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D DAY AT FORD


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15 hours ago, kyle said:

This would not be good but sounds like their is some merit there....

“The bottom line is that Ford’s announced job cuts are absurd," said market analyst Jon Gabrielsen, who advises automakers and auto suppliers. "No one who analyzes the Ford situation believes that 7,000 job cuts remotely scratches the surface of what will be required for Ford’s long-term longevity."

He added, "Adam Jonas, the most respected analyst in the business, estimates that Ford will need to cut an additional 23,000 salaried workers through 2022, for a total of 30,000 since late 2018. My own estimate, arrived at separately and before his report came out, indicated an additional 22,000 cuts would be needed."

https://www.freep.com/story/money/cars/ford/2019/05/21/ford-job-cuts-analysts/3754205002/

Those numbers seem out of whack, but if we are talking "worldwide", maybe not.  Ford has effectively pulled out of Russia, India, Brazil and Venezuela.  They have shrunk engineering and manufacturing to almost nothing in England and are trying to figure out how to get engineering out of Germany (very difficult because of labor laws).

All of these make Ford a smaller but more profitable company, short term.  Something Mulally did when he took over, but Fields allowed to rebuild.  The question is, how does this affect Ford worldwide and the growth of the company 5-10 years down the road ?  Remember that Big Jim has a "bromance" with (Mr. "no more internal combustion engines by 2030") Tony Seba.

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1 hour ago, theoldwizard said:

Don't blame Mulally, The 33% reduction in white collar was BRUTAL !  It was Mark Fields who basically did NOTHING and allowed the fiefdoms to rebuild.

While that’s mostly true, I’d contend that they never really went away as evidenced by ringleader Mark Field who just went underground while Mully was in charge. What JH is doing is tearing down the bureaucracy and leaving them fewer places to hide. Breaking down institutionalised thinking and the veritable mine field of inter level approval is tricky but he’s gotta start somewhere 

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1 hour ago, theoldwizard said:

Don't blame Mulally, The 33% reduction in white collar was BRUTAL !  It was Mark Fields who basically did NOTHING and allowed the fiefdoms to rebuild.

Question I would have is how does this happen? Where was Bill Ford?  Where was the Board?  If the manpower reduction was so brutal, wasn't head count such a very visible stat such that it would always be on the radar screen once Mullay left?  And if Fields was in fact reverting to the old ways, no one was "going up the back stairs" and cluing Bill Ford in?...Assuming he did not pay attention to head count/org charts?

And these discussions on span of control?   How long has the "flatter is better" trend been popular?    For some time I would think.

I think I have to go back to the library and read "Once Upon a Car" one more time.

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4 hours ago, ice-capades said:

If I read correctly in some of the media reports, cuts are also coming in the technology department by the end of June. Could Ford's IT could get any worse? I guess we'll find out!

About 4-5 years ago they brought in a lot of IT people for these new "mobility" projects which ultimately went nowhere. I get the impression this is where the bulk of the IT department cuts will be. My father-in-law is one of them, he's scared sh*tless right now. 

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2 minutes ago, Bob Rosadini said:

Question I would have is how does this happen? Where was Bill Ford?  Where was the Board?  If the manpower reduction was so brutal, wasn't head count such a very visible stat such that it would always be on the radar screen once Mullay left?  And if Fields was in fact reverting to the old ways, no one was "going up the back stairs" and cluing Bill Ford in?...Assuming he did not pay attention to head count/org charts?

And these discussions on span of control?   How long has the "flatter is better" trend been popular?    For some time I would think.

I think I have to go back to the library and read "Once Upon a Car" one more time.

I think what he was saying is the Mulally made the tough cuts that needed to be made but the Fields comment wasn't about headcount it was about management style.  Fields allowed individuals and groups to do what they wanted to do or what was in their best interest and not the best interest of the company.  That isn't something the board or Bill Ford would necessarily see.  The only way to stop that is for the CEO to make mandates to his direct reports and ensure compensation is aligned with the right indicators.  It doesn't matter what you say - what matters is what you reward or punish.

 

In Mulally's first meeting his direct reports were hiding their financial results from each other and keeping huge notebooks of data compiled by a small army of support staff each week.  He told them that next week they would share everything and they were only allowed to bring one sheet of paper to the meeting.   More importantly - and I think Hackett is doing the same - he required business cases to be analyzed at the corporate level, not just on a vehicle by vehicle or department by department basis.   You can't do something that saves your department $1M if it costs another part of the business $2M.  That includes "doing your own thing" on vehicles and systems instead of working together as one entity.

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6 minutes ago, mackinaw said:

Why do you think they fired Mark Fields?  They saw what was happening and fired the guy responsible.

To be fair I think Fields was fired based on results (or lack thereof) not based on his mgt style.  I suspect if Fields had delivered good numbers he’d still be in charge.

