Call him the comeback kid.
Ford Motor Co. CEO Alan Mulally, 64, has steered the once-struggling automaker into profitable seas this year. Perhaps more valuable for the long term, Ford has become a consumer favorite, and its vehicles have climbed steadily in product quality rankings.
In a tumultuous year, those accomplishments have made him Automotive News' Industry Leader of the Year for 2010.
First, there's the auto-maker's bottom line.
In the first quarter of this year, Ford reported a net profit of $2.1 billion, compared with a loss of $1.4 billion a year earlier. Ford said it "expects to deliver solid profits this year, with positive automotive operating-related cash flow."
Products produced those profits. Mulally remains disciplined in cutting costs and reinvesting in product development. Redesigned models such as the Ford Taurus sedan helped boost Ford Motor's U.S. market share through June to 17.5 percent from 16.1 percent a year earlier.
And in June the Ford brand jumped from eighth to fifth place in the Initial Quality Study by J.D. Power and Associates.
Of course, Ford has benefited from the troubles of its rivals. Dealers report that domestic-make shoppers turned increasingly to Ford after General Motors and Chrysler went through bankruptcy and accepted government funds to survive. Ford drew import intenders in the wake of Toyota Motor Corp.'s recalls.
Eschewing a government bailout has served Ford well. But in the bleak days of late 2008 and early 2009, forgoing government cash was a more difficult decision for Mulally than it seems today.
Now the new Ford Fiesta is expected to lift third-quarter sales as Ford launches the compact car this summer. And early next year the redesigned Ford Focus sedan and hatchback arrive on Ford's new global small-car platform.
"The most important thing Ford has done is invest heavily in new product during this down cycle," Erich Merkle, president of the consulting firm Autoconomy in Grand Rapids, Mich., told Bloom-berg this spring. "As we're coming out [of the recession], they've got all this new product coming out in just about every category."
A daring move by Mulally made that product offensive possible. In late 2006, Ford borrowed $23 billion, hocking everything, including the company's Blue Oval logo. That gave Ford the cash cushion it needed to withstand losses and develop new models such as the Fiesta.
The trade-off was a debt load that Mulally has said puts Ford at a competitive disadvantage with rivals GM and Chrysler, which slashed their debt in bankruptcy.
Ford ended the first quarter with $34.3 billion in debt. It trimmed that to $27 billion by making payments totaling more than $7 billion in the second quarter.
Mulally's discipline showed in June when he made the historic decision to terminate the 71-year-old Mercury brand by year end. His logic: Mercury's market share was less than 1 percent, and Ford could better spend limited product development dollars on the Lincoln brand. For Mulally, it's all about spending on product — wisely. c