FoMoCo cuts Beancounter power

[igor]

http://www.forbes.com/business/feeds...fx3271582.html

(article is so short there is no way to post less than 1/3 of it)

In paraphrasing: FoMoCo alterred company bylaws, and now Finance Committee (beancounters) cannot approve/limit capital spending related to product development.

sounds good to me, but I woul gladly hear from someone who knows more about corporate rules etc.

EDIT 1:25PM: A better - longer article linked below:

http://www.marketwatch.com/news/stor...347A057C9DE%7D

The move appears to give more decision-making power to the company's management team and will probably allow the struggling auto maker to move more quickly when it comes to pushing new vehicle plans through the pipeline. Ford is set to lose money through 2009 due to massive restructuring charges and a steady loss of market share in North America.

....

Before the automaker amended its bylaws, its finance committee had authority to approve capital expenditures related to product programs within the annual product program budget. That authority was removed from the amended bylaws, according to a filing with the Securities and Exchange Commission.

.....

The company said the finance committee will retain its authority to review the company's practices that relate to the management of Ford's financial affairs. Eight of the company's 12 directors are on the finance committee, including Chairman Bill Ford and Mulally.

Igor

[cfch3399]

Finally a bold move and one that will produce results. A move that all US businesses should take. Next: take away the power of business crooks, marketers, and lawyers.

[ByTheLake]

Originally Posted by igor

(article is so short there is no way to post less than 1/3 of it)

Yeah ... the article is only one sentence ... 27 words! 1/3 of the article would be 9 words. You'd have to post:

Ford Motor Co said its board has amended the

Anyway, cash is tight at Ford ... there will be no free-wheeling spending on product, regardless of the 27-word article. Ford still needs to make a profit on what it sells. I'd suspect that this announcement won't amount to much.

[FoMoCo Fan]

Ford needs MORE "beancounters" not less. They currently spend more on product research and development THAN ANY COMPANY IN THE WORLD!!! And what do they have to show for it?

[Randle2I]

In the immediate future this might not have any sort of dramatic effect. However in the mid to long term future of Ford this has the possibility to dramatically change Fords products for the better.

[stevecmh]

i think this will be a good thing. i hope it works good for them

[FoMoCo Fan]

The only way you can say this is going to be good for Ford is to believe that 1) they haven't been spending enough and 2) that spending more will solve their problems.

I happen to agree with neither of those. They've been spending too much, and most of that has been wasted on projects that are outdated before they even reach the autoshow circut.

[rearden82]

Thank goodness. Ford was doing quite well up until the mid-late 90s when Jac Nasser decided to give all the power to the beancounters while replacing engineers with marketing people.

That's why Ford went from making revolutionary cars like the Taurus and Thunderbird, to sticking Lincoln badges on FWD V6 Mazdas. I really hope they are able to get turned around.

FoMoCo fan-- I think if Ford is able to put the people actually designing the cars back in power, their spending will be able to go more toward making competent cars in a timely manner, rather than getting caught up in bureaucratic red tape and battling beancounters.

[Caleb02]

If You Build It They Will Come...and Break Down Your Dealership Doors. Dealers Will Mark Up The Sticker (like The Saturn Sky). So Do We Really Want Better Autos? If We Build Subpar Cars Then We Get Better Deals (look At Chrysler/dodge/jeep) Since They Give Tens Of Thousands Of Dollars Off The Auto (and That Just To The Dealers)... Imagine A Sky Selling For 5 Grand Under Sticker!!!

[Ming]

Originally Posted by FoMoCo Fan

Ford needs MORE "beancounters" not less. They currently spend more on product research and development THAN ANY COMPANY IN THE WORLD!!! And what do they have to show for it?

You may have a point. The Koreans can design some very pretty taillights, for example, and still they're inexpensive. Ford could spend 10 times as much and come up with some real stinkers. Ford needs more innovation and better designers that can work wonders on a tight budget.

[jbartley]

Originally Posted by FoMoCo Fan

Ford needs MORE "beancounters" not less. They currently spend more on product research and development THAN ANY COMPANY IN THE WORLD!!! And what do they have to show for it?

a fugly navigator and top heavy looking expedition?

[GM_Guy81]

This can only be a positive thing.

[igor]

here is a VERY iformative response from BlueOval Forms:

Originally Posted by Austin @ BOF

Well, the article is so short, it's hard to tell, but....

The real control at Ford, and particularly the control by the family, has been held in the Finance Committee of the Board. The Chairman has most often been a Ford family member with other Ford family members on the Committee also (it now includes Bill and Edsel). All product programs have to go the Finance Committee for funding approval so, in effect, the Finance Committee has final approval on Ford's product proposals.

What this annoucement might be saying is that the Finance Committee has delegated authority for product spending to Mulally. In other words, they might be giving him a budget and giving him the authority and power to spend it as he sees fit without having to worry about someone overruling him. Of course, he's an accomplished businessman, and that doesn't mean he's not going to inform the Board on product programs -- but he might treat it as "for your information", not "for your approval". Since Mulally seems to be managing to a business plan, I think he would rather talk to the Finance Committee about establishing his business plan for Ford and then discuss his results compared with the plan. Part of the business plan would be capital spending for new product programs. In that way, Mulally, his top leadership, and the Finance Committee are all focused with the overall health of Ford and they are all discussing it from a common document. Much more important than the Finance Committee discussing where the next CD platform is coming from.

It'll be interesting to read more on this one; the power of Finance and the Finance Committee goes all the way back to J. Edward Lundy who was one of the whiz kids who rescued Ford after WWII, so this is a big deal for Ford from a culture standpoint. But it doesn't mean that the influence of the Finance community inside of Ford is diminished. They are more than "beancounters"; they are smart, hardworking individuals who are working for the good of Ford. But....sometimes good ideas are not readily apparent from a financial standpoint when you are basing your opinions on history, conservative assumptions, and the market as it exists today.

LINK TO POST: http://www.blueovalforums.com/forums...dpost&p=124989

And about the "Ford needs mroe beancounters" ... NOT TRUE ... Ford needs global product development plan, not localized one, as it has had it until now ... And Mulally has done just that with the new flatter top management structure ...

Igor

[FoMoCo Fan]

Originally Posted by Ming

You may have a point. The Koreans can design some very pretty taillights, for example, and still they're inexpensive. Ford could spend 10 times as much and come up with some real stinkers. Ford needs more innovation and better designers that can work wonders on a tight budget.

Ford wastes more money than any company in the world. Does their product lineup reflect the world's highest r&d budget? No.

[usa1]

Getting the beancounters out may sounds good, but if they really follow through, I could see the costs going out of control. They don't have good cost control as it is today especially in R&D as commented above.

Mark