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The Handler

Ford CEO Hackett to employees: 2019 will be turning point

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https://www.detroitnews.com/story/business/autos/ford/2019/03/11/ford-ceo-hackett-tells-employees-2019-turning-point/3129344002/

Quote

Ford Motor Co. CEO Jim Hackett told employees 2019 will be the year the 115-year-old automaker turns "the corner toward a really bright future," in an internal memo obtained by The Detroit News.

Hackett is in the middle of orchestrating a global restructuring that would have Ford spend $11 billion to right-size struggling business units in Europe, South America and China, cut the global salaried workforce and slash $25.5 billion from the operating budget over the next few years. Those changes are fundamental, Hackett has argued. But they're perceived by investors and industry analysts as slow-moving, and many Ford employees are not clear on Hackett's plan.

That's not a problem exclusive to Ford, Hackett wrote in the memo dated March 8 that detailed for employees what he's doing to position the company to compete with companies new to the automotive space, and why he's doing it.

"It's natural for people on the inside and outside to raise doubts and ask tough questions as they seek clarity and certainty about our future," Hackett wrote. "This is not a Ford phenomenon by the way. Many pundits dismissed Fiat Chrysler as a lost cause coming out of Chapter 11 and predicted Tesla would go bankrupt years ago."

 

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I'll believe it when it happens. Until then it's just more hyperbole.

Until then I can't wait to see what kind of concessions they ask for in the new UAW contract. 

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Hey, I hope he's right.  Most of the product rumblings seem basically positive and reflective of current trends.

However, the time in limbo is both annoying for brand loyalists and fodder for every Wall Street analyst d-bag.

The "turning point" needs to be clipping the apex of the corner, ASAFP.

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Ford China's February sales is 75% lower than last year. Letting almost ALL of your vehicles age to the point of irrelevance may work in the US where Ford enjoys incumbency and market inertia but not in places where Ford is just one of many choices with no customer loyalty. 

If 2019 is a turning point, I hope the message is you have to keep 5 year model cycles or maybe you should just sell the company to VW and call it the day.

Edited by bzcat

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18 hours ago, The Handler said:

"It's natural for people on the inside and outside to raise doubts and ask tough questions as they seek clarity and certainty about our future," Hackett wrote. "This is not a Ford phenomenon by the way. Many pundits dismissed Fiat Chrysler as a lost cause coming out of Chapter 11 and predicted Tesla would go bankrupt years ago." 

Great quote by Jim Hackett. Far from being a lost cause or bankrupt, Fiat Chrysler's Jeep and Ram brands plus Tesla accounted for almost 100% of growth in the U.S. automotive market last year.

Hackett's fitness stuff for Ford has been slow to show results, but I'm confident 2019 will be the turning point just like he said. Ford needs to be more aggressive to reduce its bureaucracy though.

Edited by rperez817

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https://www.freep.com/story/money/cars/2019/03/13/ford-new-job-cuts-salaried-workers/3149196002/

 

More Hackett saying things without saying anything.

 

They confirm workers will be let go, but won't say how many or when.  Just that they'll announced something in the Q2.

Ford Motor Co. is eliminating more salaried jobs, the company confirmed Wednesday.

Salaried workers in accounting, human resources and administrative support working at Ford World Headquarters in Dearborn are reportedly being let go, sources close to the situation confirmed to the Free Press. In addition, the information technology team in China has reportedly seen reductions.

"We're not going to provide any numbers," Ford spokesman Said Deep said Wednesday in response to questions about the specific areas cut. "We will provide details once the process is complete in the second quarter."

....

Pressed for details — more than 10 jobs? more than 100 jobs? — Deep said, "All I can tell you is there are some separations this work has resulted in. This process began earlier. So it starts at the top, cascades through the organization and has been happening over weeks and months. Leaders at the various levels of the company are shaping the organization, focusing on the most critical work and, in some instances, shifting how work is done."

While Deep declined to discuss timing, sources within the company said cuts are happening this week.

White-collar workers have said for months that the mood at Ford headquarters in Dearborn is palpably anxious. They describe "paralyzing" tension waiting for job cuts and strategic decisions as the company's $11-billion restructuring slowly unfolds.

Ford CEO Jim Hackett acknowledged employee anxiety in an interview with the Free Press in February.

“I think it’s totally fair," he said. "My mind wants to say, ‘Is that because of the anxiety of the restructuring? They’re holding onto the ambiguity, saying, ‘I don’t know my status.’ That is really unfair to our people to have to go through that. There’s a trade, see. You end up with a lot better process from end to end if you involve the people actually in the design of what we’re doing. When CEOs edict that we’re just taking out x thousands of people, like you’re mowing the lawn, it makes everyone feel like inanimate objects. Bill (Ford) and I care a lot more than that."

Edited by rmc523

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Can't get the stupid formatting to stop putting everything in the quote box.

 

LOL, it sounds more like they're trying to avoid bad headlines when they announce "Ford is cutting X number of jobs."  I guess I get that from a Ford perspective, but all it does is make the employees anxious/nervous, uncertain, and concerned they're on the chopping block.

