Even with the huge success of the New Mustang, these guys are still struggling :(


Ford's fight for survival
Layoffs and plant closings won't save the No. 2 automaker. Here's what analysts are looking for.
By Alex Taylor III, FORTUNE senior editor
January 20, 2006: 10:27 AM EST



NEW YORK (FORTUNE) - When Ford Motor announces its North American restructuring plan on Monday, the headlines will be about the number of plants closed -- as many as ten -- and the number of people who will lose their jobs -- up to 30,000 over the next five years -- if published reports are correct.

But the layoffs and the plant closings are just the beginning of a needed overhaul at Ford.


To begin with, those cuts are merely a reflection of a reality that already exists. Ford needed to get smaller yesterday. It has been losing market share for ten years, and sales of some of its most popular vehicles from the past like Taurus and Explorer have slumped so alarmingly they will probably never recover.

Analysts and others will try to peek below the surface to see what else the automaker is doing to stem the need for more downsizing in the future. Here's one effort already underway that has gone unnoticed: Ford is making significant changes in its global organization and product engineering that should make new model development far more efficient and economical.

What's happened is that Ford has almost completely reversed the shifts made in the radical reorganization a decade ago called "Ford 2000." The brainchild of former chairman and CEO Alex Trotman, Ford 2000 attempted to adjust to the increasing globalization of the auto business by eliminating regional organizations in Europe, Asia and South America and replacing them with five vehicle centers. Each of the five centers would be charged with developing a single class of vehicles -- large rear-drive sedans, small front-drive econoboxes -- and marketing them around the world.

Ford 2000 looked good on paper but really messed things up. A lot of local market knowledge disappeared with the elimination of the regional organizations, and lots of experienced managers went out the door too. Then, under Trotman's successor, Jac Nasser, the vehicle centers stopped sharing common components like air conditioners and shock absorbers and began developing their own, causing an explosion in costs.

Now Ford has recentralized product development and engineering to enforce an economical sharing of platforms and components across product lines. So engineering for a new small car platform known as C1 will serve as the underpinnings for cars marketed by Ford, Volvo and Mazda.

Observers will also be watching for signs of increasing responsibility being handed to 44-year-old Mark Fields. Fields, whose French-cuff shirts and doo-wop haircut set him apart from the company's other executives, was given the keys to North America just four months ago after stints in Europe and Japan.

Yet Chairman and CEO Bill Ford has left him virtual carte blanche to devise the North American turnaround plan despite his lack of experience. Jim Padilla, Ford's ostensible number two executive and the man to whom Fields reports, has stayed out of the way, too.

Whatever else he is good at, Fields has proved himself a gifted phrase maker. His turnaround plan has been dubbed the "Way Forward," and Fields describes the company's new car philosophy as "red, white and bold."

"Bold" certainly couldn't be said about Ford's vehicles in the past. Despite internal complaints that its new models were boring and looked too much like their predecessors, everything coming out of Dearborn looked like it had been warmed over, not redesigned. The 2005 Ford Five Hundred was so nondescript that it almost vanished from sight, while the 2006 Ford Explorer looks almost identical to the older model it replaces.

Finally, observers will be looking hardest for some sense of plan, direction and persistence from Chairman and CEO Bill Ford. The company has seemed almost rudderless over the past five years with numerous management changes -- Field's job seems to turn over on an annual basis -- and a sense that even lumbering old General Motors was moving more smartly and aggressively in the marketplace.

Earlier in January, Bill Ford declared that it was time for Ford to stabilize its market share after its long decline. Monday will be the first chance for him to demonstrate that he actually means it. <end>



Heres the link: http://money.cnn.com/2006/01/20/news/companies/pluggedin_fortune/index.htm

because ford sux, 90% of the cars in my shop are fords and those new fuel pump eating chevy trucks all the parts are made in mexico im scared to go on a trip in my 05 tahoe because of there crappy $500.00 fuel pump. i keep a hammer in the truck to hit the tank when it dont crank

Now, now; "Hecho en Mexico" by law (NAFTA) means it's just as good as "Made in the USA" are you questioning our foreign policy? The NSA could be listening you know!

