Alan Mulally has publicly admitted the possibility that his employer may– indeed might— go belly-up. Automotive News reports today that they asked FoMoCo's CEO if his employer will survive. "Don't know — race against the clock. Are we working on the right things? Absolutely. I've been there. I've seen this movie. I performed well in it. I know exactly what to do. Do we have enough time? No idea." Arriving hard on the heels of this weekend's Ford – United Auto Workers' (UAW) agreement, Mulally's startling statement could be seen as an attempt to convince Ford's rank and file to ratify a contract which may not contain job guarantees. If so, his post-admission theatrics were suitably dramatic: "The more you worry about worrying, as opposed to worrying about doing, then you're going to put this at risk," he said, slapping a piece of paper on which he'd sketched elements of his turnaround plan. "So let's just do the goddamn plan." Of course, the date of AN's pow-wow with Big Al is the critical piece of information in this regard: October 26. That's 17 days ago. Why did Automotive News sit on this bombshell until now? Did they agree to an embargo? No matter how you look at it, this one stinks.
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Things do look shaky at Ford (Yay!). But it’s not all over, yet. They still have the sale of Jaguar and Land Rover to rake in a few billion and Volvo (an extra few billion there). That would be more than enough to add to research and development to better cars. Plus, they could employ stylists from Ford Europe to help make their cars look better.
I think Mulally is trying hard and maybe, he’s realising the gravity of the situation, but it’s not over for him. He still has plenty of options open to him.
I mean, he could sack Mark Fields for instance and bring someone in who KNOWS what they’re doing. Maybe they could poach someone from Toyota, a la Chrysler…….?
Although Mulally seems to be the saviest CEO of the big 2.8, I think he has the biggest fight.
Ford has exactly no hot product right now. None. The near future doesn’t look good either. (The Flex? C’mon!)
Land Rover and Jaguar could very well cost money to sell, and Volvo just isn’t as hot as a property as some people believe, especially once it loses its connection with Euro-Ford and Mazda.
GM and Chrysler both at least show some signs of life, but Ford is just about flatlining right now.
Actually, KatieP, I remember Ford was hiring/poaching a Toyota exec: http://jalopnik.com/cars/industry-news/another-jim-leaves-toyota-farley-goes-to-ford-309826.php
then I guess they appointed some guy, Ray, as the Communications VP 13 days later (unless Marketing and Communications VP is COMPLETELY different than Communications VP): http://jalopnik.com/cars/industry-news/its-ray-day-at-ford-314731.php
Blunozer : “Ford has exactly no hot product right now. None. The near future doesn’t look good either. (The Flex? C’mon!)”
I don’t know about the Flex either—-but I do take into account the opinions of those I know and respect. In fact our own Robert Farago (in a non-TTAC review) recently listed the Flex as one of the hot products to watch in 2008. I look forward to seeing the Flex in person.
Bankruptcy is in Ford’s best interest. It can no longer support its huge network of dealers, factories, union gaurantees with its ever decreasing market share. The Detroit model is no longer sustainable – design it cheaply, and build more b/c customers will always come.
As for selling Jaguar and Land Rover – Ford will not make any money on that deal and will only be happy to get rid of those money pits (those assets are all mortgaged up to their necks too). Only Volvo would probably make them some money – but the technology and platforms Ford gets (free R&D) will significantly hurt them in the long run.
Detroit is in the situtation they created through terrible, short sighted, and obtuse management. This poisonious train of thought and misguidance is not the skill set needed to right the ship (this group were the idiots who chopped down the main mast for firewood and alienated their people who in turn can and will mutiny at any time they feel fit).
“Bankruptcy is in Ford’s best interest. ”
Due to internal politics Ford is going to have a very hard time entering Chapter 11 reorg. on it’s own initiative. The influence of the Ford heirs is an ongoing poison in the stew which will be hard to excise. Bankruptcy would most likely take the value of the family’s shares to zero as well as those of all the other shareholders. Maybe some of the poor buggers would have to learn how to get an honest job.
The disaster scenario is if the company avoids the inevitable for too long and then is forced into bankruptcy by it’s many creditors. When that happens it almost always ends in liquidation.
