If you've been following stock market news today, you probably heard that Ford posted the worst quarter numbers in its history—a staggering $8.7 billion loss. But as the New York Times reports, industry analysts are beginning to see CEO Alan R. Mulally as an executive who is willing to take big chances to reinvent business in Detroit. That's because the old way—relying on large SUV and truck sales for most of the profits—isn't working anymore. And Mulally, as an outsider coming in, isn't tied to old ideas at the company. He reiterated as much in a Fox Business Network interview earlier today.

"Our smaller vehicles are very much in demand right now, [and] sales are tremendous," Mulally said in the interview. "So what we're going to do is convert one of our truck factories where we also make cars into a complete car factory. As early as early 2009 we could increase production of smaller vehicles."

Something that I have been wondering forever is why Ford continues to build separate, excellent smaller cars for the rest of the world—notably, the Focus and Fiesta—that we can't have here. We do have a Focus. But it's seriously out of date and not really a competitor anymore, whereas the global version is much more in tune with the times. It looks like Mulally realizes this.

"We clearly focused on big SUVs and trucks in the United States and we focused on dynamite cars and smaller vehicles around the world," he said in the same interview. "That's not a balanced plan."

However, there's a flaw in his perception that the government's new policy on tighter fuel economy standards was, as he put it in the interview, "so not involving the customers." His point was that with today's higher fuel prices, now consumers are deciding on smaller vehicles, so now Ford will build them. But the government didn't step in and raise CAFE for 30 years, because the automakers had convinced the government that it wasn't possible to do so.

Because to me, that's exactly what was wrong with the auto industry here—that the big three resisted and resisted, and pretended it was impossible with current technology, that everyone would lose jobs in the auto industry, customers didn't want to buy them anyway, and costs would skyrocket. So instead, they weighted their portfolio almost entirely on large trucks and SUVs, and let their small car designs languish.

Now, because they "waited for consumers to be involved," they're 10 years behind the Japanese in refinement, fuel economy numbers, and performance in small cars. Consumers obviously already wanted smaller cars; they just bought Toyotas, Hondas, and Nissans all this time. Mind you, those manufacturers sell plenty of gas guzzling vehicles too—they're no saints—but their line-ups are better balanced, with more emphasis on greener and environmentally friendly designs. And now that many more customers want smaller cars, they're ready to go, while the Big Three scramble to turn everything around now—because suddenly, customers want them, as Mulally put it. Is it too late?