Book Review: 'American Icon: Alan Mulally And The Fight To Save Ford Motor Company'

Includes: F
by: Jacob Steinberg

Normally Seeking Alpha publishes reviews for books written in topics of economy and finance. While this book is not directly an investment book, I still believe it holds a lot of value as it tells the story of Ford's turnaround. I believe that this is a good book for Ford (NYSE:F) investors to read as they need a lot of faith-refreshing at a time when Ford is underperforming the market. This book will renew the faith of Ford investors in Alan Mulally and show them that their company is in safe hands.

The book is written by Bryce Hoffman who covers Ford for Detroit News. The author has done his homework and studied the company inside and out. While the book tells a lot of stories that made it to the media, it also tells many stories never mentioned anywhere else.

This book is a story of one of the greatest turnaround stories in the history of the U.S., and the book does a great job of giving credit to the heroes of this turnaround. The book talks about the steps Alan Mulally took as the CEO of the company to save it from the hands of government while GM (NYSE:GM) and Chrysler failed to do the same. The CEO had to make a lot of difficult and brave decisions, change things around and work really hard to succeed.

For example, when Alan Mulally starts his job at Ford, he notices that there were too many cooks in the kitchen. The company's management was busy with having multiple meaningless meetings each day, and many of the decisions affecting the company were not even made during these meetings. There were too many people with decision making powers and these people never seemed to agree with each other. The company was burning through cash and it was only a matter of time before it needed government assistance.

Once Mr. Mulally takes over as the CEO he is tasked to do whatever it takes to keep the company from being acquired by the government. Mr. Mulally started to a different competitor's car each day in order to be able to assess where the competitors were doing better and where Ford needed improvement. He realized that if Ford doesn't offer products that satisfy customers, they wouldn't buy these products and the company wouldn't be around anymore. The first key to Ford's success was to figure out what Ford offers, what customers want, and how to close the gap between the two things.

Next, Mr. Mulally emphasizes the importance of teamwork in the company. He sets up meetings as early as 6 am to gather all the executives and track the process in the company. Every week, the executives provide an assessment of the company and their personal progress in this learning experience. The company learns to learn lessons from the past mistakes and not repeat those mistakes. In a matter of months, the quality of Ford's products start improving significantly and the strengthening demand follows.

The story flows really well. As you read the story, you will get caught in it and you will not be able to drop the book until you finish it. Once you are done with reading it, you will see that Ford is in safe hands. After reading this book, my first reaction was "I must buy more shares of Ford." I believe that a company's management is one of its most important assets, and usually one of the most ignored assets as it doesn't get mentioned in a company's balance sheet. The difference between a good CEO and a bad CEO can be as large as the difference between total success and bankruptcy. As Ford has been successful with its turnaround in North America under this leadership, there is no reason why it shouldn't be able to do it in Europe again with the same leadership. This book has just restored my faith in Ford's management.

Disclaimer: I have had no contact with the writer or publisher of this book. I was not offered any compensation from anyone for writing this review. I personally purchased and read the book recently and decided to share my views on the book with the readers.

Disclosure: I am long F, GM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.