I used to have an employee who used to work for me. But that was before he went to work for the NSA, now there is no record of him in the company files. He never existed except for my memory of him. Wait there's some one at the door…

Larger Dave

wow.. you mean despite the fact that they have one car line called "Mustang" that shares no components with any other car line that they sell at low profit margins to a somewhat sizable chunk of the car buying public, they are still in financial trouble?
i can't imagine how that could be true...

The way I see it is that the big boys up top are just trying to get as much money for themselves BEFORE they completely tank ALL high-priced labor, bennies included, here in the good old USA as they switch everything over to third world countries that pay wages per day instead of wages and bennies per hour!!

AND when they complete this, there won't be enough decent wage/benny paying jobs left for our kids and grandkids to afford to buy their then third world built cars!!

I also figure that China isn't going to "partner up" with any of the world's now auto makers ONCE they figure out how to use their own infrastructure to EXPORT AND MARKET their cheaper, but still useable cars!!

China is learning fast how to end up being the BIG player here b/c of their extremely cheap labor rates!!! I figure it is gonna hit AND tank many in the auto and auto parts supplying industry here in about 8 years??

Just about the time they sell their cheap cars that are on the way HERE..

AND then a much LARGER problem will be just how will we support our industrial/military complex internally????

B/c when we can't, we have pi--ed enough people off around the world that somebody will try us on for size!! AND just the thought of it scares me..

(And I told myself I wasn't gonna mess around here anymore... Scr-w a bunch of "Chili-dogs"..)...

pdq67

I don't like most of the stuff the republicans do (MOST OF IT KNOCKS THE LITTLE GUY) but anyway we need done right now what MR Reagan did in the 80's , harley davidson was about to go under , jap bikes such as hondas yamahas suzukis and kawasakis were less expensive than a harley and so at that time (BEFORE THE IF IT COST'S MORE THAN MY HOME TO BUY A HARLEY THEN I WILL LIVE IN A BOX THINKING GOT STARTED) you could not sell harley's in the market where the jap bikes were som much cheaper and better bikes too (ALWAYS WERE) so what Reagan did was he put an import TAX on the jap bikes A BIG ONE TOO overnight a cb750 went from $2995.00 to $5995.00 or whatever this is just and example but my point is it evened up the market and still let that jap bikes be sold in the USA , and IT WORKED everyone came out a winner , harley got back up on it's feet the jap bikes sold for more money but the tax only lasted about ten years then it came off but they did not lower the price the japs said well if they paid that for them with the tax then they will still pay that much and it went on great of course now harley being what it is today it would not matter if the jap bikes were $19.95 each people would still pay $20K for the harley ,
in finishing they need to tax the SH*T out of the chinese stuff ALL OF IT !! to even it up ,
such as say a jacket at a department store
right now and american made very heavy duty jacket may be $100 buck's ? where as one from china with less durabilty but a similar look would be $29 buck's?
we just need to even it out make the chinese jacket say $89 and the good ole american jacket $100 , then thing's would still flow just would not be a monopoly anymore , ohh well back to the corn dog's (I LOVE THAT)

Yes Ford is making a announcement Monday at 9 central on what the big plan is and what plants they will shut down. They are going to shut the assembly lines down so that all employees can hear who is loosing their jobs.I can not remember a time since I worked on the line that they shut the line completely down for more than a couple minutes and that was for Sept.11th. Wish me luck that I will still have a job to pay for my toys and support my family.

And how would tripling the price of a cheap chinese jacket (or whatever import product you want to name, including BMWs, and Porsches) help me? Who gets that extra 60 bucks I now have to pay for that jacket or 6000 dollars for a Honda Civic, the government? What are they going to do with it, buy another hammer for the pentagon. No thanks.