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11 hours ago, akirby said:

To be fair I think Fields was fired based on results (or lack thereof) not based on his mgt style.  I suspect if Fields had delivered good numbers he’d still be in charge.

And my point was given the state of affairs when Mulally took over, should there not have been closer scrutiny of just what was going on under his replacement? 

In particular, if I were Bill Ford and/or the board, given the nature of the company, and the "fiefdoms" that existed, you think there might have been some sour grapes amongst the "un chosen"?  Mulally gets all sorts of accolades, the company gets nothing but good press as far as the turn around, and then it is in the toilet in how many months???

How long was Fields on the throne before he left.  Granted you have to give the guy a chance, but I have to believe when your name is on the building, I would think you always have your ear to the ground.

And Farley?  The smartest car guy in the world that Bill Ford just had to have and we are now no longer in the car business.

Yes I know.  Not his fault.  All these Korean and Japanese sedans I see are being given away.

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9 hours ago, Bob Rosadini said:

And my point was given the state of affairs when Mulally took over, should there not have been closer scrutiny of just what was going on under his replacement? 

In particular, if I were Bill Ford and/or the board, given the nature of the company, and the "fiefdoms" that existed, you think there might have been some sour grapes amongst the "un chosen"?  Mulally gets all sorts of accolades, the company gets nothing but good press as far as the turn around, and then it is in the toilet in how many months???

How long was Fields on the throne before he left.  Granted you have to give the guy a chance, but I have to believe when your name is on the building, I would think you always have your ear to the ground.

And Farley?  The smartest car guy in the world that Bill Ford just had to have and we are now no longer in the car business.

Yes I know.  Not his fault.  All these Korean and Japanese sedans I see are being given away.

 

The biggest issue with Fields was he was in hunker down mode and the product decisions for the next five  years where suffering from that. Going back in time-the expectation was the economy was going to tank again in late 2016/early 2017 after the election-in hindsight we know how good that prediction was.

Fields was only on the job 32 months or so (July 2014--May 2017) the stock fell 35% in that time also. To me, that shows that Bill Ford and board knew that something was going on and they had to move sooner then later. Mulally "saved" the company in 2006 or so, but didn't go deep enough to undo the systemic problems that company that finally seem to getting addressed now. 

As for Korean and Japanese Sedans-they have the same problem everyone else is having:
http://www.goodcarbadcar.net/2019/05/april-2019-the-best-selling-cars-in-america-every-car-ranked/

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1 hour ago, silvrsvt said:

Mulally "saved" the company in 2006 or so, but didn't go deep enough to undo the systemic problems that company that finally seem to getting addressed now.

The only way to fix that type of behavior permanently is to get rid of the executives and middle managers that think that way and to hire/promote people who think and act appropriately AND you have to ensure the compensation rewards good behavior and punishes the bad ones.

I had a VP who demanded that everyone do what's best for the company not just for you or the organization.  It was ok to make mistakes and it was ok to escalate issues as long as you followed the right process and were trying to do the right thing.   As long as you did that you were golden.   If you didn't do that you were told to go find a new job.  

Mulally forced people to change while he was there but he didn't change the culture.   So when Fields took over he allowed those people to revert to their old ways.  I hope Hackett is trying to fix that permanently.

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23 hours ago, Bob Rosadini said:

Question I would have is how does this happen? Where was Bill Ford?  Where was the Board?  If the manpower reduction was so brutal, wasn't head count such a very visible stat such that it would always be on the radar screen once Mullay left?  And if Fields was in fact reverting to the old ways, no one was "going up the back stairs" and cluing Bill Ford in?...Assuming he did not pay attention to head count/org charts?

And these discussions on span of control?   How long has the "flatter is better" trend been popular?    For some time I would think.

Bill Ford was, rightfully, scared to death that his FAMILY would lose the company (Remember it really IS a family business) !!  The one story was, before Mulally took the job, he told Bill that "I can make Ford profitable again, but it will be a smaller company".

The other story is, when Mulally left, Fields was his hand picked candidate.  Supposedly, he told him, "Things are running fine.  Don't screw them up !"  Taken to the extreme, NOTHING was done !   Product plans kept getting pushed back (cost savings) and chimneys grew.

When things are going well, and money is rolling in, who is going to tell Bill that chimneys are being re-created ?  And even simpler thing would be watching office space square footage in Dearborn.  In 2007-2008, Ford vacated almost every rental property that they were occupying and the closed one of their largest engineering buildings.  It took years, but slowly that turned around.  The engineering building got partially remodeled (and the name changed back to what HF-I named it, Ford Engineering Laboratory).  Rentals were occupied (Ford Land owns a large shopping center in Dearborn.  When Lord and Taylor folded, it because a Ford office.)

