This morning, I met with a management consultant who works for The Big Two Point Five. Back before the recent “unpleasantness,” Ford’s top brass engaged the consultant to tackle a marketing issue crucial to FoMoCo’s future. Department heads assembled. Despite overlapping fiefdoms and wildly different ideas for progress, the execs hammered out an innovative four-point strategic plan. Consensus was achieved. And then… nothing. Not one of the points was ever implemented. “These guys are scared to death of change,” he sighed. “Ford’s culture is always working against them.”
Although pundits recognize FoMoCo’s corporate culture as a bad, bad thing, they fail to identify the Blue Oval’s underlying take-no-chances, pass-the-buck, cover-your-ass management philosophy as the root of all evil. Reverse engineer all the decisions that lead to the Ford Focus’ interior, or the existence of the Freestar, or the plan to market a six-cylinder Lincoln crossover, or the general lack of killer cars, and it’s clear that the company’s corporate culture is slow, fat, lazy and stupid.
At the moment, Ford’s busy trimming the fat from the equation. At the top of the food chain, several of The Blue Oval’s biggest big shots are floating out the door on their golden parachutes: Steve Hamp, Chief of Staff; A J Wagner, Vice President of Ford Motor Credit Company; Dave Szczupak, Group Vice President; and Anne “Push Push Hug” Stevens, COO of the Americas. Upon her resignation, the last executive on the list left a love letter with The Detroit Free Press indicating the full extent of the ossification within FoMoCo: “The company has too many layers, the company is too bureaucratic, and it takes too long to get things done."
Note: this comment comes from the woman ranked number 22 on Fortune magazine's list of the “50 Most Powerful Women in Business” and number 41 on Motor Trend’s “Power List” of the industry’s top 50 execs. Meanwhile, further down the food chain, Ford is slicing 14k white collar workers from its North American payroll. That’s one-third of FoMoCo’s entire white collar staff. At the end of this process, Nicole Richie will have more fat than Ford’s management structure– leaving them with lazy, slow and stupid.
The Machiavellians amongst you might disagree, imagining the bloody hand of freshly-minted Ford CEO Alan Mulally behind all this, taking comfort in the carnage, predicting that a new, more market responsive corporate regime will follow. It’s certainly true that the best way to “cure” a diseased corporate culture is to knife as many slackers/potential enemies as possible, erring on the side of excess. But one need only consider the timing of the cuts and look at the top of the pyramid to conclude that it’s business as usual down in Dearborn.
The latest round of white collar cuts was announced prior to Alan Mulally’s arrival. That’s just plain dumb; even if Mulally didn’t swing the axe, he should have at least looked as if he was swinging the axe. Does the executive who appointed Ford's thirty-five million dollar man care? Obviously not. And what does that tell you about Billy Ford? My take: Bad Billy’s inability to walk away from the family firm he’s been running into the ground makes him part of the problem, not the solution. The fact that Baby Face Mark Fields– original architect of The Way Fordward and twenty-minute heir apparent– is still wandering the corridors of power is equally troubling.
All of which raises the single most important question for Ford’s future: who’s in charge? I Don’t Know is on his second executive savior and third way forward. Someone’s at FoMoCo’s got to sort out who does what first. The second they figure that out, the country’s third largest automaker can stop making so many product decisions that come straight from left field. Then they’d have a chance to sort out their corporate culture and start building desirable products in a timely fashion. Which is why Detroit's chattering class is waiting for Alan Mulally to step up to the plate and knock someone's head off.
He better. Not to put too fine a point on it, the only way to motivate people is fear and greed. God knows Ford’s tried greed. For decades, they’ve paid off the unions. For decades, executives have failed upwards. For decades, the top dogs have enjoyed gold-plated pay packages and plenty o’ perks– regardless of their performance or lack thereof. Greed’s done. It’s time for fear. It’s time for a ruthless leader to step forward who’s ready, willing and able to excise the weak-willed in his ranks. When you hear Billy Ford mumble the words “Et tu, Brute?” on his way to a comfortable retirement in, say, the Maldives, THEN you will know that Ford is truly ready to move forward.
I find it amusing that the first ad in the list next to this editorial is for Ford Vehicles, more specifically innovation. (These ads are rotating, that’s just what I saw the first time.) Even bad press is better than none I guess.
God bless the new media. God bless Google.
Ha! Culture Club.
Billy asks Alan, “Do you really want to hurt me?”
When you here Billy Ford mumble the words “Et tu, Brute?†on his way to a comfortable retirement in, say, the Maldives, THEN you will know that Ford is truly ready to move forward. Powerful imagery!
Seems like a large part of Billy Boy’s problem is his inability to make and stick to decisions, as the management consultant’s experience indicates. For example: First Ford was going to make 250,000 hybrids a year by 2010. Then it discovered that OOPS maybe that was easier said than done. Better just to talk up flex-fuel and sit on their collective hands.
