Who should get the credit?

[goingincirclez]

I was thinking the other day how nice it is to see Ford making progress, getting recognition, and turning the corner, even in these uncertain times.

 

I mean we all know the short list of accomplishments, in no particular order:

 

- Ecoboost

- Fiesta

- Fusion Hybrid

- refreshed Fusion, Mustang, F-150

- Raptor

- FE initiatives

- Quality gains

 

 

But the counterpoint to all this, is the bloodletting that began a few years ago and continues today. I'm talking about all the white-collar workers that began getting the axe under Nasser, and the acceleration under current management. Are the current results resultant from, or in spite of, these actions?

 

I seem to recall several posts from TheOldWizard and others every time another round of layoffs was announced, essentially stating "There goes THAT product" "They're getting rid of the true knowledge" "No more R&D there" "The low-salary guys left don't know what they are doing" etc etc etc. Which was doubtlessly true to an extent, if not to the degree of vested-interest alarm raised by our respectable insider.

 

But then again... it also seems that Ford has been a little more transparent of late regarding the outsourcing of components:

 

- Bosch and Ecoboost

- the Leaf Gauges on the Fusion Hybrid (dammit I should look this up I know but I don't have the time now - they were designed and developed by a tech co. in New York)

- Fiesta, Focus from FoE

- the infamous "Toyota License" (yeah I know, I know... but Ford publicly acknowledged it nonetheless)

- general supplier agreements

etc.

 

So... if easy money has been saved by cutting the expensive tenured, knowledgeable legacy employees, in favor of green and/or fresh-from-school new hires... how much of Ford's resurgence is directly attributable to remaining (or new) in-house talent, versus outsourced and hired-gun shops?

 

Remember, even the CEO is a Hired Gun. He doesn't really have any "vested interest" so to speak, save for his own reputation (it is a credit to his character that he DOES take things seriously this late in his career... but a lot of guys don't). Also the heads of Marketing and Quality Development were recently yoinked from Toyota... they didn't come up through Ford at all.

 

 

Is Ford Motor Company just becoming a figurehead for collaborative outsourcing? Or have they truly become that adept at cutting just the pure rotten deadwood (and if that's the sole case WHAT TOOK THEM SO DAMN LONG)? Do they have a process to develop and retain talent in-house as opposed to overpaying on the free market?

 

 

 

Another scenario: In 2002 or 2003, Bill Ford made his infamous public pledge to increase fuel economy by 25% in just a couple years. He was embarrassingly proved wrong. Massive layoffs of management. engineering and R&D since ensued without filling those seats or replacing the corporate knowledge bank. But now, real strides toward FE improvement are at hand. So again - was there really that much deadwood holding them back, Is it all just coincidence of timing, or did Ford say "screw it" and outsource to more competent facilities?

[RichardJensen]

First of all, the separation between FoE & FNA on certain levels is much exaggerated.

 

Secondly, it's not likely that Ford would ever have cooked up a twin-turbo DI setup on its own.

 

The only difference is that Ford, in the past, might have had its own engineers develop the management software. Now that's being outsourced to Bosch.

 

Ford has always worked collaboratively with outside companies. For instance, the ControlTrac AWD system (the first fully electronic AWD system) was developed by Borg-Warner & Ford. B-W brought a prototype to Ford and they developed it jointly.

 

While the Bosch system was probably farther along than the B-W control trac (which was allegedly a bunch of breadboards in the back of a station wagon), it has undoubtedly been polished, refined, and prepped for production in close collaboration with Ford engineers.

 

Third--with global engineering, the need for certain engineers is reduced. Reduce the number of 4-cylinder engines and you reduce the number of people needed to design them, etc...

 

Fourth, while Farley did come from Toyota, the head of manufacturing, Joe Hinrchs came from the Ryan Group. The head of quality, Bennie Fowler, has been with Ford for 22 years.

[MKII]

Ford USA, was an island in an increasingly globalized world. Toyota and other rivals were able to build vehicles that sold anywhere, but Ford operations in North America, Europe, Asia, and South America shared little more than a logo. Even that was contentious, Schroer (ex Ford's global marketing chief) recalls. "It took two years to agree that we should use the same Ford oval for the planet. That's how separatist it was."

 

Wasn't it Nasser in 2000, promised to raise the fuel economy of its SUV fleet by 25 percent over five years, but Bill Ford promised to build 250,000 hybrids by 2010.