The two positives I'll give Big Jim are getting out if the unprofitable ROW markets that are likely never going to be profitable (Russia, South America, etc).  Doing SOMETHING about getting electric car business back into gear !

If the new Explorer and all of the vehicles that will use that similar hybrid powertrain layout (front engine, electric motor, transmission) are successful, this will be a key moment in modern Ford engineering history.  I would like to know whose idea it was to take that concept, added it to a beefed up Mustang platform !  I sure hope it works !!

 

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15 minutes ago, theoldwizard said:

Bill Ford was, rightfully, scared to death that his FAMILY would lose the company (Remember it really IS a family business) !!  The one story was, before Mulally took the job, he told Bill that "I can make Ford profitable again, but it will be a smaller company".

The other story is, when Mulally left, Fields was his hand picked candidate.  Supposedly, he told him, "Things are running fine.  Don't screw them up !"  Taken to the extreme, NOTHING was done !   Product plans kept getting pushed back (cost savings) and chimneys grew.

When things are going well, and money is rolling in, who is going to tell Bill that chimneys are being re-created ?  And even simpler thing would be watching office space square footage in Dearborn.  In 2007-2008, Ford vacated almost every rental property that they were occupying and the closed one of their largest engineering buildings.  It took years, but slowly that turned around.  The engineering building got partially remodeled (and the name changed back to what HF-I named it, Ford Engineering Laboratory).  Rentals were occupied (Ford Land owns a large shopping center in Dearborn.  When Lord and Taylor folded, it because a Ford office.)

The two positives I'll give Big Jim are getting out if the unprofitable ROW markets that are likely never going to be profitable (Russia, South America, etc).  Doing SOMETHING about getting electric car business back into gear !

If the new Explorer and all of the vehicles that will use that similar hybrid powertrain layout (front engine, electric motor, transmission) are successful, this will be a key moment in modern Ford engineering history.  I would like to know whose idea it was to take that concept, added it to a beefed up Mustang platform !  I sure hope it works !!

 

All of the platform things (BEVs, RWD hybrids, etc.) predate Hackett I'm sure.   But what he's brought to the table is a fresh perspective on styling, features and packaging.  He took one look at the Mach-E BEV and said start over and the new one was a knockout (or so we've been told).   I'm sure he influenced Aviator GT performance.   Because you can't get high margins on ho hum vehicles that look and perform like everything else.

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On 5/22/2019 at 9:37 AM, fuzzymoomoo said:

About 4-5 years ago they brought in a lot of IT people for these new "mobility" projects which ultimately went nowhere. I get the impression this is where the bulk of the IT department cuts will be. My father-in-law is one of them, he's scared sh*tless right now. 

They may have been IT in that they know a lot about computers, but they WERE NOT from Ford's IT organization.  "Mobility"/electrification/self driving vehicles are NOT part of the IT organization.

Sadly, IT is an area that needs to be taken out "behind the woodshed", but Mulally, Fields and Hackett have let it "fester".  When Sarbanes-Oxley because the "law of the land" Ford was scare sh!tless.  They told the head of IT at the time, to come up with a plan for the BUSINESS end of the company to be fully compliant (any violations of Sarbanes-Oxley could mean actual JAIL TIME for top executives).  After the plan was put together, reviewed and approved by the Board of Directors the people in It said, "We would like to do the same for engineering."  They quickly got the stamp of approval.

From an engineers stand point, IT is a nightmare !  Yes, they do a good job on basic "office automation" (pretty much all Microsoft products) and basic CAD.  Their telephone support is a NIGHTMARE.  100% off shore and 0% are native English speakers.  They are closely monitored on how many "tickets" they open and close.  A ticket can be closed even when a problem is NOT solved and the end user has no feedback mechanism.  In fact, demanding to speak to a supervisor creates a new ticket !  If for some reason a tech needs to come to your desk it will be 48 business hours.

Worst of all, upper level management has their own "tech support", on call 24/7 and they have been know to drive to an execs house to help "Johnny" with his 6th grade PowerPoint presentation (I know a person who has done this, not recently but it has happened).

These stories are accurate (I know people still working there) and are just scratching the surface.

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11 hours ago, Bob Rosadini said:

And my point was given the state of affairs when Mulally took over, should there not have been closer scrutiny of just what was going on under his replacement? 

A Board of Directors typically only looks at the dollars.  If they are rolling in, they are not going to question the CEO.

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6 minutes ago, akirby said:

All of the platform things (BEVs, RWD hybrids, etc.) predate Hackett I'm sure.   

I am sure of that !  Just wondering who ?

6 minutes ago, akirby said:

But what he's brought to the table is a fresh perspective on styling, features and packaging.  He took one look at the Mach-E BEV and said start over and the new one was a knockout (or so we've been told).   I'm sure he influenced Aviator GT performance.   Because you can't get high margins on ho hum vehicles that look and perform like everything else.

