igor Posted December 20, 2006 Share Posted December 20, 2006 http://www.forbes.com/business/feeds/afx/2...afx3271582.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. Igor Quote Link to comment Share on other sites More sharing options...
rkisler Posted December 20, 2006 Share Posted December 20, 2006 http://www.forbes.com/business/feeds/afx/2...afx3271582.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. Igor 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. Quote Link to comment Share on other sites More sharing options...
igor Posted December 20, 2006 Author Share Posted December 20, 2006 (edited) thank you for the very insightful post Austin .. this makes sense .. Igor http://www.marketwatch.com/news/story/ford...B347A057C9DE%7D ^^Better -longer article. 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 Edited December 20, 2006 by igor Quote Link to comment Share on other sites More sharing options...
pcsario Posted December 20, 2006 Share Posted December 20, 2006 Hopefully this means no more cheap crap like the Fusion, and more true competitors for the market leaders. Quote Link to comment Share on other sites More sharing options...
HoustonPerson Posted December 20, 2006 Share Posted December 20, 2006 Thanks for posting the longer article; it does give a little more insight. BeanCounting in regard to capital expenditures is discussed; but, the article is not really fully "revealing" in regard to "penny pinching" on specific products. Overall, the article is 100% positive for Ford; it would be more beneficial if FMC would "for sure" take it to the next level and insist on purchasing high quality parts at the lowest possible price. The previous policy of paying the highest prices for parts with the lowest quality (bean counter controlled), has proven disastrous. A case in point is virtually all of Ford’s electronics fall into this category; from simple switches to high ticket radios. This has been one of dozens of areas FMC has not been competitive Quote Link to comment Share on other sites More sharing options...
igor Posted December 20, 2006 Author Share Posted December 20, 2006 Thanks for posting the longer article; it does give a little more insight. BeanCounting in regard to capital expenditures is discussed; but, the article is not really fully "revealing" in regard to "penny pinching" on specific products. Overall, the article is 100% positive for Ford; it would be more beneficial if FMC would "for sure" take it to the next level and insist on purchasing high quality parts at the lowest possible price. The previous policy of paying the highest prices for parts with the lowest quality (bean counter controlled), has proven disastrous. A case in point is virtually all of Ford’s electronics fall into this category; from simple switches to high ticket radios. This has been one of dozens of areas FMC has not been competitive well Penny-pinching is not going to happen - per Fields .. one of the reasons why Ford will not be profitable before 2009 is that he and Muallly refused to reduce the PD budget ... despite the financial trouble, and despite the work on more efficient PD organization, FoMoCo will continue to pour just as much money into PD as before - practically setting themselves for success where they will have enough money top produce MORE models, just as well as until now, or design the same amount of models, but BETTER. Of course this is a prediction - and an optimistic one at that - but if they play their cards right, it can happen /takes off pink glasses Igor Quote Link to comment Share on other sites More sharing options...
jpd80 Posted December 20, 2006 Share Posted December 20, 2006 I think it has more to do with Alan Mulally appointing Derrick Kuzak as Ford’s new “product czar†has made the comittee redundant. A “product czar†doesn't need to have his projects authorised by anyone except the people above him. Quote Link to comment Share on other sites More sharing options...
rkisler Posted December 20, 2006 Share Posted December 20, 2006 I think it has more to do with Alan Mulally appointing Derrick Kuzak as Ford’s new “product czar†has made the comittee redundant. A “product czar†doesn't need to have his projects authorised by anyone except the people above him. I don't think so, jpd80, as Group VP Richard Parry-Jones had the global PD title previously (he's now shown as only Chief Technical Officer, and the Global PD title has been removed since Derrik now has it). And of course, there is a lot more to vehicle programs than PD; in particular, manufacturing (which Derrik doesn't control) is the largest piece of the spending. I think it's more about Mulally having the tools he thinks are necessary to run the company in an organized fashion. This way, he has the money in his pocket and can negotiate and settle disputes between his direct reports, then pull the money out his pocket and move on. It's also a signal from the Ford family that this is one outside business person that they have faith in and are willing to give him more control over the purse strings. They're showing him more encouragement than previous outside guys including Iacocca, Peterson, Nassar. For better or worse, Ford's fate seems to be in Mulally's hands. What a challenge!!! So far I am encouraged. Quote Link to comment Share on other sites More sharing options...
xr7g428 Posted December 20, 2006 Share Posted December 20, 2006 Excellent thread. Thank you for bringing this to the board. It apprears that a "no value added" step has been removed from the process. Good work! Quote Link to comment Share on other sites More sharing options...
HoustonPerson Posted December 20, 2006 Share Posted December 20, 2006 well Penny-pinching is not going to happen - per Fields .. one of the reasons why Ford will not be profitable before 2009 is that he and Muallly refused to reduce the PD budget ... despite the financial trouble, and despite the work on more efficient PD organization, FoMoCo will continue to pour just as much money into PD as before - practically setting themselves for success where they will have enough money top produce MORE models, just as well as until now, or design the same amount of models, but BETTER. Of course this is a prediction - and an optimistic one at that - but if they play their cards right, it can happen /takes off pink glasses Igor That sounds great, I know my fourth $50,000 Lariat (3 superdutys and one 2004 F150 have each had new EATC's installed........the latest in my 2006 F250 with only 20,000 miles), if they can figure out how to make that work and get cold air at the same time would be a miracle! Every F250/350 2005-2007 have failed weather stripping, leaks etc. It only cost 10 cents more (if that?) to get quality parts that "work"...........that is what consumers want in a $50,000 truck. For sure get the bean counters out of the way; from the capital expenditures down to the engineering/design and parts level. Mr. M knows (since he owned a Lexus and I assume he still does), that evertime you get in the car, the AC/Heat system knows exactly what to do............no hands are required on the controls at all......it works perfectly everytime. So surely at this very late stage of the game the 2008 SuperDuty's will finally for the first time have automatic AC. AC that you do not have to reprogram everytime you step back in the car, even when you stop for gas! How dumb is that. Surely they got this stuff right. IF NOT. Mr M. should stop the assembly line on the new SuperDuty now. If the AC system does not work like it does on his old used Lexus...........then the new SuperDuty's should not leave the building! Quote Link to comment Share on other sites More sharing options...
Drake Posted December 20, 2006 Share Posted December 20, 2006 I'm glad the beancounters have been cut off. I hope it eliminates putting all the company's eggs into the Mustang and F-150 basket. Hopefully this means no more cheap crap like the Fusion, and more true competitors for the market leaders. The overwheling majority of Fusion owners would be to differ with you on the cheap crap remark. Quote Link to comment Share on other sites More sharing options...
g48150 Posted December 21, 2006 Share Posted December 21, 2006 Two Words: "For Sale" You'll see what I mean come March... ...and its not a BAD thing (I'm not 100% grouch) Quote Link to comment Share on other sites More sharing options...
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