Autoextremist: Ford in Free Fall

[jpd80]

 

I agree with him to an extent, though. Strategic cutting in a dire situation like Ford was in back then made sense. Ford is hardly in a dire situation now, and all we've heard about is cut, cut, cut.

It's a negative spin for sure but using the word "cut" is important to Wall Street and investors

the same under Mulally would have been presented as a Recurring saving of "X"

 

And this move is all about where Ford wants to be in five years, flush with profits

from Utility sales and not having to worry about under performing car plants.

This is about not waiting for the death before changing....

 

It was poorly presented on what would happen with cars purely the shock value

and reaction went beyond what Ford expected and Farley's additional comments

regarding white space vehicles was added simply to calm down some perceptions.

Edited May 8, 2018 by jpd80

[akirby]

The whole notion of cost cutting is often misintepreted. The key is whether you're cutting costs in one area to invest in other areas or whether you're just cutting costs to boost profits and cutting future investments. The first one, if done right, will be a big benefit in the long run. The latter is a recipe for disaster because any short term profit gains will be outweighed by lack of product or outdated products in the future.

 

Ford is diversifying. They're developing a platform for commercial autonomous vehicle management that not only they can use but that they can sell to other companies. That has the potential to provide big revenue and big profit and has nothing to do with car sales per se. Same with other mobility/connected car applications.

 

On the vehicle side of the business you have a big push for more utilities, hybrid everything and EVs. And Ford has limited factory space.

 

When you put all that together, Ford simply can't afford to do all that and keep building the same vehicles as today. Something has to give. First it was Focus and then Fusion.

 

So you give the factory space to the new utilities, hybrids and EVs and you take the resources you would have invested in Focus and Fusion and you give that to the other initiatives.

 

That's how corporate funding works. It's always a fixed barrel of money that you have to divvy up to each project each year. You can't just go get more money to do new things all the time.

[rmc523]

The whole notion of cost cutting is often misintepreted. The key is whether you're cutting costs in one area to invest in other areas or whether you're just cutting costs to boost profits and cutting future investments. The first one, if done right, will be a big benefit in the long run. The latter is a recipe for disaster because any short term profit gains will be outweighed by lack of product or outdated products in the future.

 

Ford is diversifying. They're developing a platform for commercial autonomous vehicle management that not only they can use but that they can sell to other companies. That has the potential to provide big revenue and big profit and has nothing to do with car sales per se. Same with other mobility/connected car applications.

 

On the vehicle side of the business you have a big push for more utilities, hybrid everything and EVs. And Ford has limited factory space.

 

When you put all that together, Ford simply can't afford to do all that and keep building the same vehicles as today. Something has to give. First it was Focus and then Fusion.

 

So you give the factory space to the new utilities, hybrids and EVs and you take the resources you would have invested in Focus and Fusion and you give that to the other initiatives.

 

That's how corporate funding works. It's always a fixed barrel of money that you have to divvy up to each project each year. You can't just go get more money to do new things all the time.

 

Tesla does!

 

[akirby]

 

I agree with him to an extent, though. Strategic cutting in a dire situation like Ford was in back then made sense. Ford is hardly in a dire situation now, and all we've heard about is cut, cut, cut.

 

 

To be fair, Ford has made plenty of announcements about future investments, new businesses, etc. But they've all been separate so it's difficult for folks to put the pieces together.

 

This is where Ford's PR has totally sucked - they should explain clearly where they are investing and why they are cutting in some areas. At the same meeting.......

[akirby]

 

Tesla does!

 

 

Good point. But I wonder how much longer that cash register will stay open?

[mackinaw]

This year's Annual Shareholders meeting, on Thursday, May 10th, could be interesting.

[jasonj80]

 

Good point. But I wonder how much longer that cash register will stay open?

I'm sure the American Greed Special on it has already been made.

