Jeremy Hobson: We are just a little more than a week away from what's shaping up to be a decisive moment in the race for the White House. I'm talking about Michigan's Republican primary, which polls indicate is going to be a tight race between Mitt Romney and Rick Santorum.
As part of Marketplace's election coverage of The Real Economy, we'll be broadcasting live from Michigan next week. And today, we kick things off with the CEO of one of the state's largest and oldest companies. Ford CEO Alan Mullally joins us from Detroit. Thanks for being here.
Alan Mulally: You're welcome, Jeremy. Thank you.
Hobson: It seems from outside Detroit that the city, the auto industry is seeing a real comeback. Do you think that is true, and are you hiring in a big way?
Mulally: Clearly, Jeremy, in Ford's case, we are now profitably growing the corporation in the United States and worldwide. We have been through probably the worst recession since the Depression, but Ford chose to invest and even accelerate the investment in new products during the worst of that recession, so that's why we have them now available for everybody as the economy starts to come back and they need their new fuel-efficient vehicles.
Hobson: And of course, Ford is the only one of the Big Three American automakers that avoided bankruptcy after the financial crisis. What do you think, looking back now, that your company did differently that allowed it to emerge without going through bankruptcy?
Mulally: We borrowed nearly $23.5 billion in 2006 to restructure the business, to get it back to profitability. We started that process; none of us ever anticipated that the economy would slow down as much as it did. And now we're very pleased to not have used precious taxpayer money and to have this fabulous line of world-class products for our consumers today.
Hobson: But you're saying that you were able to do that in part because you took out a big loan at a good time, at the right time?
Mulally: Well that's absolutely a key part of the plan, but remember Jeremy, we also chose to invest in developing the new products that people really do want and value. We started that over five years ago. So we simplified the Ford product line, we divested Aston Martin and Jaguar and Land Rover and Volvo -- 100 percent focused on the Ford product line and Lincoln. We started that all over five years ago.
Hobson: A lot of people view you as a hero for turning the company around and as a result of your work, you received more than $50 million in stock last year. Do you see anything wrong with a CEO making that much more than the rest of the company workforce?
Mulally: All of the Ford employees are compensated in terms of the company's performance. So as we create an exciting, viable profitably growing company, I'm very pleased that everybody associated with Ford now is benefitting from a profitably growing company.
Hobson: And indeed, what you're saying is absolutely true: You have raised the salaries for your employees. But do you think that there's a problem with a CEO making so much more? Some people look at that and it opens their eyes a little bit.
Mulally: Well I think all the compensation is market-driven and is competitive and we are absolutely committed to being competitive in every element of our business and all the skills that we employ.
Hobson: So we are going to be in Michigan all next week. What is the one thing, do you think, that exists in that state that doesn't exist anywhere else in the country?
Mulally: I think that the focus on economic development and creating a business environment that public-private partnerships that creates an environment where businesses can be competitive and they can grow are going to be the ones that create great jobs and great careers and also contribute to the big issues that all of us in the United States care about, like economic development, energy independence, security and also environmental sustainability. So it's that public-private partnership to create that environment.
Hobson: Alan Mullaly is the CEO of Ford. Mr. Mullaly, thank you so much for talking with us.
Mulally: You're welcome, Jeremy. Thank you.