Those creditors who lent Ford the big bucks not so long ago are themselves in huge trouble right now thanks to a load of poorly considered lending. Citigroup just fired it’s CEO amid billions of dollars of write downs, and that isn’t just home mortgages. Ford’s $18B financing was arranged just last year by Citigroup, JP Morgan and Goldman Sachs. With turmoil and new management on Wall Street the possibility of those secured loans getting into trouble and being called is very, very high. Perhaps Ford’s strategy is to try and hold on another 18 months in hopes that the next US President will be willing to get the government into bailing the company out. Recently the sub-prime mortgage side of the Wall Street train wreck has been getting most of the press, but an even bigger story has been the massive high-risk lending to companies and buy-out firms. One trick the buyout firms have been using is to buy a company and then have it take out huge loans which are used to pay cash dividends to the new owners. No smart business person has their company borrow money to pay a dividend, but plenty of I-got-mine idiots get away with it.
Ford’s problem remains first and foremost a lackluster product line. Alan knows exactly nothing about fashion oriented high ticket consumer products. The long product life cycles, narrow product line and few, large customer business he was in at Boeing have almost nothing in common with the automotive business. I bet he regrets getting into bed with the Ford family and it’s dysfunctional company.
I’ve seen this movie before,albeit in a different industry (health care). When a CEO starts musing about the possibility of bankruptcy that means it’s a virtual certainty. Things will get very interesting in Detroit.
Katie P. “Things do look shaky at Ford (Yay!)”
I’m sure the thousands of Ford workers who depend on a Ford paycheck every week to feed their families are very happy that you continue to openly root for their demise.
I’m sure the thousands of Ford workers who depend on a Ford paycheck every week to feed their families are very happy that you are openly rooting for their demise.
As Ms. Puckrik is English, she will have quite a different perception of what you mean by “rooting.”
I suspect that Mulally would resign before Ford goes 11. JTHorner hit the nail on the head — the family ownership is the issue here.
Mulally is a turnaround guy without a steering wheel. His only alternative to BK is probably to radically downsize the product lineup in order to stop the bleeding, but I doubt that there is the will at the top to do that. He would need ten years for a turnaround, but he doesn’t have that long.
PCH101: I’ll clarify—rooting = hoping for. Just to clarify my rant…Ms Pukrik in other threads has stated her open hatred for Ford (based on everyone she hates works for Ford or something like that) and her hope that they they go belly up.
Would not call this out if it was a one time incident.
Umterp85, I’d suggest that you look up “rooting” in an English slang dictionary. Let’s just say that “rooting for the home team” would bring much a bigger smile to the members of an English team than it would for an American one…
1. rooting
In America it means cheering, in Australia it means fucking.
Jim Courier, the American tennis player, was commenting on a match for Australian television. A female player was close to victory on court, while the players for the next match wanted her to close out the match so they could get on court. Courier, “There’s two guys in the locker room rooting loudly for her.”
2. rooting
Slang for supporting or cheering something on.
I was rooting for Kerry.
3. rooting
Slang For Fucking
The couple were rooting all night long.
4. rooting
When you rub your nose against someones arm in hopes of finding mishrooms
girl: what are you doing???
guy: rooting you!!!
girl: ooookaaay…
<----Killing myself laughing!
Please don't play the guilt trip on me about all of the families that wait on Ford to feed their families. That is the nature of capitalism. The weak die and the strong survive (or was that Darwin?). If those families want to be angry at someone, how about a union that sold them out? Or a management which was more concerned about making a quick buck than maintaining a long term vision with sustainable profits?
The problem for Ford began when Ford started "rooting" their customers with shoddy goods and poor warranty service. Now the market is "rooting" Ford......!
Good no more flambé mobiles.
@ umterp85:
I’m sure the thousands of Ford workers who depend on a Ford paycheck every week to feed their families are very happy that you continue to openly root for their demise.
While I find Ms Puckrik’s dislike of Ford slightly unbalanced, I’m unsympathetic to the UAW crowd. I grew up in UAW country in the 70’s and 80’s – and was spoon fed all the usual misinformation: the ‘Japs’ work for a rice bowl a day; their cars are small and dangerous; we deserve our pay cuz management makes six-figures for doin nothin.