And as usual, it's another "there's a plan, wait and see" message from Hackett without sharing any of the plan.

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You NEVER release details before the employees are notified.   That information usually comes from anonymous sources, not from the company itself.

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 It will be interesting to see how Hackett takes $25 billion out of the operations budget without severely impacting on on next gen vehicles.

This is where the VW JV becomes important, off setting development and production costs of Ranger, Transit with income from deliveries to VW.

Also ending production of F Series and Fiesta in South America avoids big cost with reconfiguring those plants for new vehicle with doubtful ROI.

Will the reformation of global operations also mean an end to   regional design/development with all of that work handled by  Detroit?

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1 hour ago, akirby said:

You NEVER release details before the employees are notified.   That information usually comes from anonymous sources, not from the company itself.

If they treat the white collar folks the same way the do to us in the plants, they'll find out through the Detroit news/Free Press before the company tells them anything. 

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2 hours ago, jpd80 said:

 It will be interesting to see how Hackett takes $25 billion out of the operations budget without severely impacting on on next gen vehicles.

This is where the VW JV becomes important, off setting development and production costs of Ranger, Transit with income from deliveries to VW.

Also ending production of F Series and Fiesta in South America avoids big cost with reconfiguring those plants for new vehicle with doubtful ROI.

Will the reformation of global operations also mean an end to   regional design/development with all of that work handled by  Detroit?

Great post jpd80 sir. Very tough journey ahead for Hackett. Ford has no choice but to reduce structural costs and get rid of jobs they don't need, and quickly. At the same time Ford has to introduce appealing new products and services quickly too. And on top of that Ford has to make sure the JV with Volkswagen is done right. 

I think Hackett's "fitness" initiatives will allow Ford to pull it off. He has the right strategy. Just need to be more aggressive with cutting out the fat in the Ford organization globally.

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4 hours ago, rperez817 said:

Great post jpd80 sir. Very tough journey ahead for Hackett. Ford has no choice but to reduce structural costs and get rid of jobs they don't need, and quickly. At the same time Ford has to introduce appealing new products and services quickly too. And on top of that Ford has to make sure the JV with Volkswagen is done right. 

I think Hackett's "fitness" initiatives will allow Ford to pull it off. He has the right strategy. Just need to be more aggressive with cutting out the fat in the Ford organization globally.

As I was reminded a while ago, Hackett is asking all of his senior executives to look at problems in a different way, the little exercise discussed here regarding improving customer wait time was an example of thinking has to be free of existing constraints to look at alternatives, I'm sure that many of Ford's seasoned executives would still be coming to grips with thinking outside of the box (their comfort zone) is how we get architecture types instead of platforms (locked into certain limits). So maybe that sort of thinking is required on a broader scale to make people stop thinking of just doing the same old things in regions around the globe, stepping back to see what those stakeholders really need versus what they have been getting (hand me downs from Europe that no longer work)

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I don't get it!  They've been restructuring every 5 to 10 years for the last 50 years!  Why didn't they do all this cost cutting 50 years ago and get it done with?!  The workers always take the hit!  Instead of downsizing, you should be figuring out ways to upsize!  Realistically though, sales can't increase every year forever.  It kills me when these billion dollar companies do $30 billion in revenue with a profit of say $4 billion one year, and then the following year it's $28 billion revenue with a $3 billion profit, they panic!  Wall Street gets upset.  Screw Wall Street!   Here in New England some foreign company ( I just found out, didn't know until the other day) owns the Stop & Shop chain of grocery stores. The company had $2 billion in profits last year, but now they want to slash workers' pay and benefits!  Greed, sick greed.

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31 minutes ago, Joe771476 said:

I don't get it!  They've been restructuring every 5 to 10 years for the last 50 years!  Why didn't they do all this cost cutting 50 years ago and get it done with?!  The workers always take the hit!  Instead of downsizing, you should be figuring out ways to upsize!  Realistically though, sales can't increase every year forever.  It kills me when these billion dollar companies do $30 billion in revenue with a profit of say $4 billion one year, and then the following year it's $28 billion revenue with a $3 billion profit, they panic!  Wall Street gets upset.  Screw Wall Street!   Here in New England some foreign company ( I just found out, didn't know until the other day) owns the Stop & Shop chain of grocery stores. The company had $2 billion in profits last year, but now they want to slash workers' pay and benefits!  Greed, sick greed.

The glass house is already publicly criticizing how much our healthcare costs the company ($1B). I expect they’re going to go after that HARD during contract negotiations. 

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14 minutes ago, fuzzymoomoo said:

The glass house is already publicly criticizing how much our healthcare costs the company ($1B). I expect they’re going to go after that HARD during contract negotiations. 

EVERY company is doing that.  And really, healthcare costs are completely out of control.

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6 minutes ago, fordmantpw said:

EVERY company is doing that.  And really, healthcare costs are completely out of control.

Right, but I'm more pointing out the timing. Why now? Why not a year ago? Oh yeah, UAW negotiations open up in about 4 months.