Right now Toyota owns the hybrid market (78% of hybrids sold in August was Toyota or Lexus!). You may think Ford should take them on, or you may think that Ford should avoid that segment of the market like the plague. Regardless, Billy Boy should have thought this through before he made the 250,000 pies in the sky announcement.
Management going backwards and forwards like that really kills morale.
Here’s my plan of bold way forward moves. For free. You don’t even have to pay me, however you probably need to spend a few dollars on re-tooling and implementation. 3 steps:
1. build desirable cars/trucks. Don’t build more than will sell.
2. sell said cars trucks. All of them.
3. profits.
Now I’ll leave the details of implementation to those high paid college educated executives.
Like every time I get bad service at a restaurant, I think to myself: “Gee, how hard can it be? Take the order, Cook the order, server the order?”. Building desirable cars is not like sending people to space (and safely bringing them back) nor like curing cancer.
The people in charge are not car people though. They probably don’t even drive. The designers and engineers probably have no say in their own field. All power to the bean counters.
The mind set of “If we remove ONE olive from each serving of salad, we’ll save thousands per year” has got to go. Let the car people design the cars. Re-arrange your business AROUND car design and building. Let everything else be 2nd priority.
Sorry. I got carried away. That won’t happen.
Haha Farago- with that few Ford execs and the coming retirement of baby boomers, there is prob. a job waiting at ford for you!!!
With Ford gutting their white collar workforce, I would think it will further cripple their ability to design products in the United States. That means more crappy copies of lame Volvo’s, Mazdas, and old Ford of Europe designs, which is basically all their automobiles have become.
First they got rid of all the old white guys in design and engineering when Nasser was there, and now they are getting rid of anybody who is left that might have a clue because they probably make too much money. Just farm out more work overseas.
Meanwhile, Toyota and Honda are rapidly expanding their design and engineering in the United States.
Ford is in trouble because they forgot who they were, and now their customers have forgotten about them. If I wanted a Volvo or Mazda, I’d buy one. Only now Ford won’t give you a choice, so people are walking.
I don’t get it. Isn’t Ford one of those companies that have been around for over a century? Haven’t they built MILLIONS of cars over the years?
They why in the world whenever they introduce a new model, they never ever get it right?! The interior’s screwed up. It got the wrong motor (“we’ll get the right motor in there NEXT year”). Somebody mistakenly put 17 million left handed nuts on 17 million right handed bolts, and they all have to be recalled. They (and the other 1.5 as well) act like they never manufactured a car before.
It’s ineptitude like this that has gotten them where they are today. They could get away with this when they were the only game in town, but not when the imports are threatening to take over the American auto market.
It was just today that I realized Wee Willie Ford is also the chairman of the Detroit Lions and is the man who hired Matt Millen, Marty Mornhinweg, and Steve Mariucci.
This is somehow significant.
It is usually the case that one can laugh about layoffs at a company, unless you or someone you know works there. What I read about Ford pains me, not only because my deceased father once owned a ’51 Ford Crestline coupe and later, a 1957 Ford Fairlane 500 two door hardtop, but also because a true gentleman named John Clinard has been someone I’ve had the privilege to know since 1997. John represents the Public Affairs Department of Ford, in its Irvine CA office – or did, last I heard. John is a true “car guy” having once had a piece published in Road & Trackon a part-time job he had, while in college, delivering Italian exotics. John was one of those people I don’t call “a flack.” He has always been helpful and “hands off” on assisting with press fleet cars, trucks and SUVs, and even once, proof-reading something I did for Old Cars Weekly on the history of concours.
A few months back, C/D did a piece on the “cars that could save Ford now!” (their emphasis). I thought the Ford Futura station wagon concept was an ideal way to move from selling SUVs to usable and relatively fuel efficient internal combustion engined vehicles.
In May, I drove a Mercury Mariner hybrid. I was impressed by it, most especially how at 25 mph and less, it ran on just the electric motor – a perfect city car. Admittedly, some of the key pieces of that technology were licensed from Toyota. But at least Ford was going in the right direction.
I still like to believe that there is hope for Ford – and I sure hope for my friend, John Clinard. (No, I don’t believe in Santa Claus or the Easter Bunny. But I try to believe in a Higher Power.) Ford needs people like him, to steer them through this time. Mulally should call Clinard up as soon as possible and pick his brain. I sure hope someone at Ford reads this and passes that along.
tms 1999 sure got it right “Building desirable cars is not like sending people to space (and safely bringing them back) nor like curing cancer.”
I’ve often thought jesus, what is the problem! All they have to do is buy examples of excellent autos (civics, 3 series, camrys, whatever) and there are the answers right in their god damn faces! How easy that is compared with drug research, for example, where the poor bastards have to create new drugs to treat disease, or physicists that have to determine how to get something to Mars, etc etc.
