Ovaltine Posted February 16, 2007 Share Posted February 16, 2007 http://www.detnews.com/apps/pbcs.dll/artic...UTO01/702160417 Ford fix-it plan off track Report: Sales goals missed, morale low Bryce G. Hoffman / The Detroit News DEARBORN -- Ford Motor Co. is failing to meet key goals in its turnaround plan and employees are losing confidence in the company's ability to save itself, according to an internal report released to employees and obtained by The Detroit News on Thursday. Titled "Report Card: Ford North America," the report paints a grim picture of a company unable to stop its downward spiral. Ford missed its retail sales goal in the United States for January by 10,600 vehicles -- or nearly 1 percentage point of market share -- and now expects to miss its retail market share goals for February and March, the report shows. The company hit its material cost reduction target for January, but will miss its targets for February and March by a wide margin, according to the current forecast. "These metrics are key indicators of progress toward achieving profitability by 2009 for North American automotive operations," the report states. Ford's problems are not lost on employees, only 47 percent of whom say they have confidence in Ford's long-term success. And less than 45 percent believe the automaker's "Way Forward" plan is working, according to the results of an employee survey included in the report. The failure to meet the plan goals is the first sign of real trouble for CEO Alan Mulally's new regime. While Ford lost more money in 2006 than ever before -- $12.7 billion -- most of that damage was done before the former Boeing Co. executive was tapped to lead Ford last fall. Since then, Mulally has stressed the need for unblushing honesty and rigorous accountability, urging his executives to set realistic goals for 2007. However, Ford's Americas team failed to meet these supposedly more realistic targets. That is bound to put more pressure on Ford Americas President Mark Fields and his team. Wall Street is likely to be more indulgent with Mulally, according to Bradley Rubin, who follows Ford for BNP Paribas. "He's already done the hard thing, which is raising the capital and getting enough cash in there to fix Ford's problems," Rubin said. "It's not about how much they lose in '07. Earnings have taken a back seat to whether or not they have enough cash and financial flexibility." In December, Ford put up all of its U.S. assets to secure more than $23 billion in financing to fund the turnaround plan. Workers losing faith Ford spokesman Oscar Suris confirmed the authenticity of the report and said it demonstrates the company's commitment to keep its employees informed of the progress Ford is making in its effort to revive its struggling automotive business. "One of the hallmarks of the Way Forward effort has been robust communication with our employees, and that is continuing," Suris said. "Part of the value of understanding how you're performing against your plan is that you can make decisions today about what you do tomorrow to affect your performance in the future." Fields went over the report with employees Wednesday as part of his regular weekly Webcast, but acknowledged that he is having a hard time convincing them to keep the faith. According to a quarterly survey of employee morale, results of which were included in the report, most employees have a dim view of Ford's future. Just more than 50 percent were optimistic about the future a year ago, and Ford set a goal of increasing that number to 60 percent this year. But it has already fallen to below 50 percent. Product -- or the lack thereof -- is a major cause for this pessimism. Only 38 percent of workers surveyed said they believe Ford has "the right products to move the company forward." That was four points higher than before the automaker invited employees to see its future product lineup in December. Better marketing next step Fields said during the Webcast that getting employees to buy into the "Way Forward" plan will be a key goal of the coming year. Improving Ford's marketing will be another. "Marketing and Sales has developed a marketing plan to generate increased showroom traffic and improve customer consideration by aggressively telling the Ford story with confidence and consistency and highlighting our great products," the report states. It has been a long time since Ford's marketing division delivered game-changing campaigns like "Have you driven a Ford lately?" or "Quality is Job One." Its most recent "Bold Moves" campaign riled dealers, forcing the company to rethink its strategy. Mulally is also continuing to hold weekly meetings with top executives to monitor progress on Ford's turnaround plan and deal with problems as soon as they appear. According to the report released to employees this week, the shortfall in retail sales was "due to greater-than-expected segment shift out of pickups, unfavorable share performance related to SUVs and lower-than-planned availability of (Ford's) new products." Among the few bright spots in the report was news of a strong launch for the new Ford Edge and Lincoln MKX crossovers, as well as real progress on improving cost performance. "The forecast for the first quarter of 2007 reflects lower-than-expected warranty costs," the report states. "The forecast also includes further reductions in manufacturing-related expenses, particularly fuel and utility costs for plants." Ford is well on its way to meeting its goal of cutting some 44,000 jobs in the United States by 2008. The company also plans to idle 16 factories by 2012. You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com. Quote Link to comment Share on other sites More sharing options...
