Ford's Stealthy Success

Bill Pugliano / Getty Images Alan Mulally, CEO of the only American automaker not driving in reverse, talks to Allan Dodds Frank about when his company will turn a profit, the new Ford line, and driving to Washington.

When Ford CEO Alan Mulally unveiled a new small car in India on Wednesday, he took one more step toward his goal of returning the 106-year-old company to success by expanding small car sales in China, India, Europe—and even the United States. But while he knows numbers as well as anyone, the former Boeing executive, sitting down for an exclusive one-on-one with The Daily Beast, does not want to go near any suggestion that Ford could overtake General Motors as the No. 1 U.S. automobile manufacturer in the next couple of years.

“We are really pleased that the customers love the new Ford lineup. The customers will decide that, of course,” he said, in an interview with The Daily Beast at Ford’s Manhattan offices, of potentially becoming No. 1. “Most people believe Ford may have the greatest car, utility, truck lineup we have ever had.”

While he does not anticipate Ford will turn a profit until 2011, he said, “We see a good growing market over the next six months and year as the economy comes back.”

Mulally, after all, is at the wheel of the only American car company not driving in reverse. His counterparts at General Motors and Chrysler are working through the throes of bankruptcy, which also is unsettling auto buyers

That was clear during the Cash for Clunkers program, which Mulally said was far better for Ford than it was for Chrysler and GM. “Out of the top 10 vehicles sold, four were Fords. What is really neat is that four of the top 10 that were traded in were also Fords, because we had this tremendous base in the U.S., especially with trucks and SUV,” he said. “A lot of the vehicles that were turned in were less-efficient Fords that were purchased a long time ago.”

Enough demand remains “pent up,” Mulally said, that the end of Cash for Clunkers will not kill sales in the fourth quarter. While he does not anticipate Ford will turn a profit until 2011, he said, “We see a good growing market over the next six months and year as the economy comes back.”

According to the industry authority Automotive News, Ford's business is down less than its competitors for the first eight months of this year. Ford's sales dropped 24.8 percent for the first eight months, while GM is off 35.1 percent and Chrysler declined 39.3 percent.

Overall, for the first eight months of 2009, General Motors has 19.5 percent of the U.S. market versus 15.8 percent for Ford. That gap may narrow sharply soon, as GM liquidates Pontiac and tries to sell its Saturn line. Once GM’s dwindling supply of Pontiacs is gone and Saturn is off the books, GM will be down to 17 percent of U.S. market share—and that is presuming it can keep sales of Chevrolet and its other cars and trucks steady. Ford, with Mulally’s push to have a Ford vehicle in every segment, could easily pick up a percentage point with a few hit cars.

In the three years since Mulally left Boeing, he says: “We have really decided to focus on the Ford brand.”

The company has long enjoyed more than 25 percent of the domestic pickup truck market while limping along with little more than 11 percent of the U.S. car market, even as Mulally says it is garnering bigger market share for cars abroad.

Mulally is attacking the U.S. car market from small to large with higher-quality vehicles that also place premiums on safety and fuel efficiency, moves sure to be popular with U.S. customers concerned about saving money. “We have fixed our cost structure in the United States so we can actually make small vehicles here and make them profitably,” he said.