So this failure of the domestic makers is even more shameful, they have the answers right in front of them and simply can’t implement the actions needed to make decent cars. shame on them.
Hahaha.
My lord, the Google ads are hilarious. Methinks Google should try and do more than just scan for relevent words.
I can’t help but feel a deep sadness. The names of the American car companies, and for me especially Ford, are part of me and the collective unconscious. My current daily driver is a Focus. My previous cars have been two F-150’s, a Bronco II, an Explorer, an Escort, and a Mustang. See a common thread?
I’ve grown up on Ford, the name has always been in my driveway, and in a few weeks, it will disappear. I just can’t bring myself to buy another. I feel an honest-to-God sadness about this. I want to buy another Ford. I really do. It’s a big hunk of Americana, for me.
I think buying a Ford out of sheer emotion and, perhaps, pity, would only be doing Ford a disservice. It would only allow the horrid beast that the company has morphed into to continue. I seriously hope that, someday, they get their shit together and a Ford fills my driveway again.
I haven’t bought an American car since college, but I rent them on a pretty regular basis. The thought that always comes to mind is “doesn’t anyone who can make decisions at the car company ever drive one of these things?” This is 2006. How difficult is it to make a seat that’s comfortable to sit in for more than the first 25 miles? Why does the plastic on the dash have to look like it came out of a model airplane kit? Why does the fake wood have pixels big enough to see from two feet away?
I can only figure that the cultures in the Detroit companies are so insulated that they still are not convinced that buyers notice this stuff. I have no doubt that what I call the “point A to point B” vehicle owner (“all I care about in a car is that it get me from point A to point B…blah blah”) is oblivious to these issues, but how does a company expect to thrive by catering to the oblivious? At some point or another every oblivious vehicle “operator” (they’re not really drivers) is going to ride in a Honda or Toyota and notice the difference — and like it. Add one more customer to the list of buyers who won’t touch an American car.
I’ve got to agree with postman and Phil. If they can’t fix problems that are this obvious after this much time, there’s no hope for them.
According to Google, the solution to Fords problem is the Dodge Neon. Who would have thought.
Can anyone explain to me why they can’t just make european product here? How can a redesign of an existing (and very cool) model cost more than a completely new vehicle?
Guys, let me tell you first and foremost, Ford’s culture problem is HR.
I recently jumped ship from the glass house before the glut of white collar engineer resumes started floating around, making it damn near impossible to find a job. I was “assured” of losing my job by one of these HR nutcases, the same nutcase that told me that quitting Ford is “insane” and that “you’ll have mental problems if you leave Ford as it is now” because “you must have something else in your life that is going wrong to want to quit Ford.” As if $1.5 billion in losses wasn’t enough to scare the crap out of me.
HR protects these benevolent megalomaniacs through a process called performance reviews. All you have to do is play nice, and performance doesn’t count. There are five different choices for overall performance at the end, and one of those has five rankings of numbers. For example, the “second best” rating you can get is an Excellent Plus (EP), and you get rated EP 1-5, so if you do the math, you can have up to 8 different performance rankings!!! 8!!!! Oh, and I forgot to tell you, anything under an EP 1, forget about your job, which pretty much leaves 6 rankings good, 3 rankings bad, not a bad percentage to keep your job, no?
As I watched the decline of the company, two things came to mind, “how could these white collar people lose touch with normal Americans” and “where does Ford find these nutcases to run HR”?
Forget the mistimed products, the bad quality perception, the gas price “problem”, and a myriad of management out the door. The TRUE problem inside of FoMoCo is HR, the people that keep the status quo…
And there you have it.
I worked at an assembly plant in Canada for about 10 years, granted it was a while back,but did 5 years on the line and 5 years as a Supervisor. It was quite an eye opener about how badly you can screw up in business if you have enough capital. And the “Cover Your Ass” business philosophy comment really brough back memories. When I went for my 10 day supervisory training in Dearborn, the first 6 days were all of what you would expect. On the 7th day, the instructor walked in, took a big piece of chalk, the kind weathermen used to use, and covered the blackboard with 3, four foot high letter CYA. He asked the class what that meant, and of course know one spoke up. He went on to explain, he liked to called the last few days, the Cover Your Ass portion or subtitled Survival In The Ford Motor Company. It took me a lot of years to realize just how right he was, and even now I find it incredulous that somebody actually let that go on.
After a few years it became apparent that the only vehicle that Ford managers cared about was the company as a vehicle to drive there own careers.
Is this about Ford or GM?
It is about Ford, but I did a stetch at GM as well as a supervisor more recently and it would apply just as well.
At my job (and I assume many other readers’) I am expected to help my employer when needed. Last weekend this meant staying up from Friday to Sunday morning to get a big project done.
