Ford, Lift Up Your Weary Head

[1931Chevy]

Posted half of the article since this is NYtimes and by tomorrow is only available to subscribers
http://www.nytimes.com/2007/01/05/bu...78000&emc=eta1
DEARBORN, Mich., Jan. 4 — For a half-century, the blue oval logo atop Ford Motor’s headquarters has served as a kind of beacon for the American automobile industry, a signpost for local motorists on area highways and a guidepost for pilots landing at Detroit’s airport nearby.

But lately, blue is the only word for the malaise surrounding Ford, which is rapidly seeing its position in the industry and in its hometown eroded by its failure to combat foreign competition.

This year, Ford expects to permanently lose its grip on second place in the American market to Toyota, which passed it twice in monthly sales in the last six months, including December. As many as half its blue- and white-collar employees have decided to take voluntary buyouts from a company where jobs were long seen as lifetime guarantees.

Ron Cimino, 44, used to regret not landing a job at Ford, where his father worked for 52 years. Turned down in 1984 because he lacked a master’s degree, Mr. Cimino of Dearborn wound up starting his own import-export business.

“I’m glad I didn’t end up working at Ford,” he said. “I never thought I’d say that.”

To be sure, General Motors and Chrysler have their own problems that are weighing on this city. Their headquarters are here, too, as are some of their car plants, and thousands of their employees have their own worries as each company struggles financially.

But Ford’s troubles, arguably, are felt more acutely here. After all, G.M. placed a good bulk of its manufacturing 60 miles north, in Flint, Mich., and once had factories from Massachusetts to California as well as the Midwest. Chrysler, though still a big local employer, has had German owners for nearly a decade.

Ford, by contrast, is woven more into the fabric of Detroit, with the Ford name on office buildings, museums, high schools and highways, as well as the football stadium, Ford Field, which opened downtown in 2002.

Now, as the annual Detroit auto show prepares to open to the media this weekend, much of this city’s bedrock is unexpectedly at risk. In
November, Ford disclosed it had pledged nearly all its assets, including the trademark on its 100-year-old logo, as collateral against $25 billion in loans needed to fund its restructuring.

Ford has generated a particular sense of sympathy, bewilderment and fear here that its crosstown rivals have not. There is sympathy, analysts say, because more of a human element is involved, namely the Ford family; puzzlement because Ford seemed to be the one Detroit auto company that had an answer for Japanese competition in the 1980s and 1990s with its profitable sport utility vehicles; and fear that if a once-powerful company like Ford could falter, no one in Detroit may be safe.

The sentiment is readily voiced in places like Miller’s Bar, where the red leather barstools and colored Christmas lights evoke the watering hole in “It’s A Wonderful Life.” It has been a Dearborn gathering spot since 1941.
“Dearborn,” said the owner, Mark Miller, “is Ford.”

Judy Dolan, a secretary for the Detroit Building Trades Council, said during an interview at her home, “I feel horrible about the situation they’re in.” She drives only Ford vehicles in support of her hometown company.

Concern over Ford’s future bubbled up late last month in conversation at the holiday cocktail parties held by the Detroit and foreign car companies and their parts suppliers.

Given the attention to Ford’s situation, the company’s new chief executive, Alan R. Mulally, who arrived in September from the Boeing Company, is already recognized wherever he goes.

Mr. Mulally said in an interview that he was recently lost in a local supermarket when another shopper came up to him.
“Oh, Mr. Mulally, we’re so glad you’re here,” he recalled her saying, before she helped him find shampoo.

His predecessor was William Clay Ford Jr., who became the face of the company in television ads over the last four years as he struggled to fix Ford’s problems (he remains chairman).

The family is the reason many company employees past and present refer to the automaker as Ford’s. It is not a grammatical error, as visitors here might assume, but a nod to the fact that it is a company built by the original Henry and all the Fords that followed him.