 

I think its as simple as past Ford N.A. thinking was all about short term because of lacking clear direction, now its about investment into long term sustainability thanks to Mulally.

[lfeg]

Hey, if it is an issue, just remember who hired the hired guns. Sometimes an outsider can sell you something better than what you have developed yourself. I take it as a break in the Not Invented Here attitude.

[goingincirclez]

Hey, if it is an issue, just remember who hired the hired guns. Sometimes an outsider can sell you something better than what you have developed yourself. I take it as a break in the Not Invented Here attitude.

 

I understand the logic there, and I don't necessarily fault Ford for taking these measures in the near term, to right the ship as it were.

 

But what happens when these hired guns inevitably move to the next greener pasture? What is the process to keep some of this talent in-house?

 

Remember, Ford already squandered their internal Telnack legacy. And Bub Lutz has been roundly criticized for not developing processes but more relying on "gut". Relying on hired help is more of the same.

 

I simply don't want to see Ford leapfrogged when Bosch sells something to the next customer, or Mullaly decides to ride to the sunset, and so on. It's good that these partnerships are bearing fruit now, but nothing lasts forever.

 

Plus I'm genuinely curious as to whether all the upper bloodletting really had that marked of an effect on current progress. To wit: did cutting internal personnel help get Ford to where they seemingly are... or could they have been even better off had some of them been retained?

[Ralph Greene]

How about some credit to William Clay Ford himself. He knew he didn't have the tallent or drive to get the job done, but was smart enough to bring someone in who did.

[Hemiman]

I was thinking the other day how nice it is to see Ford making progress, getting recognition, and turning the corner, even in these uncertain times.

 

I mean we all know the short list of accomplishments, in no particular order:

 

- Ecoboost

- Fiesta

- Fusion Hybrid

- refreshed Fusion, Mustang, F-150

- Raptor

- FE initiatives

- Quality gains

 

 

But the counterpoint to all this, is the bloodletting that began a few years ago and continues today. I'm talking about all the white-collar workers that began getting the axe under Nasser, and the acceleration under current management. Are the current results resultant from, or in spite of, these actions?

 

I seem to recall several posts from TheOldWizard and others every time another round of layoffs was announced, essentially stating "There goes THAT product" "They're getting rid of the true knowledge" "No more R&D there" "The low-salary guys left don't know what they are doing" etc etc etc. Which was doubtlessly true to an extent, if not to the degree of vested-interest alarm raised by our respectable insider.

 

But then again... it also seems that Ford has been a little more transparent of late regarding the outsourcing of components:

 

- Bosch and Ecoboost

- the Leaf Gauges on the Fusion Hybrid (dammit I should look this up I know but I don't have the time now - they were designed and developed by a tech co. in New York)

- Fiesta, Focus from FoE

- the infamous "Toyota License" (yeah I know, I know... but Ford publicly acknowledged it nonetheless)

- general supplier agreements

etc.

 

So... if easy money has been saved by cutting the expensive tenured, knowledgeable legacy employees, in favor of green and/or fresh-from-school new hires... how much of Ford's resurgence is directly attributable to remaining (or new) in-house talent, versus outsourced and hired-gun shops?

 

Remember, even the CEO is a Hired Gun. He doesn't really have any "vested interest" so to speak, save for his own reputation (it is a credit to his character that he DOES take things seriously this late in his career... but a lot of guys don't). Also the heads of Marketing and Quality Development were recently yoinked from Toyota... they didn't come up through Ford at all.

 

 

Is Ford Motor Company just becoming a figurehead for collaborative outsourcing? Or have they truly become that adept at cutting just the pure rotten deadwood (and if that's the sole case WHAT TOOK THEM SO DAMN LONG)? Do they have a process to develop and retain talent in-house as opposed to overpaying on the free market?

 

 

 

Another scenario: In 2002 or 2003, Bill Ford made his infamous public pledge to increase fuel economy by 25% in just a couple years. He was embarrassingly proved wrong. Massive layoffs of management. engineering and R&D since ensued without filling those seats or replacing the corporate knowledge bank. But now, real strides toward FE improvement are at hand. So again - was there really that much deadwood holding them back, Is it all just coincidence of timing, or did Ford say "screw it" and outsource to more competent facilities?

 

 

You forgot the pending Diesel Panther. 3.6L or 4.4L. Mainly a NA project.

