Wednesday, December 24, 2008

Is Ford showing the way out of recession?

A couple of weeks ago, most people were rightly criticizing Ford, Chrysler and GM's CEOs for their arrogance or ignorance in flying to DC in private jets. This week Ford's CEO has been the first to show understanding of what transpired. Ford's answer is not only to rectify a mistake, but also to show forward thinking out of recession.

In refusing the bailout money, Ford is rectifying a really bad marketing and public relations mistake with a real win. Judging by the massive outpouring of goodwill on the web since this step was announced, Ford's future looks rosy once consumers have the money to buy new cars. In fact, in my opinion, as cars are necessary to the bulk of Americans, and as Americans will want to help the US economy, Ford is likely to win market share even in the recession.

Secondly, in refusing bailout money, Ford has separated itself from GM and Chrysler. Ford now looks like a healthier, more forward looking enterprise, and that "feel" will transfer to perception of its cars. It's a shame for Chevrolet (GM) as its marketing of the new Malibu was pretty nice. The rest of GM and Chrysler in toto really don't seem to have done anything for the longest time.

Ford's decision should encourage businesses to look to the future and to recognize the critical importance of its positioning at this juncture. This recession is levelling competition and public relations and marketing coups won through this hardship will be worth double those made in a strong economy. The timing for Ford couldn't be better as Toyota (of Lean Management fame) just posted its first loss in 70 years. If it markets well, and if it ensures a quality product, who knows where Ford may end up in 2 years. Yes, it will still be a challenge for Ford over the next year, but I would be willing to bet it ends 2009 in a much healthier position than GM or Chrysler.

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