“The Fords have a relationship with the American people,” said James P. Womack, the author and expert in manufacturing efficiency who advised Mr. Mulally at Boeing.
continue at the link
http://www.nytimes.com/2007/01/05/bu...78000&emc=eta1

[jry]

interesting story. i am not sure about their GM factory info. GM had tons of manufacturing going on in the detroit market. much more than flint. at least two fisher tool and die facilties, the tranny plants, the assembly lines, etc.

[tgagneguam]

I pray for a good ole American, underdog turnaround story from Detroit, which is why I am relentlessly critical of the hometeam.

I'm not so certain it's gonna happen.

[Caleb02]

"Ford seemed to be the one Detroit auto company that had an answer for Japanese competition in the 1980s and 1990s with its profitable sport utility vehicles"

How can they say the an suv is an answere for foreign Japanese competition when the Japanese in the 80's and 90's were having far better quality cars like the Camary and Accord. Yes Ford trucks and Suvs are awsome but thats only one segment of the automobile sales. One can not counter an Honda Accord for $30,000 for a Ford Explorer for $30,000. How many people cross shop segments from cars to trucks to suvs?

Also everyone know (even Toyota) that American Truck buyers are 99.999% loyal to a brand. For example a Chevy Truck customer would rather be tared and feathered then take a Ford Truck (even if its free) even though more F-150s have been sold for over 22 years.

[LAMRONH]

I thought the Taurus was Ford's answer to import success.
I have a cousin who is Toyotatotally now, her last American was an Explorer before she went over to Accords, then Lexus, now Prius.
The Americans didn't cover the battlefield as successfully as the Japanese, and now they and their troops are paying the price for poor generalship. Particularly in shoving Taurus out the door with no parachute, Ford was almost criminally negligent in sins of omission. That is something that must have had Honda and Toyota scratching their heads. And cheering.
As for permanently losing its grip on second place? That is the second glaring and unforgivable error in this article. I would say shockingly, stunningly, awkwardly, but there is no permanent in the auto industry.
That's like saying the NYT readership is in a permanent and steep decline...

[igor]

Originally Posted by Caleb02

Also everyone know (even Toyota) that American Truck buyers are 99.999% loyal to a brand. For example a Chevy Truck customer would rather be tared and feathered then take a Ford Truck (even if its free) even though more F-150s have been sold for over 22 years.

Actually a recent study found out that this is a myth - about half of Truck buyers switch between to another Big-3 brand when replacing their trucks. I do not know all the data, so I do not know, whether say large fleet orders were caounted (I can imagine a corp going to lowest bidder, rather than loyal and proven product), but that was the result.

The myth of 99% loyalty of Truck buyers to their brand is jsut that - a myth.

Igor

[mkaresh]

I agree. My wife's family is riddled with pickup owners--many of them need work trucks--and I think any of them would swap brands to get what they thought was a better truck for the money. For example, my wife's cousin used to swear by Chevy trucks. Then he bought a Ford because he got a better deal on it.

I live in Detroit, and the article captures something I haven't thought of before, that people here do tend to feel a more personal link to Ford. The family is here and visible, and the Ford name is everywhere.

I don't think the decline is irreversible. They just need to stop making the sort of stupid mistakes they've been making for the past few decades. The biggest need is a complete overhaul of the overly political corporate culture. Hopefully Mulally will accomplish this.

A few weeks ago a Ford product development engineer did email me saying that the exec summary of my report on GM perfectly captured the situation inside Ford:

http://www.truedelta.com/execsum.php

This calls for major change. But it would fix a lot fo what's wrong with all of these companies.

[TaHoE]

Originally Posted by igor

Actually a recent study found out that this is a myth - about half of Truck buyers switch between to another Big-3 brand when replacing their trucks. I do not know all the data, so I do not know, whether say large fleet orders were caounted (I can imagine a corp going to lowest bidder, rather than loyal and proven product), but that was the result.

The myth of 99% loyalty of Truck buyers to their brand is jsut that - a myth.

