacious in taking on all of Ford's most critical problems at once. The result is the healthiest cash position of any domestic automaker, a firm committed to just one brand, the "greenest" line-up of Detroit offerings, and the one domestic U.S. automaker that has actually been gaining market share.

A prescient Mulally soon after his arrival bolstered Ford's treasury with a stunning $23.4 billion (U.S.) in fresh borrowings and lines of credit in late 2006. The move was questioned at the time because Ford was required to put in hock just about all of its assets, even its hallowed "Blue Oval" trademark.

Again it's another example of how an outsider CEO can bring fresh thinking to a company. Outsider leaders are not silver bullets to all companies in every situation. Indeed sometimes they can create more problems than they solve. From the article:

Outsider turnaround CEOs are over-rated. The now-bankrupt Nortel Networks Corp. is a sad example of that. But Mulally's remove from Detroit's notoriously insular culture has perhaps saved Ford, at a time when at least one U.S. credit-rating agency says there is a 70 per cent chance that either or both of GM and Chrysler succumb to bankruptcy.