China is another area where Mulally’s strategies are crushing the competition. As I mentioned, Japanese automakers Honda and Toyota are struggling mightily in China – in spite of gains exhibited in May – partly because of tensions between the two cultures, and also because it’s designs simply aren’t hitting home with Chinese consumers. Ford, on the other hand, is crushing it! In May, Ford Motor Company (NYSE:F)’s China sales vaulted 45% to 70,540 units and plans to double its production capacity in the country to 1.2 million vehicles by 2015. Ford is accomplishing this by introducing 15 new vehicle lines based on practicality and value. By comparison, General Motors Company (NYSE:GM) gained just 9.4% in unit sales in May, thanks largely to higher Buick sales.
A step above his peers
In addition to completely revamping Ford, Mulally is responsible for reinvigorating Ford Motor Company (NYSE:F)’s shareholder incentives, reinstituting numerous employee perks, and giving back within the community.
To start off, Ford has repurchased approximately 160 million of its own shares over the past three years. Share repurchases don’t put money directly in shareholders’ pockets, but they do act to lower the number of outstanding shares and make the company cheaper on a P/E basis. The real boost came from a doubling in the company’s dividend earlier this year from $0.05 per quarter to $0.10. The new annual payout of $0.40 has returned to where it was prior to Mulally taking over and gives shareholders a handsome 2.5% yield.
Shareholders aren’t the only winners, though. Ford’s employees – thanks to Mulally’s hard efforts – had all of their perks reinstituted in 2009. These perks include discounts on Ford vehicle purchases, qualified tuition reimbursement, merit pay increases, and 401(k) matching. More importantly, Ford Motor Company (NYSE:F) has been hiring. In the face of high unemployment, Ford has been aggressively expanding its operations and providing work for skilled individuals.
Mulally also understands that community comes first. In the wake of the multiple tornado tragedies in Oklahoma, Ford is matching donations from its employees up to $250,000 with its dealers pledging another $150,000 via United Way to help afflicted families. It also is providing a $500 credit toward the purchase of a new vehicle for tornado victims. Beyond the tornado relief, Ford also recently announced a $1 million donation to be spread over five years to the College for Creative Studies to help Detroit’s youth. These are but a snippet of Ford Motor Company (NYSE:F)’s many community giving programs.
Two thumbs up
Like I always say, this isn’t rocket science; it’s just proactive and innovative management. Ford’s Mulally understands that consumers want good value, fuel efficiency, sleek designs, practicality, and reliability in an automobile – and he’s delivering on that promise across numerous continents. Ford’s U.S. and China sales volumes are zooming, its dividend is back to 2006 highs, and he’s doing a phenomenal job of rewarding the workers and communities that have helped bring back Ford’s glory days. For that I certainly feel Mulally is well-deserving of two-thumbs up from me!
The article This Is One Incredible CEO originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Ford Motor Company (NYSE:F) and Tesla Motors Inc (NASDAQ:TSLA). It also recommends General Motors Company (NYSE:GM).
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