Igor

Sounds interesting. Do you have a link to that article?

[mkaresh]

There was one article that actually had trade-in data.

The one I can find is just J.D. Power survey that asked pickup owners if they'd consider a domestic/import. Nearly half of the owners of domestic pickups wouldn't consider an import, which JD concluded was evidence of strong loyalty. But this also meants that over half would consider an import. So I'd read the same results differently.

http://www.jdpower.com/corporate/new...asp?ID=2006270

[VivienM]

Originally Posted by Caleb02

How can they say the an suv is an answere for foreign Japanese competition when the Japanese in the 80's and 90's were having far better quality cars like the Camary and Accord.

This is the typical Detroit cut and run (to quote a certain import booster in the White House) attitude. If the Japanese are outdoing you in vehicle segment X, switch your focus to segment Y.

Of course, 5-10 years later, once the Japanese are outdoing you in segment Y (and have a solid financial base coming from their unchallenged success in segment X still), then you again have a problem. So you look for segment Z...

It's worth noting that GM seems to be trying to do exactly this with the Lambdas.

[1931Chevy]

Ford seemed to be the one Detroit auto company that had an answer for Japanese competition in the 1980s and 1990s with its profitable sport utility vehicles

I think the guy that wrote this article didnt do his homework right, Yes Ford was able to lead the car market until for half of the 90s until 96 when they redesigned the Taurus and then market share keep going up until 2000 with the Explorer

[johnny smallblock]

Originally Posted by mkaresh

For example, my wife's cousin used to swear by Chevy trucks. Then he bought a Ford because he got a better deal on it.

It's not surprising. When car companies are firing Americans left and right and moving jobs overseas, why do they expect such loyalty from American customers? I understand the competitiveness issues that underline these decisions, I'm just saying, why wouldn't that affect people's brand loyalty.

[RangeRover]

Originally Posted by johnny smallblock

It's not surprising. When car companies are firing Americans left and right and moving jobs overseas, why do they expect such loyalty from American customers? I understand the competitiveness issues that underline these decisions, I'm just saying, why wouldn't that affect people's brand loyalty.

The Big 3 have a high cost structure partly because of their loyalty to their employees. Ford, GM & Chrysler have carried the burden of high labor costs because they know they are the life blood to many American communities.

If the choice is between an import or a domestic car of competitive quality, I will always choose American. They are cutting jobs because they have no choice! They have carried the burden of High labor and Healthcare costs for far too long.

GM & Ford have been building brand loyalty for generations and providing families with good salaries, communities with schools, the military with manufacturing support during time of war & have spawned the automotive industry through innovative manufacturing and good old American ingenuity. These companies have helped shape the fabric of this country in ways that import brands can only dream of.

How long do you think Toyota, Honda or Nissan would support American jobs if times got rough? The Big 3 stuck by the American worker almost to their death. Now that they have to cut workers people abandon them like they are garbage. What short memories we have!

[LAMRONH]

Originally Posted by mkaresh

I don't think the decline is irreversible. They just need to stop making the sort of stupid mistakes they've been making for the past few decades. The biggest need is a complete overhaul of the overly political corporate culture. Hopefully Mulally will accomplish this.
A few weeks ago a Ford product development engineer did email me saying that the exec summary of my report on GM perfectly captured the situation inside Ford:

http://www.truedelta.com/execsum.php

This calls for major change. But it would fix a lot fo what's wrong with all of these companies.

Good summary of GM, from my restricted perspective. Bureaucracies do those things. And with today's consultant, researcher, and expert culture substituting for the gut feeling, vast knowledge, inspiration, and internal direction of past automotive greats, it's no wonder we're getting oatmeal cars that look like robots styled them.
I think 90% of bureaucratic structures should be disassembled and rebuilt every 20 years max. They get so political and petty that you can spend more time or energy fighting internal battles with total assholes than you do working on achieving your stated mission. That becomes tiresome.