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How Ford Avoided the Bailout

Wednesday, March 14, 2012

Bryce G. Hoffman , auto reporter for The Detroit News, is now author of American Icon: Alan Mulally and the Fight to Save Ford Motor Company. He joins the show to explain how Ford went from the edge of bankruptcy to making a profit without government aid, and what the company's success tells us.

Guests:

Bryce G. Hoffman

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Comments [13]

kikakiki from New York City by way of Ohio

your last caller complains her tax dollars went to the bail-out, but it would be her tax dollar that would be paying for unemployment benefits as well as health benefits for those out of work auto employees, don't lose sight of all the ancillary businesses that were saved and for gosh sake did she understand that this administration stopped the job losses we were experiencing just the finger in the dike was a massive feat and where do you think all those people who lose their wages go and think of the taxes they are no longer paying its a domino effect think of the people who would not be able to send their kids to college, think of the kids who would not be taxpayers who do you think is the middleclass

Mar. 14 2012 11:01 AM
Carl Ian Schwartz from Paterson, New Jersey

One of the things an engineer like Mr. Mullaly realizes--and B-school graduates often do not--is that a supply chain is required in the manufacture of automobiles and other complex machines. The bail-out preserved this supply chain, which provides far more jobs and is far more versatile than simply producing parts for automobiles. It was this supply chain that enabled us to win the Battle of Production in World War II. To kill it off is short-sighted, to say the least--one would be killing off the skill set and facilities needed for ANY industrial production.

Of course, ideologues either say that the bail-out went to CEO salaries (faux populism) or foreign cars--specifically very expensive ones--are better (our mainstream auto magazines).

Mar. 14 2012 10:58 AM
Nick from NJ

Wow, Caller Jessica! Terrible point! Stuttered a bit on Brian's question, good diversion though! Ignore the question and answer a question you create yourself!

Luck and timing. If Ford hadn't gotten that 23 Billion dollar loan at that exact time (prior to the Wall Street Crime), they would have failed. Lucky lucky lucky.

Mar. 14 2012 10:56 AM
Yes, I drive a Jetta

The Ford Focus is a nice car, but it is basically a carbon copy of the Volkswagen Jetta. Why did it take Ford so long to come up with their car, given that a template was already on the road? Similarly, I recently drove a Chevy Impala and it has to be the worst car on Earth. Why are car companies still making bad cars?

Mar. 14 2012 10:54 AM
Deirdre from Westchester

My husband has a Ford Mustang and is very proud of how the company handled the crises...he feels much better about his car and will buy Ford again. he even bought stock in the company based on Ford's actions.

Mar. 14 2012 10:53 AM
Sheldon from Brooklyn

Ford has always had a different culture from the other two American Companies.

Growing up in another country in the 80's, Ford was the only American Company that made "right-handed" drive cars for their foreign markets at the time.

Mar. 14 2012 10:53 AM
Edgar from manhattan

I am a daily driver of a 1977 Ford pickup. It runs great.

Mar. 14 2012 10:52 AM
josh Karan from Washington Heights NYC

Was not part of Ford's ability to be hopeful of its future a result of it having built better cars over the previous decade?

The Ford Taurus was the best selling car or close to the best selling car in American for at least a decade, at a time that fewer wanted to buy GM or Chrysler cars.

Mar. 14 2012 10:52 AM
Nick from NJ

They also created two new automobiles that became highly sought after, the Edge and the Fusion. Both still going strong.

Mar. 14 2012 10:52 AM
Carolita from NYC

Don't forget that without the other two being bailed out, Ford might have gone under anyway. They benefitted from the bail out indirectly.

Mar. 14 2012 10:48 AM
Graham from Bronx

Plus being an engineer he knows what it takes to design and make things.

Mar. 14 2012 10:46 AM
Graham from Bronx

Ford avoided a bailout because the CEO is an ENGINEER instead of a business major. Engineers are "conservative" and avoid risk, while business majors are risk takers, so when Mullaly moved to Ford he found that they were under financed and needed “a cushion to protect for a recession or other unexpected event." An action that was poo-pooed by MBA business school types at the time.

Mar. 14 2012 10:41 AM
George from Brooklyn

Who might succeed Alan Mullaly once he steps down? Does Ford plan to hire another outsider or promote someone from within?

How much of Ford's turnaround could be attributed to Mullaly's predecessor, Bill Ford?

Mar. 14 2012 02:23 AM

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