Bluecon Posted February 16, 2007 Share Posted February 16, 2007 http://www.detnews.com/apps/pbcs.dll/artic...UTO01/702160417 Among the few bright spots in the report was news of a strong launch for the new Ford Edge and Lincoln MKX crossovers, as well as real progress on improving cost performance. Ford thinks if they keep repeating this, the launch of the Edge will have been on time and flawless and the product will be selling in Camry like quantities. Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted February 16, 2007 Share Posted February 16, 2007 Ford thinks if they keep repeating this, the launch of the Edge will have been on time and flawless and the product will be selling in Camry like quantities. How long was that delay again? As far as I'm concerned the opportunity cost associated with releasing a product that some didn't see as being 100% vs holding the vehicles back to correct those issues, is something that should be taken into heavy consideration. Quote Link to comment Share on other sites More sharing options...
tommy8768 Posted February 16, 2007 Share Posted February 16, 2007 Gee-Ford employees unhappy, morale low, no viable product-what a shocker!!!! How could their morale be high when they see a bunch of their coworkers getting the axe. Quote Link to comment Share on other sites More sharing options...
igor Posted February 16, 2007 Share Posted February 16, 2007 this is troubling .. we shall see how the year pans out ... I am happy that at least they KNOW and ADMIT that they are falling behind ... the old Ford would just quietly re-write the goals and pretend everything is rosy. but this is not good 10k units a months is a lot .. that is not even a single product under delivering .. that is several product under delivering. The only product that could deliver extra 10k units a month is F-series and that product is mature - there is no way of adding that volume. Edge will likely never cross over 10k a month. The Taurus in the fall could increase some sales (if the plan works), the Focus might become a surprise hit, and the SUV's might resurrect as gas is cheap again, but this is alkl "maybe" there is no clearway Ford could make those 10k units. Igor Quote Link to comment Share on other sites More sharing options...
lfeg Posted February 16, 2007 Share Posted February 16, 2007 The F Series will not deliver another 10k per month. They need to sell CARS. to do this they need cars that the customers want to buy. The mindset at the domestics over the last 10 years or so has been that you cannot make money selling cars, you only make money selling trucks. This is not working today. Ford had a huge but solvable problem - find out what the customers out there want, then find a way to offer it in a car that they can make money selling. At least try to be a leader in some area. Quote Link to comment Share on other sites More sharing options...
bb62 Posted February 16, 2007 Share Posted February 16, 2007 (edited) How long was that delay again? As far as I'm concerned the opportunity cost associated with releasing a product that some didn't see as being 100% vs holding the vehicles back to correct those issues, is something that should be taken into heavy consideration. But you are not looking at the problem the way the insiders look at it. The issue is engineering resources - full stop. Any delays in any program prevent scarse resources from what Ford needs most - new product. This is a process problem at ford. They put new processes in place before they have the enablers required to do the job. Previously, ford could make the timing by throwing resources at a problem and not lose job #1 timing. They can't do that now so the trade off becomes more expensive programs (due to engineering resource limitations) versus lost sales. Not a good trade off - either way you lose. Edited February 16, 2007 by bb62 Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted February 16, 2007 Share Posted February 16, 2007 But you are not looking at the problem the way the insiders look at it. The issue is engineering resources - full stop. Any delays in any program prevent scarse resources from what Ford needs most - new product. This is a process problem at ford. They put new processes in place before they have the enablers required to do the job. Previously, ford could make the timing by throwing resources at a problem and not lose job #1 timing. They can't do that now so the trade off becomes more expensive programs (due to engineering resource limitations) versus lost sales. Not a good trade off - either way you lose. You're right I'm looking at it from a consumer's perspective. Get it done right before the customer takes delivery, or else. Case closed end of story. Yes there were sales lost because of it, but that is short term. Things need to be looked at as a whole, and when you end up throwing something out there just to get it to market you end up with quality control issues. If it were my vehicle, I'd rather wait. Also this isn't JUST a Ford issue, example the new Tundra. Quote Link to comment Share on other sites More sharing options...