Ford employs thousands of people, if the media (who may know what they’re talking about) just keeps shouting “PRODUCT PRODUCT PRODUCT!” What is stopping them from pulling all employees away from lesser tasks, cancelling vacations and focussing on getting new products out?
Ford certainly has a talented pool of people to use including PAG, you think they could put their heads together and find a solution for their car problem in a few weeks. If the problem is interiors can’t they just call someone from Jaguar or Volvo to come over and make suggestions on how to improve it? As the news continues to get worse, months of switching around jobs and changing announcements become inexcusable. This isn’t like curing cancer and it seems Mr. Farago is right a lot of the time, so why not listen to him or his readers? Are our ideas any worse than those idiotic Mercury Mariner commercials, “put Mercury on your list,” do they really want people cross-shopping Mercury to Honda, Toyota or VW?
K.
Most of the above is true. CYA, management completely oblivious to the real world, run by a bunch of inbred U of M MBA’s, giving the store away to the union and on and on.
In reality though it isn’t as nearly as easy as you guys think to get a car from concept to dealer. I’m not defending Ford, they suck. But you can’t imagine what it takes to complete the task. Obviously it can be done well – several companies do exactly that on a regular basis. Ford and GM don’t have a snowball’s chance from what I see.
It’s only getting worse. You can’t cut 1/3 of your salaried workforce and not have the F*&^king wheels fall off the cars. All that will be left is Marketing and STA (Supplier Technical Assistance.) Problem is these guys have helped anyone that ever knew anything about building a car out the door, so they hire people from an appliance manufacturer (certified 6-Sigma, however) to “help” suppliers. Ford is pushing everything down the chain onto suppliers, thinking they’re saving money but there ain’t no free lunch.
Mr. Farago, i must say you hit the nail on the head, the way this reads is just how FoMoCo operates. Trust me i’ve seen it first hand. If Mr Mulally wants to turn Ford around he had better “Bust a Move” & do it NOW….. I’v seen so many of the “take-no-chances, pass-the-buck, cover-your-ass management people ” do nothing & get promotions, more money etc. it makes me SICK…. The best thing they do is after these folks retire is they, FoMoCo calls them back & pays them more money to be consultants….. they couldn’t do it the first time…..so lets call em back & let them drag everyone else down into the quagmire…… Don’t get me wrong as people most of them are good people but they don’t need to be here, they need to be at K-Mart as greeters, or this is a novel idea RETIRE somewhere & get a life.. So Mr. Mulally you had better have some BIG BALZS & make some BOLD MOVES NOW or you ain’t gonna be much help…
Hey – the Mariner spokes-chick person is unbelievably hot. This is the only thing Ford has done right in decades.
Save Mercury! Keep the brunette!
I was talking to the 14 1/2 year old son of my buddy this morning when I drove him to school, he’s kind of a car guy. Mom & dad had to leave town early this AM / no bus service.
Alex is a bright kid, and we (of course) talked cars. His assessment was that the big 2 1/2 are all crap, they are going down the pan and the first one to flush is going to be Ford. His dad is a real car guy and a GM buff, well, he says “at least they’re cheap to fix” all the time (to which I always reply “why buy a car which always breaks down when you can buy one which doesn’t, just because the ones that break down are cheap to fix yourself?!”). Alex’s dad is coming around; he just surprised the heck out of me and bought a Honda
CR-X for his wife! I nearly fell over when he told me on the phone. (Getting smart in yer old age, huh, buddy?)
I always figured GM would tank first, but I’m beginning to see where a lot of people may be absolutely right about “DORF Motor Company” (“Ford spelled sideways = DORF!”)
My first personal experience with Ford was a 1975 Pinto which wore one of it’s cam lobes round and which Ford motor and the local dealer absolutely refused to repair. After the repair was done (at full cost), the cars were recalled – but despite a lot of hassle on our part (my father and I), neither the dealer nor Ford reimbursed a SINGLE PENNY. Needless to say I did not buy another DORF for, oh, 18 years or so. When I did, I was moderately satisfied with an early Taurus, but then when I tried a used Lincoln Towncar (first year of the OHC V8), it was such a POS that I’ll never go back.
My father WAS a Ford man, even quit Buick and went south to get a job at Ford in the 1950’s, and HIS last new Ford was a 1960 Falcon. The only “Ford” product he has bought since then was a Mercury Villager (which is actually a Nissan). 1959-1960 was about the time my dad left Ford and building cars behind.
OK, there are at least 400 billionaires in the US, per Forbes. Ford has a $15 B market cap. Now, isn’t there some bored billionaire out there who could just buy Ford outright (or even just 60% of it), take control away from the Ford kiddies once and for all, and then just start kicking ass and taking names, uninhibited by power struggles, bureaucracy, and lack of support?
Make some quick big-huge major changes wth clear lines of accountability, and fire everyone who does not accomplish their change in the brief alloted time. Sell the foreign brands and delete Lincoln and Mercury. Hell the whole project might implode but it would be nice to see someone with some nads take action.
