Ford’s Mulally: Let’s Start by Making Manufacturing a Priority

By February 24, 2010General

NAM President John Engler dropped in at a National Governors Association session on Monday to listen to Alan Mulally, president and CEO of Ford, talk about the economy. The boss returned from event and said, “You really should listen to what he had to say about manufacturing,” and suggested Mulally’s response to a question from Kentucky Gov. Steve Beshear (D-KY) captured the message.

So here’s the CSPAN video of the program, which also included Mark Zandi, Chief Economist and Co-Founder of Moody’s We took an audio cut of the Q&A, about five minutes worth. And we transcribed the remarks, which follow:

Gov. Steve Beshear (D-KY): First of all, Mr. Mulally, let me just thank you and your leadership team for what you’ve done with Ford. The way you all got yourselves back on your feet and now are one of the best automakers in the world again, I think it speaks highly of the leadership and of your workforce. You’ve got a high quality workforce. We’ve got a great partnership in Kentucky with Ford, and they employ about 5,000 or 6,000 of our Kentuckians and produce some great vehicles there.

Let me ask you, what your views of how this country is supporting the manufacturing sector in general, and perhaps are there things that we should be doing, or what should we be paying attention to, to make sure that we continue to have the kind of strength that we need to be the No. 1 industrial nation in the world.

Alan Mulally, President & CEO of Ford Motor Company: I’d be pleased to offer you my thoughts on that, because it’s so important. Because as you know personally, and all of you that are associated with manufacturing, we are fighting for the soul of America right now, because we have not held manufacturing as a high priority in the United States. And I think sometimes it’s maybe because we define manufacturing with a small “m.” But when you look at the R&D that we invest in the United States, 70 percent of all the R&D investment in the United States comes from manufacturing.

It’s all the science, it’s the enabling technology, it’s the engineering, it’s the manufacturing. So, when we think of manufacturing– and I know you’re saying this too – this is manufacturing with a big “M.” And this is about whether the United States, whether the United States can compete with the best in the world where everybody else around the world will do whatever it takes to get into manufacturing. Because it IS the answer and part of the solution for energy independence, energy security, national defense, sustainability…it’s so important.

Now, with respect with what we can do, I think the most important thing is that we come together with a shared view that manufacturing is important … in that kind of a broad context.

The second thing is, is to move it up on the U.S. agenda, and that means that we need to have access to the markets around the world, which we don’t today, as you know. And so, manufacturing ought to be on the trade agenda, on every free trade agreement that we’ve been negotiating. That’s why we have not been supportive of the Korean Free Trade Agreement, because we have no access into Korea, and if you’ve noticed, the Koreans have taken advantage of the U.S. market in a very concerted, integrated plan?

So the first thing is, access to the markets. The second thing is, access to competitive capital for all of us. Another big one is a stable, predictable and globally competitive regulatory environment and tax regime. All the things that we’re talking about – this uncertainty that we have, we have no idea what that’s really going to mean to business going forward. And if we really believe in manufacturing, we’re going to make sure that we have a stable, understandable, predictable environment.

Another thing I would mention is a skilled and a motivated workforce. You mentioned the employees of Ford. I’ve been all around the world with Boeing and Ford, because 60 percent of our sales are outside the United States with both companies. And, I have never seen such a skilled and motivated workforce that we have in the United States. And everything that made the United States great – technology and the innovation – there’s nowhere else around the world that has nurtured an environment like we have in the United States. And so again, making manufacturing important, making it “cool” again so that we attract the very best and the brightest in engineering and science, all the enabling technology we’re talking about …So those are just a few.

Another really big one is, let the markets determine the currency, the currency exchanges. This currency manipulation is just a killer. I mean, we all know exactly what their countries around the world are doing. They’re targeting manufacturing. They undervalue their currency so they can make things, and we can’t. Right? Are we talking to each other here? We have got to have a real based trading around the world. And it’s not like it’s far away from each of you. You are the CEOs of these fabulous states, and our ability to compete worldwide means that we, the United States, have got to keep pushing to real based trading, so that we have access to the markets, we have access to capital, and that we have free trade agreements that allow that to happen with no distortion on the currency.

So those would be the big ones.

Join the discussion One Comment

  • Ron Bullock says:

    Mullaly’s comments are right on; we do need an agenda in the US to put the capital M in manufacturing. Our skilled workforce teams drive innovation and operational excellence. This demands serious education reform and is the cornerstone in maintaining our global competitiveness.

    Lack of a coherent Energy Policy, ever escalating Health Care costs and a tax rate on manufacturers that is being driven to the highest in the world, particularly when you consider that family owned companies pay at personal income tax rates, provide some daunting challenges.

    When the going gets tough, the tough get going. The manufacturing base that remains has been battle hardened and we need to work with the National Association of Manufacturers and our local state manufacturers associations to put pressure on our elected officials to get meaningful reforms enacted.

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