Through life experience and observation you figure out the truth – you meet local auto workers trying to get laid off to the ‘jobs bank’, and you drive a Honda CRX (after getting out of your Chevette), and you read about the pretty darn good pay scales in Japan (and in their US factories).
My college friends and I figured all this out eventually (some of whom had family in the ‘plants’). I think all our cars are now imports…
PCH101 / Ryan Knuckles: Two countries seperated by a common language I guess—very funny comment BTW>
Katie—nice deflection of your original comment into a rant about Fords business issues. Defend your comments of “joy” please—-not rant against who is to balme for Fords issues.
There is a HUGE difference between a critical and no holds barred anaysis of Ford’s troubles (after all that is what this site is all about) and wishing for their demise.
I do not wish anyone’s job away…nor do I take joy in it like you seem to in Fords case—nature of capitalism aside—thats just plain cruel.
To anyone who actually cares:
Please read my comments very carefully. Although, I do have a deep hatred of Ford (and I pick no bones about it), I am always balanced. In fact, if anyone bothered to read my first comment, they would see that.
I state how it’s not all over for them and how they have plenty of options open to them.
There is no “deflection”. Ford have had multiple chances to save themselves and still do have many “outs” open to them. I have zero sympathy for them.
As for being cruel. Puh-leez! Ford probably didn’t shed many tears for the millions of people who got burnt by their products (myself included) and left them out of pockets, nor did the families of the people who worked there. So, don’t play that game with me. It’s not as if, Ford have tried to do the right thing and failed (a la Jaguar). They are getting a hardcore lesson in the nature of screwing your customers over.
For the record, I hate Renault even more. But I can’t deny they have a safety record far superior to Volvo.
You run into a lot of people on this website that have an unbalanced, irrational dislike of objects, companies, etc., but the link I’ve noticed seems to be a dislike of anything American in origin. When pressed, their reasoning seems suspect.
I’ve owned both domestic and imported vehicles – in my experience some are great, and some are stinkers no matter who makes them. I currently drive a Grand Marquis – the wife a Corolla. Both are good cars, but the Grand Marquis is a far higher quality vehicle, and costs far less to maintain. Interestingly, a 2009 Corolla will cost about the same as a 2009 Grand Marquis out the door, but the Corolla will sell in much higher numbers.
One can make the argument that most of Ford’s new products are not even American anyways.
Katie: I have read your comments in this string and in OTHER editorial strings as well.
Your comments have gone beyond pure hatred to wishing for Ford’s demise——have the guts to stand behind your prior comments—-and relish that your wishes have real consequences for real people
Mr Umterp85,
I am standing behind my comments AND realise the consequences of my wishes. Just like Ford’s management should be……
Ford has the brightest future of the big 2.801. If only it could (or would) capitalise on it….
Pch101 said “as Ms. Puckrik” is English…” She may live in the UK now, but if our Katie is the person who has the katiepuckrik.com website, she was born in Virginia. Her father was in the Air Force and the family moved several times.
Mr 50Merc,
Sorry, I ought to clarify. I’m not THAT Ms Puckrik. I took my screenname after that talented lady, that’s where I got my inspiration for this screenname.
I am a girl who is British and lives in the UK.
But we’re not here to talk about me, we’re here to talk cars….. :O)
Thanks, Katie, I appreciate the clarification. Interestingly, we have something in common: my real name is Duroplast Trabant, but I wanted my screenname to be more glamorous.
But unlike you, I hope Ford survives. I feel as I did about the pioneering airline, Pan American World Airways, which carried the US flag all over the globe. One PanAm flight I was on had the rudest flight attendants I’ve ever experienced, but it was still sad to see this once-great carrier fade away. There are disquieting similarities between the Detroit 3 and the airline industry. Like dinosaurs, the companies are greatly challenged by massive environmental change.
I knew it. Katie is actually Jeremy Clarkson.
Mr 50Merc,
I ought to clarify again, that although my hatred for Ford is now pretty well known! I am always balanced. I give Toyota stick about their bland mobiles. If Toyota lose their reliability trademark, they’re toast too!
