A few mornings ago, I heard Ford Motor Company CEO Alan Mulally on National Public Radio being interviewed about the road ahead for Ford.  I’ve been impressed with Ford throughout this economy and I was interested in hearing what he had to say about his strategy when he started at Ford, and his plan going forward.  While the plan was remarkably straightforward (class leading cars in each category in mileage, quality, design and a focus on long-term profitability rather than this quarter), it was what he said about being a CEO that grabbed my attention.

What Mulally said struck close to home and I recognized it as immediately true from the perspective of firsthand experience (albeit on a much smaller scale).  He spoke about being a CEO as being more than responsible to shareholders, but really having to work for “stakeholders”.  Stakeholders are, as Mulally put it, the shareholders, the employees, the customers, the suppliers, the transport companies, the enthusiasts groups and basically, the larger involved community of the company.  Wow! Welcome to our small world here at Factory Five!  There isn't a single decision that I make that doesn't involve the extended family of stakeholders in the Factory Five community.  And as I learned this past year, that is what makes all the difference.

While 2009 was a challenging year for many companies, it was a defining year for us at Factory Five.  It was the toughest year in the history of the company from a business standpoint. Our sales were down from historic highs, we also faced a costly (and without merit) Federal lawsuit from Shelby that was likely timed for the sole purpose of hitting us in the pocketbook (nothing else really explains their bizarre legal strategy).  Operationally, just about all of our suppliers ran their inventories down to nil, wreaking havoc on our service levels and backorders as parts that were normally available with lead time X became lead time X+90 days or more!  It didn’t help supplier matters that we drew out our payables.  Juggling these business challenges was tough.  But in a bad year, a lot of really good things happened.

As I look forward to this bright New Year, I can’t help but look back in awe at the year we’ve been thru.  Mulally’s words struck home.  Had I done my job as a CEO and simply focused on returning value to the shareholders, I believe we would have failed.  It was the focus on my responsibilities to the “stakeholders” of Factory Five that caused good decisions to be made at the toughest times that would lay the groundwork for future growth and reveal our true charter as a company.

The year 2009 will be remembered by me as the very best year for Factory Five.  In the truest sense it was a test.  We could have easily survived the downturn with classic methods of layoffs, cuts and a focus on ownership.  But we didn’t do that.  What we did was come together as a company.  We all sacrificed together on the salary front, the owners more than anyone.  We all sacrificed on the hours and work load, carrying more and more per person.  Just as the challenges seemed to be endless, so too were the solutions mustered by a unified group!  We did more with less, across the board. We worked closer than ever with our partner companies, and we listened intently to the wise council of our customers.  There was a real noticeable feeling in the air.  It reminded me much of the early days of Factory Five where passion and excitement were in greater supply than funding.  Customers who visited commented that there was a positive vibe throughout the company.  We all worked well together, and it showed.

The Mk4 will be followed by some other exciting products that we have committed resources to.  Our Hot Rod business has grown tremendously and so too have the opportunities.

What an honor it is running an American manufacturing company in this day and age.  What an honor it is serving the stakeholders and community of Factory Five Racing. 

Dave Smith

President