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6 minutes ago, fuzzymoomoo said:

Right, but I'm more pointing out the timing. Why now? Why not a year ago? Oh yeah, UAW negotiations open up in about 4 months.

To be fair, UAW president Gary Jones, just gave his usual "fire and brimstone" speech at the UAW's recent Special Bargaining Convention.

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3 minutes ago, mackinaw said:

To be fair, UAW president Gary Jones, just gave his usual "fire and brimstone" speech at the UAW's recent Special Bargaining Convention.

I don't pay any attention to that dog and pony show. 

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2 hours ago, Joe771476 said:

I don't get it!  They've been restructuring every 5 to 10 years for the last 50 years!  Why didn't they do all this cost cutting 50 years ago and get it done with?!  The workers always take the hit!  Instead of downsizing, you should be figuring out ways to upsize!  Realistically though, sales can't increase every year forever.  It kills me when these billion dollar companies do $30 billion in revenue with a profit of say $4 billion one year, and then the following year it's $28 billion revenue with a $3 billion profit, they panic!  Wall Street gets upset.  Screw Wall Street!   Here in New England some foreign company ( I just found out, didn't know until the other day) owns the Stop & Shop chain of grocery stores. The company had $2 billion in profits last year, but now they want to slash workers' pay and benefits!  Greed, sick greed.

Ford is more like $150 Billion revenue and around $7 Billion to $9 Billion Pre-tax profit.

For the last 20 years, Ford has set out with plans to chase rainbows and unicorns and used the big profits from F Series to do it, only to realize that selling anything other than its high profit trucks ends in sorrow and a giant money pit. I don't know how many times this cycle will repeat but Ford's survival is absolutely chained to one group of buyers and the profit those sales bring, that  pays for those distractible ego driven indulgences.. Anytime Ford get n trouble is because they over spend on ventures that are basically dry wells and eventually run back home to F Series..

 

Edited by jpd80

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2 hours ago, fuzzymoomoo said:

Right, but I'm more pointing out the timing. Why now? Why not a year ago? Oh yeah, UAW negotiations open up in about 4 months.

Well, they can't do much about it for union workers during a contract, they have to wait until a new one.

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On 3/13/2019 at 1:42 PM, rperez817 said:

Great quote by Jim Hackett. Far from being a lost cause or bankrupt, Fiat Chrysler's Jeep and Ram brands plus Tesla accounted for almost 100% of growth in the U.S. automotive market last year.

Love to see a source for that.  It's the result of great ads as the FCA products are and have always been crap.

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1 hour ago, itguy09 said:

Love to see a source for that.  It's the result of great ads as the FCA products are and have always been crap.

Autoline Daily mentioned it a month or so ago. While FCA does have some great ads, that's not why they have been so successful. With the Jeep and Ram brands they also have the right products and very smart business strategy. Hackett is correct to admire and learn from them.

Edited by rperez817

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2 hours ago, itguy09 said:

Love to see a source for that.  It's the result of great ads as the FCA products are and have always been crap.

I've bought three new, 98 Cherokee, 06 Rubicon Unlimited and 12 Rubicon Unlimited.  All three have been awesome vehicles.

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14 hours ago, rperez817 said:

Autoline Daily mentioned it a month or so ago. While FCA does have some great ads, that's not why they have been so successful. With the Jeep and Ram brands they also have the right products and very smart business strategy. Hackett is correct to admire and learn from them.

What is there to admire?  The powertrains in the FCA stuff are not that great.  EcoDiesel has been junk with tons of issues, Hemi has issues lunching cams and other issues. Styling is subjective and IMHO the previous Ram looked better.  Up until this refresh they were the least capable 1/2 ton and mediocre 3/4 to 1 ton with the Cummins carrying them.   Jeep's platforms are not that much better.

The cars are riding in platforms that are old enough to vote, relying on advertising and big power numbers to sell.

So what is there to admire?  Selling outdated junk with good ads?   Ford would be better to emulate Toyota (perceived quality) and Subary (loyalty) than a company that has taken handouts twice, has abysmal quality, and is riding on ancient platforms.

I'm not saying Ford has been perfect (Powershift, early EB 3.5 condensation/chains) but I'd bet $$ Ford has a lower TCO than nearly anything FCA.

14 hours ago, fabfordeb said:

I've bought three new, 98 Cherokee, 06 Rubicon Unlimited and 12 Rubicon Unlimited.  All three have been awesome vehicles.

Reliability on all FCA products has been abysmal by most places that track things.  Jeep has never been stellar and near the bottom.  The most recent JD power survey of 3 year old vehicles bears this out.  

Edited by itguy09

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21 minutes ago, itguy09 said:

So what is there to admire?  Selling outdated junk with good ads?   Ford would be better to emulate Toyota (perceived quality) and Subary (loyalty) than a company that has taken handouts twice, has abysmal quality, and is riding on ancient platforms. 

 

Yes, sales and profits.  Say what you want about RAM and Jeep but they’re setting sales records and turning a profit doing it.

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