Wouldn’t that be cool?
Agree on the Mercury “spokeschick.” Good move on their part.
It is such a strange commercial with the subliminal Wild Oats advertising where she goes to the Mercury (black and white leather) with the golden retriever. First, she left the dog in the car while shopping. I don’t fear for that pooches life on the soundstage, but why is it in there at all? To demonstrate the Mercury can accomodate a dog as well as groceries and a driver? I assume this ad is aimed at a lot of the type of women I know with the dogs and organics. Do they realize that yes they will buy a Ford product (Volvo V70/XC70/XC90) or Range Rover, but no way would they every consider Mercury?
If I am not mistaken, they don’t even mention the Mercury comes in an available hybrid option in a commercial with Wild Oats and retreivers?
K.
Worse yet, where do you think all of the best engineers at Ford and GM are heading? RF said it best, the only people left after this round will be “lazy, slow, and stupid”
ex-Ford & GM folks were last seen headed for Nashville, to create their own fiefdoms and beauracracies at Nissan North America. Spread the pain, I suppose.
Jill Wagner, the Mercury spokeswoman, has reportedly made a big difference in perception and not a small one in sales. I certainly can’t help paying attention, must have something in the brain that has to do with brunettes.
Speaking of ad campaigns and persuasive brunettes, Maria Silvia, “Queen Levitra”, was a major hit at work (healthcare).
http://www.post-gazette.com/pg/05070/469677.stm
Lots of interesting points:
-Who’s more likely to hang on at Ford? The people with the talent and intelligence to get jobs elsewhere, or the people who are just there for their paycheques?
-taxman100: Quite honestly, Mazda and Volvo are both putting out much more appealing vehicles than Ford. If all Ford was doing was rebadging the good ones, they would be in a much better situation than they are now.
-Why the hell hasn’t anyone high-up at Ford said: “Until we stop losing money, every white-collar worker has to drive nothing but pre-release versions of our upcoming vehicles.”? For example, in the months leading up to the Fusion’s official release, EVERYONE should have been driving it, and constantly providing feedback. It could have been such a hit, they certainly got the looks right.
Right on the money R.F .As g48150 and Daro31 point out it its disheartning to deal with on a daily basis.The culture you describe is identical at G.M.
I only see what goes on at the low level I shudder to think the same thing happens higher up the ladder.
On a personal basis I am not gonna retire[I d’ont trust the pension plan] I not gonna make any big purchases [like a new car]and at work I practice C.Y.A
Sure, Ford has a bloated, dysfunctional bureaucracy. Sure, HR needs a radical makeover. Sure, Bill Ford has not shown himself to be a competent manager. Sure, more accountability should result in better performance by all Ford employees, from top to bottom. Sure, Mulally needs to establish his authority – and quickly!
However, the problem with simple solutions is that they can make complex, interlocking problems worse. For example, Robert Farago argues that “the only way to motivate people is fear and greed†. . . and greed has been tried and failed. If Mr. Farago did some research into organizational behavior he might find a much richer debate about motivators than what he allows here.
Consider, for example, Total Quality Management (TQM), which is built around the idea that continuous improvements can be most effectively achieved if managers “drive out fear.†I’m NOT arguing that fear is never an effective motivator, let alone that TQM is God’s gift to management science. But if the ultimate goal is for Ford to design and build great cars, do folks really think it is most likely to happen during a corporate reign of terror? Or when a certain esprit de corps has been cultivated – as apparently occurred when the first-generation Taurus was developed?
I don’t want a “ruthless†head of Ford. I want someone who has the wisdom to know what to do, and the courage to not stop until the job is done. If I were a talented Ford designer or engineer, why would I go to the wall for a mere henchman?
To a large extent these discussions of Ford and GM revolve around generic organizational problems that have been around for a long time, keep in mind the Parkinson Laws date back to the mid-50s! Gee, once the entrepenurial force is spent the bureaucrats end up running the firm. Early retirement offers always appeal first and foremost to the most talented, leaving the desk riders to run the resultant smaller firm. The work amount won’t decrease by the 1/3rd reduction in work force, so the work will (not) be done by the remaining mediocre force. That ought to work. To us outsiders, what Ford needs most is innovative entrepenurial leadership, but Mr. Ford can’t allow those persons in, so a series of high end and expensive professional bureaucratic managers will be brought in until such time as the firm essentially implodes. And some wonder why these are called “Death Watches”.
The following plan provided above is nice and simple, but will only work in a post bankrupt world since there are too many cost constraints (UAW, health care, etc.) in doing this at Ford or GM today.
1. build desirable cars/trucks. Don’t build more than will sell.
2. sell said cars trucks. All of them.
3. profits.