CEOs have NOTHING to do with styling and features !  Maybe marketing and packaging.  Their job is to make sure the "right people are in the right place" to make those decisions.  I still say announcing to the world that Ford is getting out of the sedan business was STUPID.  Not actually doing it, but announcing it that way.

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3 minutes ago, theoldwizard said:

I am sure of that !  Just wondering who ?

CEOs have NOTHING to do with styling and features !  Maybe marketing and packaging.  Their job is to make sure the "right people are in the right place" to make those decisions.  I still say announcing to the world that Ford is getting out of the sedan business was STUPID.  Not actually doing it, but announcing it that way.

It's been reported that Hackett himself told them to start over on the Mach E design because it sucked.  So while on a day to day basis, he's not sitting in the design room saying yes or no, he still can influence those decisions if he wants.

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IT is traditionally a cost center and brings in no revenue on its own so it's a prime target for cost cutting, outsourcing, etc.

Traditional IT that takes 6 - 24 months to deliver monolithic projects are not going to work in today's world.   You have to move to an agile devops model where IT supplies platforms and tools (or you use public cloud) and each team uses those tools and platforms to develop and deploy their own applications in a self service model.

Whereas it takes anywhere from 3 weeks to 9 months to install a new server you can go to Amazon or Microsoft and get a new Linux virtual server literally in a few minutes and have your software up and running in hours or days.   And you only pay for it while you're using it.

Of course that requires a completely different skillset than a traditional IT/development shop and it requires support from upper management to implement it.   If you do it correctly with proper training and oversight (and hiring folks who already have those skills) you can really transform and enable the product teams to move so much faster and you can get new insights with machine learning/AI and big data.

On the other hand if you do it wrong it will be far worse.   But doing nothing is a recipe for disaster.

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Just now, rmc523 said:

It's been reported that Hackett himself told them to start over on the Mach E design because it sucked.  So while on a day to day basis, he's not sitting in the design room saying yes or no, he still can influence those decisions if he wants.

Correct.   The CEO can absolutely influence how the designers and product teams operate.  He didn't come up with the styling but he said this sucks start over and it needs to be bold and beautiful.  It's all about setting expectations and guidelines for the folks doing the work.

I sincerely doubt we would be seeing the Aviator GT with balls to the wall performance under Fields.  

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4 minutes ago, akirby said:

Correct.   The CEO can absolutely influence how the designers and product teams operate.  He didn't come up with the styling but he said this sucks start over and it needs to be bold and beautiful.  It's all about setting expectations and guidelines for the folks doing the work.

I sincerely doubt we would be seeing the Aviator GT with balls to the wall performance under Fields.  

To be fair, wasn't Fields the guy that pushed Ford Performance to expand?

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On 5/22/2019 at 9:35 AM, Bob Rosadini said:

Question I would have is how does this happen? Where was Bill Ford?  Where was the Board?  If the manpower reduction was so brutal, wasn't head count such a very visible stat such that it would always be on the radar screen once Mullay left?  And if Fields was in fact reverting to the old ways, no one was "going up the back stairs" and cluing Bill Ford in?...Assuming he did not pay attention to head count/org charts?

And these discussions on span of control?   How long has the "flatter is better" trend been popular?    For some time I would think.

I think I have to go back to the library and read "Once Upon a Car" one more time.

I think Bill's issue has always been his inability to know who to trust and weed out the BS that he is given..

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On 5/22/2019 at 9:46 AM, akirby said:

I think what he was saying is the Mulally made the tough cuts that needed to be made but the Fields comment wasn't about headcount it was about management style.  Fields allowed individuals and groups to do what they wanted to do or what was in their best interest and not the best interest of the company.  That isn't something the board or Bill Ford would necessarily see.  The only way to stop that is for the CEO to make mandates to his direct reports and ensure compensation is aligned with the right indicators.  It doesn't matter what you say - what matters is what you reward or punish.

 

In Mulally's first meeting his direct reports were hiding their financial results from each other and keeping huge notebooks of data compiled by a small army of support staff each week.  He told them that next week they would share everything and they were only allowed to bring one sheet of paper to the meeting.   More importantly - and I think Hackett is doing the same - he required business cases to be analyzed at the corporate level, not just on a vehicle by vehicle or department by department basis.   You can't do something that saves your department $1M if it costs another part of the business $2M.  That includes "doing your own thing" on vehicles and systems instead of working together as one entity.

as Dr. Deming said, 'in God we trust, all others must have data'

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3 hours ago, rmc523 said:

It's been reported that Hackett himself told them to start over on the Mach E design because it sucked.  So while on a day to day basis, he's not sitting in the design room saying yes or no, he still can influence those decisions if he wants.

Hackett himself said it in several interviews 

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