The executive team at Ford Motor Company has given us a number of lessons in how to take a small advantage and leverage it to set ourselves apart from our competition.
Ford was the only one of the big three that declined the 'bailout' loan offer from President Bush. While GM and Chrysler jumped at the offer, Ford said, "thanks, but no thanks"-at least for right now.
While far from being cash rich, Ford believes they have enough in the bank to allow them to say 'no' to government loans. While facing much the same situation as the other two auto manufacturers, Ford's management team made a wise decision to maximize the little leverage they had-more dollars in the bank than GM or Chrysler thanks to the decision to divest some assets in order to gain a stronger cash position in anticipation of a rocky road ahead -and decline the loans that are so vehemently opposed by most Americans.
Ford's management is betting that they can get loans if need be, but by passing on them at this time they:
Garner goodwill amongst the buying public. Americans for the most part hate the 'bailout' idea-particularly after they feel they were duped on the financial institution bailout. By foregoing the loans, Ford stands to gain a great deal of goodwill with potential buyers.
While GM and Chrysler are trying to mitigate the damage by buying ads to apologize for their past sins (GM) and to thank the public for 'investing' in them (Chrysler), Ford is touting its 'strong' position and its understanding that the company, not the taxpayer, should be responsible for its success or failure.
Both GM and Chrysler's attempt at PR spin have backfired. Not only do both companies look weak, taxpayers have voiced resentment that GM's management admitted past quality issues only out of desperation to garner goodwill with taxpayers and that Chrysler has 'wasted' part of their emergency loan dollars in a thank you advertising attempt, not to mention the ads focused on the taxpayers 'investment' in the company-an investment they didn't want to make but was forced upon them by government.
Ford, on the other hand, gets to be the good guy-the one who will live or die on its own, who will be true to the free market system, who will suck it up and survive without burdening the taxpayer. Ford's truck motto of "Ford Tough" has become the unspoken motto of the company-an independence and self-reliance that the tax paying public respects.
Gain the same restructuring benefits GM and Chrysler will get. Whatever concessions GM and Chrysler gain from their vendors and unions will be passed on to Ford-without Ford having to suffer the humiliation and embarrassment of succumbing to Congress's demands. They'll get 100% of the benefit without any of the cost.
Freedom to work out their own problems. While GM and Chrysler will be forced to submit to the demands of Congress, Ford will retain its independence. Although good portion of the auto industry is run by Congress through regulation, each of the auto companies has had the freedom to manage their own companies within the regulation framework set out by Congress.
GM and Chrysler will have to forfeit a good deal of that freedom. The same institution that has proven incapable of managing itself much less any of the thousands of programs it creates and that has been the creator and caretaker of the Social Security Ponzi scheme will now be one of the primary business planners of GM and Chrysler.
Ford's refusal to take the bailout loans frees it from the same oversight fate that GM and Chrysler face. GM and Chrysler may die-and Ford may follow suit, but without congressional oversight, Ford's demise will probably be slower, more orderly and less circus like than GM and Chrysler's. It is also very possible that while GM and Chrysler are driven further into the ground by congressional mismanagement, Ford may be able to restructure itself into a profitable company once again.
Ford's fortunate position today is due primarily to it having a small but important advantage over GM and Chrysler-a few bucks in the bank. More importantly, Ford understood how to leverage that small advantage and set itself apart from GM and Chrysler.
It would have been easy for Ford to have taken the loans. It would have given them additional funds to help them in their restructuring and a bit more breathing room, and it wouldn't have put them in any more of a negative position than the other two companies.
In fact, their original position was to join GM and Chrysler in the effort to get government loans-until they realized the immense value of the one advantage they did possess. They had the foresight to look beyond what additional funds would do in terms of making their life easier in the short-term and instead took a long-term view of how they could capitalize on their one strength. Their belt-tightening may have to be more radical than their competitors, but the rewards from a PR and independence standpoint far out weigh the short-term advantage of a bigger bank account.
What advantages do you have that you can leverage today?
Whether you are a single salesperson, a sales leader, or the CEO of a corporation, you have advantages you can leverage. They may be small, they may be large. You may have multiple advantages you can exploit, or, like Ford, you may be neck deep in serious problems and possess only one small advantage over your competitors. The real challenge is how you can take your advantages, whatever those advantages may be, and finding a way to leverage them to set yourself apart from your competition.
Paul McCord is president of McCord Training, an international sales training and consulting firm located in Texas. The author of two best-selling books and the author of numerous sales and management articles, Paul has trained thousands of salespeople and managers around the world. He is the author of the popular Sales and Sales Management Blog (http://salesandmanagementblog.com). He may be contacted at [email protected] or visit his website at www.mccordtraining.com
Copyright 2009, Paul McCord. May be reproduced without change, with proper attribution and brief bio. Notice of when and where article is to appear to [email protected]
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