I’m not down on America. I like Chrysler and I hope they survive. Until a week ago, I thought they were roadkill, but nowI have renewed optimism for them.
I just don’t understand why people go crazy for Euro Focuses. I’ve driven 2 of them and I am utterly perplexed as to why anyone would want that over say, a Civic (slightly iffy brakes) or a lower spec Golf?
I don’t know, maybe my view is slightly askewed?
P.S. Jeremy Clarkson is God! Well, After James May….! ;O)
I agree with the concensus here that Ford is only getting what was coming to them. This includes both the management and the unions that both worked to create their own demise b/c they could never properly work together.
It was this callous attitude they held for their customers …including the Pinto Memo and the fact that lawyers showed up at the hospitals of Pinto burnt victims and families with NDAs and settlement offers. Now there’s 16M Fords that were sold with cc devices that could erupt in flames and this was a concern for 15 years…plus ignition coil fires, plastic manifold fires, switch column fires. And those are just the major fire problems they had – not the lack of quality and terrible customer service.
If you dont have a domestic auto industry “root” against others maybe?
I think the euro-Focii you’ve driven Katie aren’t the high performance ST’s, etc that U.S. enthusiasts would like. I imagine the low end rental ones are just like everything else in that class, cheap.
Oh for goodness sake!
What part of “I want Chrysler to survive” are people missing?! And don’t start that “You don’t have an auto industry of your own, so don’t be ragging on ours” argument because it’s illogical as I’ve proved before.
If by Euro Focuses Americans mean the Focus ST that makes a hell of a lot more sense! I can sort of see why you’d want that stateside. But you already have it stateside. It’s called the Volvo C30. It shares the same platform AND engine as a Euro Focus ST.
JAJE: There is a big difference between saying “get off you asses and start doing the right thing because you have screwed many people over the years”—-and taking the leap to cheering for their demise.
Its very easy in blogosphere to hide behind computer keys as we tap out responses and “wish” for certain things. It is quite another thing to live with the social and economic consequenses if said wishes are played out.
Our country will be better off if GM and Ford fix their problems (in the most efficient and product centric way possible)—-that is what I am cheering for because I think you, I, and all consumers will be the better for it.
Our country will be better off if GM and Ford fix what is wrong—-that is what I am cheering for because I think you, I, and all consumers will be the better for it.
I agree with that. But they have pissed off enough customers to have earned a taste for blood by some of those whom they have burned. I knew someone who was nearly burned to death in a Pinto who probably wouldn’t be too upset if Ford goes out of business — can you blame them?
And if Ford falls, others will come in to take its place. If those who would have bought a Mexican-made Fusion end up buying an Ohio-built Accord, instead, the blue collar workers of Marysville and their neighbors would actually better off for it than if you had bought the Fusion.
Taxman,
You are entitled to your opinion of our opinions, but I am entitled to call BS.
The big 2.x loses credibility when it tries to hide behing the American Flag. First off, so many of their “domestics” are made outside the US vs. the “imports” that are made here.
Second, most people here are fans of some Jeeps and a few other cars. So even if we are just talking about cars, you are wrong. But then to go off and imply that we are some how American bashers is just wrong.
Lastly, the whole union situation is anti-american in the extreme. The situation with those organizations and the politicians that still protect them is destructive to our nation. America is about self reliance, independence, and charity. We are not about using the law to take from one group and give to another so that the money can be skimmed and used to support passage of more laws that do the same until our freedoms are gone.
So no Taxman, criticising poorly designed and built American cars, the UAW, and the 2.x are not indicative of hating all things American. Quite the contrary. Perhaps you should consider that your experience with your own cars may be contrary to the majority’s instead of wondering why everyone else seems to be making stuff up.
PCH101: My intent was not to turn this into another “Ressler Thread”….both you and Alan have done a great job articulating your positions on whether to consider / buy (or not consider / buy) competitive domestic offerings.
I am trying to differentiate between those not wanting to buy or even consider a domestic (for whatever valid reason may exist) and those ACTIVELY cheering for Ford / GM demise. The latter attitude serves no social or economic purpose IMHO.
