In late 2005, Shanks returned from abroad to Fords headquarters in Dearborn, Michigan, to work on the restructuring of the companys North American operations with Mark Fields, who runs that business. Ford North America earned $4.1 billion the first six months of this year, more than offsetting losses in its European and Asia-Pacific units. Shanks, who was promoted from controller to CFO in April, recently spoke with Institutional Investor Editor Michael Peltz about Fords global ambitions and how the company hopes to apply what it learned in North America to solve its problems in Europe.1. How has your job changed since you became CFO in April? As CFO, Im more involved in the operating side of our business than before. I also now have the opportunity to interact with key external stakeholders because Ford traditionally has designated the CFO as one of the key external spokespersons for the company. This is a role I undertook while serving as the CFO at Mazda years ago, but not really since.
As CFO at Ford, I have significant input in determining the strategic direction of the company. In fact, Fords corporate strategy group reports to me. Its exciting being highly engaged in setting the strategic agenda for the company. Its great to be part of the senior team, keeping an eye on the pulse of major trends and metrics important to our business, while looking into the future and developing strategies important to our future growth and success. Its also exciting to understand where things arent quite going as well as they should or where theyre going extremely well, then focusing the teams attention on the right areas to move the business forward.2. What is the strongest market for Ford?
The U.S. is our strongest market despite the fact that the economy continues to be very modest in this recovery even after such a deep recession. Because we fundamentally restructured the business here, weve been doing extremely well very strong profits, very strong operating margins.3. You havent been so fortunate in Europe.Our business in Europe, which is a very important part of Ford its the second-largest market for us has clearly been affected by everything thats going on in the region. We had done a reasonably good job of restructuring over the previous eight to ten years before all this hit over the last year or so, and we made money. We had modest margins, but we made about $2 billion from 2004 through 2011. Clearly, in terms of where the overall macro environment is, were going to have to do more. Weve been very clear about that, although not about what we will do in detail. 4. Are you looking at closing plants or other cost-cutting measures in Europe?
We have faced challenging situations in other parts of the business before and successfully addressed them through our One Ford plan. You can look at what we did in North America several years ago as evidence of our ability to turn things around, although the situation is not exactly the same. In North America we had dramatic cost reductions, including capacity changes, but we also heavily invested in product, technology, quality and brand-building. It paid off. Since 2009, North America has been solidly profitable. In fact, in each of the first two quarters of this year, our North American pretax operating profits exceeded $2 billion. So as we look at Europe, its going to be another comprehensive approach to the business, involving revenue, brand, product, technology and, of course, cost.5. How do China and Asia fit into your growth plans?
Asia-Pacific is a huge growth opportunity for us given the size of the market. Although we are a global company, Ford has a relatively small footprint in Asia. That said, we are investing heavily in Asia, mainly in China, Thailand and India, to support a presence that will be much more meaningful than it has been in the past. By middecade we will have nine new plants including two we just opened in the first half building almost 3 million vehicles a year. By middecade we also plan to introduce more than 50 new vehicles and power trains in Asia. Going forward, Asia will represent about 60 percent of our global growth.