[old_fairmont_wagon]

Well, in the big picture, isn't 99.9% of Ford hired guns in relation to the Ford family? I mean, lets be real, Ford motor company is controlled by the Ford family. It can be said that it is their company. I bet less than 20 actual Ford family members (within three generations I'd guess) actually work for Ford Motor Company in any capacity (save for board seats, etc). So, where do you draw the line with "hired gun" vs. true ford employee. If you are just talking about outsourcing, then, you have to go back decades to find a point when large portions of Ford vehicles weren't outsourced. Interior bits have been long supplied by outside companies. Transmissions have come and gone that were from outside suppliers. Ford engines have had heavy design input from 3rd parties (Duratec 2.5L-3.0L V6), or have been wholely sourced outside of the company (Taurus SHO Yamaha V6 and V8).

 

Having outside companies take the initial development risks on new tech for cars is a great way for automakers to insulate themselves from the potential losses from those development activities. For every new innovation or product that Ford came out with, how many others were conceived or went through initial development at Ford only to be put aside or completely dropped due to unsolvable problems or other technical limitations that made them unfeasable. Now, instead of Ford wasting gobs of money on failed R&D projects, they go into collaboration with 3rd parties on promising new things, or, outright purchase the wares of other companies when they are fully developed. Yes, it does make the ones they do use more expensive from an ongoing cost standpoint, but, it saves truckloads of money in funding your own research.

 

The only worry I have with the outsourcing policy is that the outsourced to companies are much smaller than the automakers and, as such, are more prone to failure and ceasing operations. If I was Ford, I would tend to buy the design outright for critical components, or at least negotiate an enduring production permission contract with them and build the item in house. In my world, Ford still has its own transmission plants and produces under its own roof designs from Aisin and Borg-Warner so in the unlikely event either failed, Ford would still be able to have an uninterrupted supply of them. That previous sentence was just an example of what could be done, not a proposed course of action. But, there are a lot of tooling expenses there, so, there is risk and cost there.

[Ron W.]

How about some credit to William Clay Ford himself. He knew he didn't have the tallent or drive to get the job done, but was smart enough to bring someone in who did.

 

 

I agree, it took a lot of courage to admit someone else could do the job better.

[theoldwizard]

You forgot the pending Diesel Panther. 3.6L or 4.4L. Mainly a NA project.

I don't know what the 3.6L is.

 

The 4.4L and the Scorpion (6.4L?) base engines were primarily designed by Ford NA with some input from FoE. The control software is being outsource to the 3rd different vendors (7.3L was done in house and the outsourced to Visteon. The 6.0L and 6.4L are done by Siemens. Future is Bosch with maybe 25-33% Ford input.)

[theoldwizard]

How about some credit to William Clay Ford himself. He knew he didn't have the talent or drive to get the job done, but was smart enough to bring someone in who did.

Just to be clear. That was William Clay Ford, Jr. (Billy) who made that call.

[battyr]

Outsourcing Technology is the Fastest, least risky and most profitable way to run a car company. You get the best technology from around the world. The developers of the technology takes on the risk of developing the technology. You only have to make deals with the winners. You can put most of your reasources into developing new vehicles that your customers want.

 

The bad part is that your company must have a leadership in Marketing. When you buy someone elses technology, you must getting on the market as fast as posible, and sell as much as posible before your competition start using it. If your customers don't want it, you lose. If you have quality problems with the technology then you have a lot of products on the market that have to be fixed.

 

A better way is what Ford has done with their Powershift transmissions. Ford did a lot of work on DCT transmissions. They had a lot of patents but not a perfected transmission. Rather than letting the patents expire, they shared their technology with Getrag and developed a better transmission as a joint venture.

 

Bosch is getting the credit for EcoBoost, but I see them only doing the DI part. Other companies are doing the turbo end, and the VVT end. Ford is making it all work together to get results.

 

Once Ford gets cash they need to do a lot more research, develop patents and implement them as joint ventures.

[battyr]

I don't know what the 3.6L is.

 

The 4.4L and the Scorpion (6.4L?) base engines were primarily designed by Ford NA with some input from FoE. The control software is being outsource to the 3rd different vendors (7.3L was done in house and the outsourced to Visteon. The 6.0L and 6.4L are done by Siemens. Future is Bosch with maybe 25-33% Ford input.)

 

Ford had spent a lot of money on these engines. Now it looks like EocBoost might be a better idea.

[fordmantpw]

Is the outsourcing a bad thing though? Let those who do that task best handle it. Rather than being a jack of all trades, do what you do best, and leave the rest to those who do it the best.

