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Thursday, September 07, 2006

Ford's New Pilot

The biggest news of the week was the sudden announcement by Bill Ford that he was stepping aside as President and CEO of Ford, and that he was hiring Alan Mulally, Boeing's Executive VP of commercial aircraft.

The punditry flew thick and fast, from the bloggers to the Wall Street analysts. Some think Mulally is not going to be effective because he is an outsider, others think that this is exactly what is needed.

I think that the voters at AutoBlog's recent poll (results here) are right: the choice of CEO is not critical for Ford. "It's the product, stupid" seems to be the popular answer.

From my reading in the Wall Street Journal and other places, it seems that Mulally is known as a gregarious team builder on one hand, and a ruthless cost cutter on the other. While at Boeing, he cut nearly 50% of Boeing's employees, and outsourced many airplane parts and modules to suppliers.

I would guess that Mulally has been brought in to do the same thing for Ford--chop the company down in size, without mercy, by focusing on simplifying the product line and outsourcing major modules. A likely outcome of this is fewer brands under the Ford umbrella, fewer platforms, and more common parts between platforms--which is what all of the automakers have been working on doing for some time now. "Simplify!" and "Outsource!" have been the automotive mantra for some time.

Could Bill Ford have done this? I am sure he could have, but reports were that he was exhausted from wearing his three badges--CEO, President, and Chairman.

A telling bit from the Wall Street Journal yesterday, my paraphrase: Bill Ford awoke one day at 5:00am, but instead of going for his morning run, he sat down and started making a list of what he would like Ford to represent over the next 10 years. "Safety" and "Environment" were two of the things on the list. Bill Ford then thought about what brands were on the road to delivering his key goals, and which brands weren't. The brands that didn't look like they could deliver might not "fit in" with the future of Ford.

In another part of the same piece, the WSJ related this story: at a board meeting, Mark Fields advocated that Ford sell Aston Martin to generate cash to keep North America moving forward. Mark Schultz disagreed, saying that Aston was making money. Bill Ford "slammed his hands down on the table", and said "join the party, we're selling it".

What comes out of these stories, if true, is that Bill Ford is wearing thin, and needs a frontman to take over the day-to-day grind of making ugly decisions that upset employees, shareholders, and dealers.

Reading the tea leaves, I see this scenario (purely my speculation): Jaguar, Land Rover, and Aston are sold off. Mercury is phased out, and Mazda takes its place as the urban/youth/import brand. Lincoln dealerships must then pick up Mazda, or sell Fords as well as Lincolns. Lincoln is on probation. Volvo stays put, due to its strong safety portfolio, and as the Euro-Luxury brand. Ford vehicles get more upscale options, to fill in for the missing Mercury.

I wish Mr. Mulally God-speed, because all of us here in Metro Detroit need Ford to be healthy, not just workers but everyone else from the auto suppliers to the restaurants.


Zarba said...

1) Sell Jag and Land Rover. Aston's a great boutique brand, and if it makes money and doesn't drain resources, keep it.

2) Kill Mercury. A drain Ford can ill afford. They are simply me-too Fords with more chrome.

3) Pour those resources into Lincoln. A great brand with a storied history, it needs to stay alive. Start with the 2002 Lincoln concept car, and build from there. All real drive, traditional American Luxury. V-8's for everyone. Kill the Mark LT, and either make the Gator competitive or drop it. They need a Lincoln Premier in the 35K range, a V-8 sedan for the masses. A Continental based on the 2002 concept at the 40-45K range, and a Mark II coupe, inspired by the classic Mark II of the 50's.

4) Keep improving Mazda as the sporty alternative to Honda and Toyota. They need better quality, but the Mazda3 and 6 are great starting points. The Miata is an icon, stay with it. Redesign the RX-8 to stay competitive.

5) Bring over the Euro Focus and Ka, and certify all their Euro diesels to comply with US regs. Offer diesels across the board as a viable alternative to hybrids. A diesel Explorer and Expedition should do well in today's fuel cost climate.

6) Build a rear-drive V-8 Thunderbird coupe for Ford, sharing the platform with the new Mark II. Take the 61-63 torpedo T-Bird as inspiration.

Yoo much retro? No. All these desings harken back to the days when American cars ruled the roads. They were distinctly American in design and feel. Not me-too Toyotas. Don't attack the enemy at their strengths, but at their weaknesses.

The Friendly Grizzly said...

1) Build electricals and fuel systems that do not burst into flames.

2) Offer a warranty good at all Ford agencies, not just the selling dealer. (this is bases on experience with dealers that refuse to honor warranty complaints and issues on cars purchased elsewhere. Several instances, not just one).

3) Stop offer mousy nothing-burger cars to the American market when Ford offers amazingly good, sporty, quality cars in Australia and Europe.

4) Tell Bill Ford to go play golf or something else to keep him out of the office. Ford family members are so stuck in the past and always have been. Henry the First kept the model T in production when Chevrolet and others had long since offered modern alternatives, and the same battles were fought post-WW2.

5) Fire whomever designed the front end of the Navigator. That is rubbish no matter how you slice it.

Anonymous said...

Fords F-series diesel trucks (dually's of course) rock!Hopefully they will never get rid of those.