bb62 Posted February 16, 2007 Share Posted February 16, 2007 You're right I'm looking at it from a consumer's perspective. Get it done right before the customer takes delivery, or else. Case closed end of story. Yes there were sales lost because of it, but that is short term. Things need to be looked at as a whole, and when you end up throwing something out there just to get it to market you end up with quality control issues. If it were my vehicle, I'd rather wait. Also this isn't JUST a Ford issue, example the new Tundra. Of course the consumer has to be satisfied with a quality product, but corporate survival (in Ford's case) means that they have to 1. please the customer, 2. maximize their corporate sales per investment dollar, 3. Utilize their scarse resources to put out as much product as possible. Right now, their are doing very little on any account, but even if we assume that the Edge is the right direction for item 1, they are failing on the other two accounts - and that doesn't bode well for corporate survival. Quote Link to comment Share on other sites More sharing options...
MKII Posted February 16, 2007 Share Posted February 16, 2007 Gee-Ford employees unhappy, morale low, no viable product-what a shocker!!!! How could their morale be high when they see a bunch of their coworkers getting the axe. Tell those disgruntled workers to get on line here at BOF, and in no time with all the posters here defending Ford NA products, moral will rise. :boring: Quote Link to comment Share on other sites More sharing options...
ebritt Posted February 16, 2007 Share Posted February 16, 2007 this is troubling .. we shall see how the year pans out ... I am happy that at least they KNOW and ADMIT that they are falling behind ... the old Ford would just quietly re-write the goals and pretend everything is rosy. but this is not good 10k units a months is a lot .. that is not even a single product under delivering .. that is several product under delivering. The only product that could deliver extra 10k units a month is F-series and that product is mature - there is no way of adding that volume. Edge will likely never cross over 10k a month. The Taurus in the fall could increase some sales (if the plan works), the Focus might become a surprise hit, and the SUV's might resurrect as gas is cheap again, but this is alkl "maybe" there is no clearway Ford could make those 10k units. Igor The only way the Focus is a "hit" is when one T-bones you at an intersection.... :happy feet: :happy feet: Quote Link to comment Share on other sites More sharing options...
sranger Posted February 16, 2007 Share Posted February 16, 2007 (edited) Since then, Mulally has stressed the need for unblushing honesty and rigorous accountability, urging his executives to set realistic goals for 2007. However, Ford's Americas team failed to meet these supposedly more realistic targets. Well, if he wants to impress me, he can admit that the Braking results of the Edge and 2008 Mariner/Escape are pathetic and that a plan is in place to fix the issue ASAP. This would be a realistic target that could be achieved this year. I think it would impress a lot of other potential buyers that have written these vehicles off over this issue... If they do that, I'll buy a loaded SLE Plus, otherwise, I'll buy somthing else... Ford management are you listening???? Edited February 16, 2007 by sranger Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted February 16, 2007 Share Posted February 16, 2007 Of course the consumer has to be satisfied with a quality product, but corporate survival (in Ford's case) means that they have to 1. please the customer, 2. maximize their corporate sales per investment dollar, 3. Utilize their scarse resources to put out as much product as possible. Right now, their are doing very little on any account, but even if we assume that the Edge is the right direction for item 1, they are failing on the other two accounts - and that doesn't bode well for corporate survival. I see where you are going with this, but I still cannot fathom a short term delay effecting the companies ability to to maximize not only sales but image over the long run. The issue with the Edge should be looked at with a big picture mentality, as there were many variables that possibly fueled the later launch: -Customer/Auto Journalist feedback resulting in changes to AdvanceTrac -Customer/Auto Journaltst feedback resulting in changes to a few cosmetic pieces -Safety organizations which fueled door padding changes resulting in excellent crash test scores I'm not saying Ford's processes are the best out there, but they have made major strides. Look at the launches today with the scarce resources available versus that of 1999 and 2000 when the Escape and Focus were launched. Quote Link to comment Share on other sites More sharing options...