GM and Ford and ultimately Chrysler are headed the way of the Pittsburg steel industry. They have been just doing business the same way they always have, not looking forward. Heck GM still pays a dividend on their stock even though they haven't turned a profit in years. GM (and probably Ford) isn't run by "car Guys" anymore like Harley Earl, or Lee Iacocca, it's run by the investors, and bean counters. Look for GM to file for bankrupcy sometime in the next year or so, as a means to get out from some of their labor contracts with the unions. Health care and retirement costs are just killing them, and will continue to do so. It's about the only way to turn the company around at this point. Ford probably won't be to much further behind.

Yes Ford is making a announcement Monday at 9 central on what the big plan is and what plants they will shut down. They are going to shut the assembly lines down so that all employees can hear who is loosing their jobs.I can not remember a time since I worked on the line that they shut the line completely down for more than a couple minutes and that was for Sept.11th. Wish me luck that I will still have a job to pay for my toys and support my family.

I hope that things turn out O.K. for you and everyone at Ford. :(

Remember what I said about making the world selling price of something the price that the people that make it can afford to pay for it and still live!!

Call it what ever you want to, but this will stop somebody from pocketing that extra $60 or $80 being talked about here to level the playing field!!

Then if they want to tack on $60 to $80 S&H to get it here to sell it to you, then you can be the fool to pay that much for S&H to buy it so they can still make their outrageous profits like now!!

Just don't let the GOV's get their hands on any extra selling price money's b/c it will just create bigger GOV. and cost us all more in the end........

pdq67

The people making the big profits in Ford and alot of other companies are the top managers.I make good money building cars BUT not even close to the millions paid to the top dogs.The auto industry has not made a good profit for at least 10 years and some of it has to do with pensions and insurance yes but alot has to do with the million dollar salary that most of the top executives make.They say they are cutting salary jobs this time too but it wont go up to the level that will really save them money.

The reason the Japanese can make the cars they do and sell them at the prices they do is because the Japanese govenment subsidizes the factories. It costs the government of Japan about 4000 or 5000 per vehicle. Of course they get this money back in taxes from the citizens of the country. If you want the us government to do that so the US car manufacturers can continue running their companys the way they have for the past 30 years or so, fine, but I don't. If the company I work for can't turn a profit, they either change, or go out of business. I used to work for one of the largest architect engineering firms in the country (Stone & Webster). They mainly worked in the Electric utility sector building power plants, transmission lines, etc. They were one of the premier companies in the world, and they let that go to managements head. When the utilitys started deregulation and stopped building nuclear plants back in the early 80's business started to be harder to come by, but the company refused to change the way it did business. When the company was asked why we didn't do more advertising, the answer from management was essentially that we are Stone and Webster, (sort of the great and powerful OZ answer) if companys want us to do work for them they will come to us. Company went bankrupt in 97, and alot of people that had their retirement funds in the company stock programs lost everything. Companies need to change and adapt to the market, and not expect the government (or me) to bail them out.

I know that we have factories here in the US building foreign cars are you saying that they subsidize those plants too? For example the toyota truck nissan and honda all are built here in US by americans making union wages but not under a union contract.

I don't know particularly how those plants work, but usually the subsidies come from the country where the plant is located. In this case the US, either the local area, state or US government gives the company incentives (subsities) to locate the plant there, either by giving them tax breaks on the property and equipment, or payments directly to the company for locating the plant where it is. Usually these are short term benefits, say 5 or 10 years, but after that the company essentially blackmails them into continuing (sometimes increasing) the payments or breaks by threatening to close the plant, or relocate the jobs to the next state, or county where they can get a better deal. This works really well when a good portion of the areas jobs depend either directly or indirectly on the facility being located where it is. It also works much better if there are shuttered facilities that you can move into, like an old US car assembly plant in this case, with very little relative expense.

You can read about how the Japanese government goes about manipulating the value of the Yen to the Dollar to provide the japanese manufacturers further advantage, straight from hearing in the House of Representatives in October of this year :

http://waysandmeans.house.gov/hearings.asp?formmode=view&id=3798

The Japanese sold something like 46B dollars worth of automotive related items, cars, parts, etc., while importing only 1.7B dollars worth of US automotive related items. The only way to level the field is for the US to just send a bill to the Japanese for the difference between imports and exports at the end of the year.