I understand why auto manufacturers try to skimp on equipment where they think they can get away with it. A loose application of economics teaches us that all products are desireable at some price point. I submit that the Ford Fusion would handily outsell the Camry if ithe Fusion were priced starting at $9999.
The problem, as I see it, is that Ford (and GM) make so many cost trade off’s when desiging and manufacturing their new models that the desireability drops, and with it, their ability to charge more for the products.
So, I think the 2.5 know more about what to build than we ever see, because they can’t talk about the trade-offs made along the way to make the vehicles profitable. In the end, I’m saying Ford and GM can master 1 & 2, but doing them such that it all results in profit is the trick.
As an example, consider full size pickup trucks and SUV’s. Plenty of profit margin so the teams are free to design and build what the market wants.
OK, OK, I’ll try . . . though in a LOT fewer words.
1) Your info on the Ford PR system is inaccurate. The system is basically the same as in any other big company I’ve seen (I’ve worked at a few, and as a consulant at several more). Only major difference seems to be a large number of ‘bad’ ratings of various degree . . . these to me are a sign of paranoia, allowing you to progressively document declining behavior to help justify a release or demotion. Why do you think you need more than half of your ratings devoted to poor performance?
2) Not every ‘talented and intelligent’ person is jumping ship. Contrary to punditry here, many people believe the company will not only survive, but come out stronger . . . and there will be plenty of opportunity for those who survive the turmoil. These people have something called ‘loyalty’ . . . look it up. Anectodally, I’ve pretty much seen mostly the ‘dead wood’ stand around discussing taking their offers. The majority of the good ones are picking up the slack and trying to make themselves more valuable.
3) Your overly simplistic answers are really the pinnacle of internet bloggery . . . by advice to you? 1) Borrow $2Billion; 2) design and build a Toyota killer; 3) sell it and get rich. Sounds easy . . . bet it’s not. The big problems in life usually are not. There are no easy solutions, and no easy explanations as to how we got there. I bet that if any one of you were put in charge today, you would not do any better, and would likely do worse. And if you were put in charge 10, 20, or 50 years ago . . . you’d likely make the same bad decisions or worse. Not a slam on you . . . just a statement of reality.
4) The comment ‘Fusion would sell if priced at $9999’ shows why your simple answer will never work. That’s a pretty ridiculous statement . . . from what I’ve seen written it’s a pretty well-received car, and is selling better than planned. This site does a good job of pointing out the foibles of the domestics and their management, and how these are helping bury them. But it should also acknowledge the overly dramatic attitude as stated above and how it’s also a mighty bit shovel.
Whew .. ..
Ar-Pharazon, but your third response is not correct.
3) Your overly simplistic answers are really the pinnacle of internet bloggery . . . by advice to you? 1) Borrow $2Billion; 2) design and build a Toyota killer; 3) sell it and get rich. Sounds easy . . . bet it’s not. The big problems in life usually are not. There are no easy solutions, and no easy explanations as to how we got there. I bet that if any one of you were put in charge today, you would not do any better, and would likely do worse. And if you were put in charge 10, 20, or 50 years ago . . . you’d likely make the same bad decisions or worse. Not a slam on you . . . just a statement of reality.
Business is quite simple: build/sell a product that people want at a fair price; provide a service people would utilize at a fair price. Period.
It’s easy to demonstrate how Ford found itself in dire straits. Basically, gas prices rose dramatically and Ford’s product line was SUV and truck heavy. Ford eschewed the small and midsize car market in favor of trucks and SUVs. They do not have a balanced product line.
Fault: Ford management.
Sounds like you are making excuses honestly. “Oh, the problems are sooooo complex, mere mortals, that is to say, those not in the car industry, just would not understand….”
Toyota, Nissan and Honda seem to be doing ok in today’s market. You need to ask yourself why.
ktm . . . thanks for the comment. I guess I didn’t really state my point clearly enough. Regarding the current situation . . . my point is that while conceptually the answer may indeed be simple, it’s usually not that easy to ‘just do it’. Here we sit, in our current situation . . . product pipeline is empty, development cycle takes three years plus, etc. We won’t debate how we got here . . . that’s not the issue right now. At this point, ‘build a desireable car’ is just not something that can be done at the snap of a finger. Designs don’t appear by magic, factories and tools don’t change over for free, etc. There are regulations to be met, and existing investments to utilize, and obviously plenty of fixing to be done in the culture and the processes. Any large business is much more complex than it may appear to a casual observer, and sometimes implementing a simple strategy can be surprisingly difficult to actually do effectively and quickly.