Footballfan Posted February 16, 2007 Share Posted February 16, 2007 Gee-Ford employees unhappy, morale low, no viable product-what a shocker!!!! How could their morale be high when they see a bunch of their coworkers getting the axe. And I hear a bunch more are going to get the axe this Monday. The salaried people who did not retire or take the package are to be released. I am sure that morale is going to go sky-high then! As well as the increased workload. Quote Link to comment Share on other sites More sharing options...
Footballfan Posted February 16, 2007 Share Posted February 16, 2007 The fact that the plan is off track does not suprise me in the least- I could have told you this a year ago. The only way that things will get better is to purge all the executive level appointments that Bill Ford Junior has made- including Mark Fields and Don LeClair, and replace them with competent, dedicated people- those who are actually able to work more than 40 hours a week and live in the Detroit area. If anything, it would raise morale for the short term. Quote Link to comment Share on other sites More sharing options...
630land Posted February 16, 2007 Share Posted February 16, 2007 "How long was that [Edge] delay again?" Not as long as the 2007 Toyota Tundra...but when they do it, the media says 'they are making sure it's right'. But, Ford's sales issue is from the decline in BOF truck based SUV's. The 'gravy train' of fat truck profits is over. Quote Link to comment Share on other sites More sharing options...
old_fairmont_wagon Posted February 16, 2007 Share Posted February 16, 2007 All I have to say is that Ford has a finite window of time/resources to make this ship profitable. If they keep underperforming their goals with these products, then they will burn through their cash faster than they expected to. They don't have a lot of time left to get this stuff right. At their present rate of burn, they're not going to see 2011 as an independent company. Now, we know that restructuring costs will eventually peter out, and, there's another labor contract to put together between now and then, so, that burn rate could drop and their cash could stabalize somewhat. I do hope that Mazda continues their impressive results, that FOE continues to be profitable, and that Volvo manages to find a workable product mix. Hopefully, JAG will stop loosing their ass each month and LR sales will continue to generate healthy profits. The AM sale should buy a few months as well. Quote Link to comment Share on other sites More sharing options...
focus05 Posted February 17, 2007 Share Posted February 17, 2007 The Edge launch is a non-issue at this point. Ford did absolutely the correct thing with the Edge: fix the issues that we know are going to hit so that we don't hurt our customer base further. Ford, more than anything, needs a "quality" image, and an early recall or severe problems with the Edge would have only hurt Ford's image more - costing far more customers overall than the number that turned down their Edge's because they were tired of waiting. Ford does have limited resources, I don't think any of that is a question. However, Ford needs to build appropriate product lines. It doesn't mean turning out as many products as possible, regardless of launch/design/quality issues just to boost short to medium term sales. What it means is building solid, high quality and practically bulletproof cars as fast as possible, and keep them updated. Now, I have to admit, I've been extremely disappointed with Ford's products they've launch for 2008 so far. I mean, the Taurus is what it is, and I think it will do fine if the quality and safety numbers are there. I don't think that was such a bad update, but I think Ford's products are a little bit weaker than the executives might realize. My Focus is due to be replaced in 2008, but I don't want the new Focus, not because I think it will be a bad car (in fact, I would bet the driving dynamics will be near the top of the class again), but because it looks like it has multiple personalities in its design language. That's a problem for Ford. Where do I go now? Mazda for a 3? Nissan for a Sentra? Honda for a Civic? But what can they change before launch really? And that boils down to the engineering problem and exactly how those resources are being used. What should Ford be focused on? I think, overall, they've got the right balance - focusing on the completely new product due out for 2009 (MKS, F-series, Fairlane-vehicle) and managing the important lines (Edge, Fusion and Taurus are three of them). The problem is, can they respond quickly and flexibly to consumer demands with the Escape and Focus within their limited scope now? These two vehicles will not make it to 2010. They will have fallen off people's radars by then, and it will be back to nameplate triage to try to correct something that could have been corrected years earlier. I have to admit, having see all that Ford is launching for 2008, I am a bit disappointed, and only cautiously optimistic now, as well. Quote Link to comment Share on other sites More sharing options...
range Posted February 17, 2007 Share Posted February 17, 2007 hey, things could be worse, the CEO could be in jail like an unnamed Korean manufacturer of low quality rental vehicles. Quote Link to comment Share on other sites More sharing options...
