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10.16.10

The Daily Beast Talks With Ford's CEO

Alan Mulally has been Detroit's best chief executive. So what does he think about the auto bailout, electric cars—and the Tea Party's affect on big business?

Thanks for sitting down with us. Does Barack Obama deserve credit for saving Detroit?

The government’s intervention was absolutely key to helping create a chance for GM and Chrysler going forward. That’s why I testified on behalf of GM and Chrysler, as you know. The reason we did was that we believed—like two presidents [Bush and Obama]—that if GM and Chrysler would have gone into freefall bankruptcy, they would have taken the supply base down and taken the industry down plus maybe turned the U.S. recession into a depression. So I think we did the right thing by testifying on their behalf and I think that the government did the right thing for that critical industry at that time to step in and help.

But if your competitors can conduct themselves in a fiscally irresponsible way, then declare bankruptcy, get bailed out by the government and launch anew, is the system rigged in a sense against companies like Ford that meet their financial obligations?

I think that it goes with the circumstance…They clearly were bankrupt companies. But having said that, I think it was a bigger issue of systemic risk both on the financial system and also on the manufacturing system. We’ll never know exactly whether we could have let both those industries go under and survive. But what I knew then and what I know now, I think the government did the right thing. The chance of catastrophic failure was very high. I’m a capitalist and a market-driven person and so day in and day out, so [generally] I’d like to continue to see that the market decide who gets a chance to be in business.

Why do you think there is the perception that the Obama administration is hostile to business?

I think what’s frustrating everybody up until now is that they wanted to see more attention on the fundamental economy and growing the economy after this horrible, horrible recession. You look at health care and the financial crisis and all these things everybody’s working on, I think the frustration is that everybody wants to see more attention applied to the economic development and growth. Personally, I was just invited to be on the task force of the President’s Export Council to figure out how to move manufacturing up, and export and grow in the United States. I’m just very pleased with the focus that I see now of the administration laser-focused on having our economy grow again. It’s the most important thing.

The Tea Party is angry at big business also. Their supporters in Congress are hearing every day the conservative populist anger at the bailouts in particular. What would you say to them? Are you expecting an even more anti-business environment from Congress in the future?

I sure am not… more and more people realize the importance of economic growth, near-term and long-term in the U.S. and the competitiveness with other countries around the world. The highest priority is to get this economy going again and it has to be led by the private sector. The only way that we’re going to grow is if the private sector is able to get going again because of the increase in consumer confidence and a reduction in unemployment and we get this great machine that serves us so well going again. I think more people now than ever realize that that has got to be one of our highest priorities. So I, I think just the opposite. Economic development has got to be part of the solution. Getting technology and innovation in the United States going again does not make any difference if we don’t grow in the United States again, right?

It’s estimated that health-care and pension costs add an additional $1,500 per car to the cost to the consumer. How does Ford expect to remain competitive in the long run with those kind of fixed costs?

Well, I’m with you. This is my position: Everything right now needs to be looked at through the lens of how do we grow the fundamental economic engine of the United States. Everything. And so we know how to work with the government…What does it mean to a competitive business environment for us to operate in the United States? And clearly we are, we have a long way to go on this economic recovery and right now the focus has got to be to look at everything that would help us make the U.S. more competitive and allow us to grow the economy. That’s the lens we ought to be looking at everything through right now.

China’s investing $15 billion in electric cars. Why didn’t Ford get involved in electric cars earlier and do you think that America can take a leadership role in this emerging market or is it just too much hype right now?

You know, Henry Ford and Ford were the first company to get involved in electric cars over 100 years ago. And the issues we have today are exactly the same as we had over 100 years ago. That is, we need the enabling technology to make a significant improvement, especially in battery size, functionality, performance, charging, weight, and safety. That’s one thing. The second thing is we need a public-private partnership and public policy that allows us to put in the infrastructure for electric vehicles. Remember a few years ago when everybody thought it was going to be hydrogen? Because if we don’t put in the infrastructure and a smart grid that actually generates the electricity clean and make it available so that we can have electric cars in volume, we’re not going to see the compelling vision that we’re all thinking about. But just know what Ford is right there on the leading edge of enabling technology and we’re also concerning ourselves in this debate so that we can figure out a system solution, including infrastructure.

Final question, Daily Beast is hosting a conference on How to Reboot America this week. What is your suggestion?

The chance of catastrophic failure was very high.

It is to look at everything that’s being done today through the lens of whether it will help improve the business environment and grow the economy.

John Avlon's new book Wingnuts: How the Lunatic Fringe Is Hijacking America is available now by Beast Books both on the Web and in paperback. He is also the author of Independent Nation: How Centrists Can Change American Politics and a CNN contributor. Previously, he served as chief speechwriter for New York City Mayor Rudy Giuliani and was a columnist and associate editor for The New York Sun.