As a timely example . . . there was plenty of grief over the disconnect between upcoming share and capacity in Ford’s recent announcement, particularly by the expert Wall Street analysts. Sounds very simple . . . if you plan on selling X million vehicles, then you better have X million capacity. But . . . actually, the tools capable of producing Y (>X) million vehicles are paid for, and spread over a larger number of plants (that btw are also paid for). The main cost at this point is the labor and other variable cost needed to actually run the plant . . . and the plan is to run the plant only as much as needed. Consolidating the tools for existing designs into fewer plants — which would need to be modified to accomodate them — would certainly cost more money. So, it makes more sense in the shorter term to leave open more plants, which LOOKS like leaving excess capacity due to lack of will or intelligence. But it’s not . . . it’s a complex answer to a seemingly simple question.
So . . . my point is that you shouldn’t assume that people just can’t see your simple solution though it’s right in front of their face. What they perhaps can’t see is the best way to actually implement that solution while keeping the ship afloat and relatively stable in the process. It’s that job that I believe would be a difficult one for just about anyone to do. Undeniably, the Japanese companies have kept their ship moving in the right direction for years, and are therefore in a much better position than any domestic. But I sincerely doubt that if you transplanted the entire management of Honda or Toyota into GM or Ford as they exist right now, they’d be hard pressed to pull off any quick change miracles.
None of this is meant as an excuse for past mistakes. But those past mistakes cannot be ‘unmade’ at this point. The question is how best to deal with the situation they put us in.
Also a bit on my comment about taking the place of domestic management 10/20/50 years ago . . . I have to say that I stand by that comment. Most of the posters here seem to be well in favor of the good old capitalist, individualistic vision in favor here. Thus, I believe that put into the same situations, most would make pretty much the same decisions as past US auto management . . . or, for that matter, unions. If you were in charge and bringing home multi-million dollar bonuses by making shitloads of trucks and SUVs, and all your competition was hustling to design and build more and more of the same, and most or all of the projections said that the market would just keep building, and you didn’t make any money selling cars . . . are you really telling me that you would have been savvy and farsighted enough to say “stop the insanity . . . put a cork in those profits and start designing cars!” I must say that I doubt it. Remember . . . the Japanese already had small cars for their home markets. For the past decade plus they have been frantically playing catch-up in trucks and SUVs. If the trend had continued for a few more years, they would have been just as truck-heavy as the domestics, don’t you think? While it might seem like the ultimate in foresight and planning, in fact they were just lower down the truck transition curve and thus were better able to put on the brakes and revert back to the cars that they already sold at home. Remember, Toyota is in the process of opening a huge truck plant in Texas.
The same holds for unions . . . imagine yourself as working on the line 20 years ago, supporting your family, cabin up north, boat, snowmobiles, the whole shot. This is your life . . . it was also your father’s, and your grandfather’s, and your brother’s too. Your union rep comes up and says “here’s the new contract . . . we got you a clause that prevents them from ever laying you off! If they try to do it, they’ll have to pay you anyway . . . that’ll keep’em from moving your job to Mexico. Oh, and by the way . . . we also got you a raise and a better vision plan.” Are you going to refuse to sign it, and in fact walk out the door because you’re not ‘greedy and lazy’? I strongly doubt it.
There but for the grace of God go you . . .
Man, this sux, again. Again I composed a nice reply, and again when I hit ‘submit’ the whole darn thing vaporized. What is up???
God, I hate this . . . again I’ll try to recreate what I just spent 30 minutes thinking about and writing . . .
ktm . . . I articulated point 3 poorly. Perhaps I can try again by saying that simple solutions often have very complex implementations. Or . . . ‘easier said than done’. Not just for automotive industry, but for any business. Neglecting for a moment how they got there, think about how to actually get out of the situation that the domestics are now in . . . designs don’t materialize by magic, and factories don’t change over for free, and financial obligations don’t just disappear by force of will. I bet if you dropped the entire management of Toyota or Honda into GM or Ford on Monday, they would not just miraculously turn the place around and start building hit cars. So the simple high-level strategic answer is really no answer . . . the devil is in the details of how to actually do it. Just as I would not be right in making an excuse for the domestic’s management, others are also not right in implying that they are all dunderheads too stupid to see the obvious answer right in front of their face.
Take the recent announcements on Ford’s capacity and projected market share. They were attacked by Wall Street and the pundits because the ‘numbers didn’t square’. What . . . can’t they even add? Shows how stupid they are . . .
But wait . . . the remaining plants and the tools are paid for, and all actively involved in making products that are planned to sell given the projections. The main cost is the variable . . . mostly labor but also any cost of actually running the plant. And the plan calls for the plant to NOT run if it’s not needed (and to reduce the workforce accordingly, to deplete the jobs bank). So explain again why Ford should spend money to remove tooling from plant A, move it to plant B, modify plant B to accomodate it, and install it there? This all costs money, remember . . . why spend it now? But that’s a rather complex answer to a ‘simple’ question. MAKE YOUR CAPACITY EQUAL YOUR VOLUME! Yes, but . . .