Anthony Posted February 17, 2007 Share Posted February 17, 2007 hey, things could be worse, the CEO could be in jail like an unnamed Korean manufacturer of low quality rental vehicles. No, it IS worse. They aren't an unnamed Korean manufacturer of low quality rental vehicles with a CEO in jail....and they are STILL in just as much if not more trouble. Quote Link to comment Share on other sites More sharing options...
BORG Posted February 17, 2007 Share Posted February 17, 2007 It's February 2007 and Ford has already admitted that things are going to look like shit through 2009. In reality, it's probably going to look like shit even longer than that but you'll be amazed by how quickly things can change if Ford starts making money. Their marketshare could continue to tank, but all you need to do is make money and then people will give Ford another chance. Ford needs to get in shape so it can partner or be purchased by another company. Ford is going to be a very small company with minimal assets by the time they turn this ship around. Ford will be in its most delicate condition around 2009 once they've liquidated everything. I know moral is VERY low at Ford right now and that is contributing heavily to Ford's current condition. The brain drain in the company is cancerous, nobody wants to work there and everybody lives to get out. They know the future is very uncertain and the management changes at the drop of a hat. That's why it's so easy to convince people to leave voluntarily. The culture in the company has not been able to change and the only way to do it is to destroy it and that what Ford is in the process of doing right now. Quote Link to comment Share on other sites More sharing options...
range Posted February 17, 2007 Share Posted February 17, 2007 (edited) No, it IS worse. They aren't an unnamed Korean manufacturer of low quality rental vehicles with a CEO in jail....and they are STILL in just as much if not more trouble. And they aren't an unnamed German manufacturer of low quality rental cars that is being sold after their German owners figured out what a piece of crap the company and their products are. Looks like Dr. Z is going to cut off the hemorrhoid of DCX Edited February 17, 2007 by range Quote Link to comment Share on other sites More sharing options...
Ovaltine Posted February 17, 2007 Author Share Posted February 17, 2007 (edited) hey, things could be worse, the CEO could be in jail like an unnamed Korean manufacturer of low quality rental vehicles. The funny thing about that "unnamed Korean manufacturer" is, they're able to entice away people from Ford to work for them........like this guy: John Krafcik, Ford's chief engineer for Truck Chassis Engineering back in 2004. http://findarticles.com/p/articles/mi_m0KJ...117/ai_n9537922 "In 1990, Krafcik joined the Ford Motor Co. Despite having no product development experience, he gained it during his 14 years at Ford, during which time he held a number of positions, including that of being chief engineer for the Ford Expedition and Lincoln Navigator (from '98-'02). He describes the chief engineer position on a vehicle as being "very rewarding." His last position at Ford was as chief engineer for Truck Chassis Engineering, which gave him intimate involvement with the F-150 program. His interest, however, in wider aspects of product development was abiding. In April 2004, Krafcik left Ford and joined Hyundai Motor America (HMA; Fountain Valley, CA), as vice president, Corporate Planning Div." -Ovaltine Edited February 17, 2007 by Ovaltine Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted February 17, 2007 Share Posted February 17, 2007 (edited) Oh. The guy that was chief engineer of the crappy Expy and Navi (the '03-06 chassis)--vehicles which despite the presence of independent rear suspensions, still managed to ride worse than their predecessors, and which shared virtually no componentry with the F150, while still managing to ride like trucks, not cars? THAT guy? Man, he was a real asset. Sorry to see him go. Edited February 17, 2007 by RichardJensen Quote Link to comment Share on other sites More sharing options...
range Posted February 17, 2007 Share Posted February 17, 2007 Well that explains why Hyundai's customers are primarily rental car companies, and people with low credit scores who can't get a loan on a real car. Quote Link to comment Share on other sites More sharing options...
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