Green Ford Rides SUV Profits (National Review, 07.26.10)
Posted by hpayne on July 26, 2010
Ford’s $2.6 billion second quarter profit — its best in 12 years — is a testament to Alan Mulally’s visionary restructuring of Ford into a leaner company focused on its core Ford and Lincoln brands. It’s also a result of America’s return to SUVs and its embrace of the only Detroit company that did not take government welfare.
But don’t expect Ford’s sunny, politically correct CEO to admit it.
The consummate marketing executive, the hard-driving Mulally makes a point to always spin positive. As a result, his company has embraced the Green movement and Big Labor as inevitable realities that must be turned to its advantage.
So even as Ford has made Green a company brand — its ads emphasize its products’ mpg and sensitivity to the planet at every turn — its quarterly results are paradoxically a result of sales spikes in the Blue Oval’s most profitable vehicles: light trucks. The Ford Explorer and Ford F-150 pickup, for example, have seen sales expand by 30 percent this year as low gas prices and an improving economy have brought customers back to SUVs.
On the labor front too, Ford is benefiting from big cuts in Big Labor’s wage and benefit demands. But as the company rebounds, the UAW is growing restless to win those gains back. The UAW’s presence still makes it difficult for Ford to break even on small-car production even as Ford must build more to satisfy federal mpg rules. But why rock the boat? The company’s refusal of government bailout money has made it the iconic Red, White & Blue brand again and any labor war would only muddy that image. Mulally this week stroked his union for helping make U.S. production of small cars profitable again.
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