Also regarding the the bit about making past decisions. Let’s fall back a decade or so . . . you’re a domestic VP, and you’re bringing home multi-million dollar bonuses by selling a bunch of trucks and SUVs. They’re all selling like mad . . . people LOVE them. All your competition — Japanese, German included — are scrambling to design new trucks and SUVs and trying to eat your lunch. Pretty much all the projections you see say that this isn’t going to end soon. But wait . . . you suddenly have a mad fit of foresight and say “wait . . . no more trucks . . . gas guzzlers . . . must . . . build . . . small . . . cars”. Damn the profits, full speed ahead. That’s what you would have done, right? Right? Bet not . . .
Oh . . . but the Japanese did it, didn’t they? Well . . . in fact, they historically had pretty much nothing but smallish cars, since that’s what they sold in their home markets. They were pushing like mad for the past decade to catch up and pass the domestics on trucks and SUVs, in case you didn’t notice. It just happens that they still hadn’t quite caught up and were particularly far down the large truck transition curve, and thus were not YET as biased towards them. I bet that if the war and the gas price rises hadn’t happened and the truck trend had continued for a few more years, the Japanese would be just about as heavy in the truck department as the domestics are now . . . remember, Toyota is opening a pretty huge factory devoted to big-ass gas guzzling Texas-sized trucks just about now. Since they hadn’t yet grown into the market, they were able to pull the plug and revert back to the existing car capacity and come off as market gurus. I don’t believe that’s the case, though.
Same can be said about the unions. If you were a UAW worker 20 years ago and your rep told you about the jobs bank clause, would you have quit on principle, because you’re not ‘lazy and greedy’? Again . . . I think not. I think you would have shaken his hand instead.
There but for the grace of God go all of us . . .
Ar-Pharazon, I agree 100% that it is easier said than done. As I stated earlier, its the implementation of the simple idea that is difficult. However, it does not change the fact that Ford simply needs to build cars that people want. They have to do it for their long term survival. Anything they do now is akin to placing a band-aid over an arterial cut.
The Japanese have not eschewed their core product line unlike the Big 2.5. Nissan has the Titan, Frontier, Armada, Pathfinder and Xterra. However, it also has the Maxima, Altima, Sentra, Versa, 350z, and Quest. They branched out into the large car and truck/SUV market based on the sales of their cars.
Ford, GM and DCX gave the small and mid-size car market to the Japanese and said, “We still have the truck and SUV market….” Rather short-sighted. Did they not think that the Japanese would eventually build large trucks and SUVs?
I do not fault the workers for signing the union contracts. As you said, they would be stupid not to. However, times have changed. It’s unfortunate I agree, but archaic business models and contracts must be revamped if these companies are to survive. Again, simpler said than done, but it must be done.
3) Your overly simplistic answers are really the pinnacle of internet bloggery . . . by advice to you? 1) Borrow $2Billion; 2) design and build a Toyota killer; 3) sell it and get rich. Sounds easy . . . bet it’s not. The big problems in life usually are not. There are no easy solutions, and no easy explanations as to how we got there. I bet that if any one of you were put in charge today, you would not do any better, and would likely do worse. And if you were put in charge 10, 20, or 50 years ago . . . you’d likely make the same bad decisions or worse. Not a slam on you . . . just a statement of reality.
Give me the shot.
I’ll prove you wrong.
Methinks pharazon works in the Ford HR department, his Type A personality shines right through!!!
I can say anecdotally that Ford has failed many customers many times.
There is the case of a co-worker and good friend of mine who lives in Knoxville, TN. I went to visit him years ago and the three Toyota Camrys parked around his house caught my eye immediately. I joked out loud that his is the Toyota Camry family. His wife said they used to be the Ford Taurus family, but they got sick and tired of rebuilding their Taurus’ one component at a time as everything in these cars failed like clockwork. He pointed out there are actually four Camrys in the family, their son was not at home at the time.
Then there is another co-worker friend of mine who lives in Chattanooga, TN. He bought a new Ford that had a defective brake master cylinder; the pedal would sink to the floor. The Ford dealer told him “they are all like that.” He had to beg the Lincoln-Mercury dealer with a desperate “I haul my family around in this unsafe new Ford” plea to get a warranty replacement from Lincoln-Mercury, which they very graciously did for him. And this is a guy who used to talk all the time about FORD like it was the best car company on Earth.
What is most telling about what other people are saying is what they are not saying. I do not hear similar stories being told to me by Toyota and Honda owners. What I hear from the T & H crowd is how much better they like their cars over Fords and GMs. I have never heard a Ford owner tell me how much better they like their Ford over their former T or H. I am not saying it never happens, I’m just saying nobody has told me this. (I live in a town where many brands of cars are sold, but here is no T or H dealer here. The T & H crowd have to go out of their way to purchase their vehicles.)
There is a reason for this shift in market share from FORD to Asian brands. This is not because of “perceived” better value. It is because of actual better value.