I agree with that. But they have pissed off enough customers to have earned a taste for blood by some of those whom they have burned. I knew someone who was nearly burned to death in a Pinto who probably wouldn’t be too upset if Ford goes out of business — can you blame them?
Kinda unhealthy for that someone to hold a 30-year-old grudge, isn’t it?
@ umterp85: Like several others I’m not fretting Ford’s demise (but I’m not cheering it either – but more pointing to the fact that reality is reality and arguing semantics on blogosphere is quite useless – b/c someone thinks Ford is where it is now b/c of Ford’s inability to see reality). Now, should we simply forgive Ford and sweep their mistakes under the carpet (40+ years worth). Or just let simple capitalism play out for the better. Sure Ford going out to business or going bankrupt might be in the short term a terrible thing (but isn’t that concern over the short term what got them in this real pickle anyway). However, someother company will fill the void – hopefully with a management that has morals and truly cares about their customer’s safety and will not always choose profit. Heck with going under maybe they will throw out the bad management, still unrealistic union req’ts in today’s day, and get rid of the poisonious Ford family values and become a real competitive company that sells great and safe products.
The transplats that so many people have feared have wound up building factories and employing hundreds of thousands of workers directly and vicariously. As they grow larger and have more market share they’ll build more plants (as they are doing right now). However, the corrupt UAW wants to get a piece of that pie and is trying their darndest. But the reason why they’ve not succeeded is b/c the transplants have been treating their workers with respect (a far cry for how the Big 3 treated their blue collar workers creating the need for the UAW in the first place).
Kinda unhealthy for that someone to hold a 30-year-old grudge, isn’t it?
If you saw this person and what kind of damage that car did, you’d probably feel about two inches tall for having made that remark. Seriously.
jaje ” However, someother company will fill the void – hopefully with a management that has morals and truly cares about their customer’s safety and will not always choose profit.”
Your characterization of Ford management couldn’t be further from the truth. Questionable decisions were made in the past, but I don’t think there’s an auto company in existance who hasn’t faced similar decisions. However, safety is a Ford pillar, and every car being planned currently will gain 5 star ratings, etc (see 08 Taurus as example).
Further, your insinuation of immoral mgmt is ludicrous. Do a little research into Ford’s charitable works or safety efforts and you will find that you’re speaking ignorantly.
If Ford is bankrupt and private equity/banks takeover, I can assure you they will not be “more moral” entity. Ford couldn’t even fire people en masse as would be much more profitable (white collar anyways). The buyouts were by far the most costly method possible, but fairest to the employees and their families. Gee, sounds like immoral corporate greed to me.
There certainly can be social value in wishing for the demise of a company. Some may wish it over safety issues, others over morality, or over any other sort of reasonable reason. Some may be right, others wrong. A company is nothing more than a construct. Those constructs cause bad results from otherwise good people. We can wish for bad people to fail, and so we can wish the same for bad companies.
As for profit vs. morals, there are almost no choices for really large companies that involve choosing one over the other. The choice is short term profit over long term profit where moral issues are concerned. When bad choices are made it is usually because of short sighted foolishness or individual interests.
It would seem possible to have a constructive discussion on what influences Wall Street has on these decisions, and how to improve the situation. Yet, it doesn’t seem to get changed.
“Your characterization of Ford management couldn’t be further from the truth….Further, your insinuation of immoral mgmt is ludicrous.”
So how does a company that has internal records and recordings of cc devices catching fire in the early 90’s still use these on cars for 15 years and equip some 16M cars? What about the service bulliten from Ford to their dealers instructing them to deflate Explorer tires to 26psi (minimum level) when the Firestone fiasco was going on – was there a handling issue with an F150 quickly convereted to an SUV without a proper suspension redesign?
Truth is all companies have to choose between profit and safety…Ford just has a record of picking the former in most cases and getting caught with safety scandals. You can bring up what they are finally doing all you want but it’s Fords past and you have to live with it and people do use it to evaluate their purchasing decisions.
If anything’s “further from the truth” it’s your idea that Ford in the past and the future really cares about safety first and foremost. That’s just a big load of crap if I’ve ever heard it.
