Was Ford Prepared for the Fiscal Cliff?
For all intents and purposes, the so-called "fiscal cliff" has been averted.
It was a close call as politicians worked tirelessly to come to an agreement that appeased both parties. If the U.S. government had failed to make a deal, however, corporations, small business owners and working individuals would have been faced with a host of changes -- particularly higher taxes.
Was Ford (NYSE: F) prepared for this event?
"Obviously we deal with a lot of uncertainty everyday whether it's European uncertainty, fiscal cliff, budget ceiling -- all those kinds of things," Executive Chairman Bill Ford told reporters at the 2013 North American International Auto Show. "We build our plans based upon what we think reality is. We stress test it against every possible scenario to make sure that it's robust. I think our plan is robust enough that we'll get through any dislocation that may or may not occur."
Ford said that it is "almost impossible" to predict what will happen next.
"If you can do it, please tell me because my crystal ball is a little cloudy," he joked. "But we could be having this discussion at the beginning of every year. There are always shocks that happen. There are always external factors that we have to factor in. I think one of the best things that we do is we just build our business to the best estimate of where the world's going and then we stress test against a lot of bad-case scenarios to make sure that it is a robust plan. And we've done that again this year."
With regard to the firm's transformation, Ford said that it started by polishing the core brands. "I think it was a function of, we had to get the Ford brand right first," he said. "Frankly, if the Oval wasn't polished, none of the rest of it was going to matter. We've done a great job with the Ford brand. It's well-positioned. It's growing globally. Really, now is the time to turn our attention to Lincoln and really bring many of the same aspects we did on Ford to Lincoln."
"We talked a lot internally about whether this was worth the trip -- whether Lincoln should be invested in," he added. "We concluded, 'Absolutely.' Not only is it a great heritage, the name really resonates with people. It's got some of the most beautiful cars ever built in its history. If we could modernize that and reinterpret that for customers today in addition, putting a customer experience together that people have never seen before, then we though that this was very much an undertaking worth doing -- and we all believe that that's true."
Finally, Ford was asked if Lincoln would have separate platforms, a la Cadillac (NYSE: GM).
"We'll see," he said. "But one of the things that I think has served us so well has been our global platforms. It's given us a lot of flexibility. We can keep our products very fresh. We very much like that."
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