[theoldwizard]

I have had this debate with others on this board before. Being a retired engineer, I would certainly like to see more "technology" developed inside rather than outside.

 

The problem with "buying" technology is that you almost never get an "exclusive" on it. With Bosch or Getrag or Borg Warner, your "just another customer". You also are coerced into buying a complete systems instead of buying lower cost parts from other suppliers.

 

Second, if the supplier is large enough, then "the flea on the tail can wag the whole dog". You get your parts from the supplier on their time table and pay through the nose for changes.

 

Third, these system suppliers have no reason to "play nice with other" suppliers. Why would Bosch engine controls want to play with Continental transmission or brake controls, especially when Bosch sells transmission and brake controls ? Ford is stuck in the middle and may not have the manpower to sort out the interfaces.

 

The good thing about buying technology is the reduction in engineering cost. If your volume is low enough (like hybrid which has multiple "purchased" technologies) then the addition costs added on to each part is easily absorbed and may actually be less than if you designed it yourself. Of course if the volume shoots up (like EcoBoost) you could have some serious cost problems.

 

One other "trap" that needs to be avoided is the assumption that a supplier that does a good job at a good price in Europe, will be capable of doing the same in the US. This could be as simple as the supplier's home office is on the other side of the world and decisions take an extra day or two.

Edited January 6, 2009 by theoldwizard

[theoldwizard]

2 more problems with outsourcing technology.

 

Supplier going out of business (Delphi is still in Chapter 11, Visteon could go Chapter 7 any day).

 

Supplier could sell out (Motorola, who was a supplier of PCMs for many, many years was bought by Continental; Siemens VDO was also bought by Continental) to another supplier who has a "different" way of doing business or wants to sell you different technology.

Edited January 6, 2009 by theoldwizard

[battyr]

I have had this debate with others on this board before. Being a retired engineer, I would certainly like to see more "technology" developed inside rather than outside.

 

The problem with "buying" technology is that you almost never get an "exclusive" on it. With Bosch or Getrag or Borg Warner, your "just another customer". You also are coerced into buying a complete systems instead of buying lower cost parts from other suppliers.

 

Second, if the supplier is large enough, then "the flea on the tail can wag the whole dog". You get your parts from the supplier on their time table and pay through the nose for changes.

 

Third, these system suppliers have no reason to "play nice with other" suppliers. Why would Bosch engine controls want to play with Continental transmission or brake controls, especially when Bosch sells transmission and brake controls ? Ford is stuck in the middle and may not have the manpower to sort out the interfaces.

 

The good thing about buying technology is the reduction in engineering cost. If your volume is low enough (like hybrid which has multiple "purchased" technologies) then the addition costs added on to each part is easily absorbed and may actually be less than if you designed it yourself. Of course if the volume shoots up (like EcoBoost) you could have some serious cost problems.

 

One other "trap" that needs to be avoided is the assumption that a supplier that does a good job at a good price in Europe, will be capable of doing the same in the US. This could be as simple as the supplier's home office is on the other side of the world and decisions take an extra day or two.

 

I agree that Ford needs to have control and own technology rights over key technologies.

 

The good thing with the Power Shift Transmission is that Getrag can produce two different DCT. One that they can make and sell to anyone. A better one using Ford patents, that is made jointly with Ford, for Ford. If anything happens to Getrag, the joint venture is still independant and can carry on. If Getrag wants to sell transmissions from the jointventure to other manufacturers, then they have to negotiate a deal with Ford.

 

On the other hand, Microsoft Sync is not a key technology. Ford would not have been able to develop and market it themselves. Ford made money by being the first to use. Since Microsoft is selling it to other companies, it becomes a standard technology. Ford does not get stuck with a non-standard orphan technology.

More reason for people to buy Sync. Ford keeps it's advantage because they get Version 2 when everyone else sells version 1. Also since Ford joinly developed Sync, they can integrate it easily with other new electronic functions that can be Ford only.

[fordmantpw]

2 more problems with outsourcing technology.

 

Supplier going out of business (Delphi is still in Chapter 11, Visteon could go Chapter 7 any day).

 

Supplier could sell out (Motorola, who was a supplier of PCMs for many, many years was bought by Continental; Siemens VDO was also bought by Continental) to another supplier who has a "different" way of doing business or wants to sell you different technology.

 

So in theory, outsourcing is the way to go.

 

In practice, there is much more to the equation.