“Do a little research into Ford’s charitable works or safety efforts and you will find that you’re speaking ignorantly.”
Many other companies sell cars that don’t catch on fire in their garages for no reason or burst into flame due to a slow rear end collision – yet donate money to other charities and safety efforts. Ignorance is bliss and you are full of it!
“Many other companies sell cars that don’t catch on fire in their garages for no reason or burst into flame due to a slow rear end collision – yet donate money to other charities and safety efforts. Ignorance is bliss and you are full of it!”
I’m not making excuses for the past, calculated decisions are made by every company and mistakes can be made and aren’t always immoral. The present and future is different though, accept it or not. I assure you I’m not “ignorant” to what IS (not may or may not be) going on in Ford, and the costs that are being sunk on safety. You can make blatant statements about things without current knowledge all you want, but that doesn’t mean you know what is happening.
It may be because of the mistakes in the past, but Ford will not be known again for these kinds of mistakes. It’s a bit of a case of once you have a reputation you don’t want, you will work harder than any to prove otherwise.
I’m not worried about Ford failing. Someone else will pick up the slack for them. Jobs will be created. Life will go on.
PCH101: Cheering the demise of a company that will put a whole lot of people in whole lot of hurt is not cool either—not meeting bills, not being able to put food on the table is real hurt ….those cheering for this scenario should feel 2 inches tall as well.
Cheering the demise of a company that will put a whole lot of people in whole lot of hurt is not cool either
The point others have made here is that if Ford or whatever go out of business, someone else will step up to fill the gap. (I doubt that former Ford drivers would just toss their car keys and start walking.)
There will be workers who will have jobs building those other vehicles. They may not be the same individuals, but someone will benefit and the market will get the vehicles that it wants.
“It may be because of the mistakes in the past, but Ford will not be known again for these kinds of mistakes. It’s a bit of a case of once you have a reputation you don’t want, you will work harder than any to prove otherwise.”
Well history is on my side – some people don’t pay attention to history and…well bad things repeatedly happen and the “told you so’s” come out of the woodwork.
Now, I wonder what’s different now than before. I do recall in 2000 that Ford (and GM) proclaimed they will be the environmental leaders (as Toyonda introduced the first production hybrids) – same as they are proclaiming now that they’ll have the safest car lineup (which I think ironically Honda has at this time or at least it’s shared with Volvo). As before Ford boldy claimed that fuel cells and ethanol (well it was their CAFE dodging incentive) and electric cars would trump hybrids (a lot of press releases / clenched fist presentations / swooning over the future of what Ford would boldly deliver). Fast forward to 2002 and hardly anything was ever done by the Big 2 (except build more SUVs which had 40% of the crash deaths due to single car rollovers – and the Explorer Firestone fiasco was rampant). Ford eventually came out with a licensed Toyota hybrid (though the claims that Ford had a perfect system all worked out but decided to license it at the last minute – just seems a bit fishy).
With all that history of bold claims and no actions…and as we live in a society of advertising and lipspeak – actions speak louder than words and history speaks volumes of where MFGRs will be in the future. Now with Ford’s proclaimed safety push…would they ever be this far along with out Volvo? And how does a reskinned but not reengineered Focus stand up to the newest and completely redesigned competition (Civic / Sentra / Corolla) with today’s more vigours crash safety push. Note that in 2002 the lowly Civic coupe with SAB was the first compact car ever to get 5 stars across the board crash safety. In fact that year only one other car was given the same high rating and that was an Volvo S80. What MFGR has safety devices to protect pedestrians if they’d get struck by their car with break away windshield wipers and nozzles, and a certain collapsable hood and windshield to soften the blow. It’s not Ford.
And yes it’s not nice to wish or see people lose their jobs. But those line workers do have choices when the time comes (I’ve been laid off before so know what its like). Sorry but capitalism and a free market economy makes these things happen – unless Gov’t bails out badly run businesses at the taxpayer’s expense. That’s what I want my taxes to go to is the Viagra prescriptions that many disgruntled union workers sold on the side for profit b/c it was free under their health care agreement (and nothing keeps the masses happy more than an erection).