The following is an excerpt from Sam Gustin | May 25, 2012 | Time.com |
Picture on Left: Ford Motor Company President and CEO Alan Mulally, left, shares a laugh with Executive Chairman for Ford William Ford while answering questions from the media after the company’s annual shareholders meeting in Wilmington, Del., May 10, 2012.
When Alan Mulally took over as CEO of Ford in September 2006, the storied automaker was losing money on every car it produced, staring at a $17 billion annual loss, and getting trounced by the likes of Honda and Toyota on the global stage. “We were going out of business,” Mulally recalled matter-of-factly in a recent interview. The situation was so bad that David Neeleman, CEO of JetBlue, recently said he thought Mulally was “insane” for taking the job.
Ford faced disaster, but unlike GM and Chrysler, the ailing auto-maker didn’t take a dime of taxpayer money. Instead, shortly after Mulally became CEO, Ford mortgaged all of its assets in order to secure a $23.5 billion loan. Among other things, that meant turning the iconic blue Ford oval, one of the world’s most famous trademarks, into collateral.
This past week, over five years after taking out what Mulally calls a “the world’s largest home improvement loan,” Ford was able to regain its logo out of hock when credit-rating agency Moody’s raised the company to “investment” status, becoming the second agency to do so after Fitch. (Ford regained the Mustang and F-150 trademarks as well, along with control of the company’s headquarters and factories — which were also put down as collateral.)
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