 

Though the truth is until you don't have any more suckers to believe in it. Problem with Tesla is that because of the gambling done on the stock (from Musk himself) it is really hard to get a huge picture of the company. I suspect it will be very Enron like in its fall as well, in speed and value. And then a bunch of people looking around wondering wow we saw it coming but didn't think it would actually happen.

 

Ford at least will just get bought out if things get really really bad. Family would rather sell and make millions and lose control, than lose everything and control in a bankruptcy.

[mackinaw]

I'm sorry but this is NOT the way business works in real life. Ford has a million moving pieces and a board of directors. It's incredibly reductive to believe it's actually a simple soap opera.

 

And PDL makes money stirring shit up.

 

Ford is doing all the right things after years of deliberation and analysis, this doesn't just happen.

 

The more I think about Peter's piece, the more I agree with Assimilator. I find it hard to believe that Farley is dictating to Hackett what Ford should do. There is a management team and a Board of Directors who have a major say in what he company will be doing. And Peter does carry grudges. He absolutely detested J Mays when he ran Ford styling. And we all know what he thinks of Sergio. Farley is only the latest.

[rmc523]

 

 

To be fair, Ford has made plenty of announcements about future investments, new businesses, etc. But they've all been separate so it's difficult for folks to put the pieces together.

 

This is where Ford's PR has totally sucked - they should explain clearly where they are investing and why they are cutting in some areas. At the same meeting.......

 

This. They need to "shroud" the negative with a positive in the same message. Not "were dropping these models, *mic drop* " without any further info for months.

[grbeck]

Somewhere, Farley referred to the Honda Crosstour as something like the "white space" vehicles, but "better looking". Anyone else see that?

 

I missed that part of his presentation.

 

"Better-looking than the Crosstour" isn't exactly a high bar to clear.

 

What wasn't - the Pontiac Aztek? Acura ZDX?

[akirby]

I missed that part of his presentation.

 

"Better-looking than the Crosstour" isn't exactly a high bar to clear.

 

What wasn't - the Pontiac Aztek? Acura ZDX?

 

Always thought the crosstour was more of a modern reincartion of a Pacer.

[akirby]

The more I think about Peter's piece, the more I agree with Assimilator. I find it hard to believe that Farley is dictating to Hackett what Ford should do.

Is that what Pete said? Or was he just talking about Farley’s poor PR and people skills?

[rmc523]

Is that what Pete said? Or was he just talking about Farley’s poor PR and people skills?

 

He said this, which implies it was Farley's idea, so therefore they did it (dictated to Hackett).

 

 

 

And then there was the “we’re going to get out of the car business” decision that turned out to be an unmitigated PR disaster, because it was handled poorly and came off as a knee-jerk pronouncement that hadn’t been thought through. It turns out that the idea was Farley’s (no big surprise), wittingly or unwittingly aided and abetted by CFO Bob Shanks. And internally it bore the signature of a classic Machiavellian move by Farley as well, because Joe Hinrichs wasn’t even aware that it was going down until after the fact, which is almost beyond comprehension. (Editor-in-Chief's Note: I spoke with Mark Truby, Ford's PR Chief, and he said that Joe Hinrichs was aware of the car decision. I stand corrected. -PMD)

 

 

I just find it hard to believe that he's pulling this many strings and somehow responsible for everything.

[mackinaw]

Is that what Pete said? Or was he just talking about Farley’s poor PR and people skills?

 

I misspoke regarding that. I made an assumption when I shouldn't have. Apologies.

 

But you have to wonder. Doesn't Farley have a boss? Doesn't he undergo periodic performance reviews like everybody else? If he's such the conniver, don't you think Bill Ford, Mark Fields, or somebody, would have called him out on that? Does he have the entire management team and Board of Directors bamboozled? Somehow I doubt that.

 

I enjoy reading Peter's rambling, actually met the guy once too, but if he decides you're a bad guy, expect endless criticism. Again, look at Sergio, Dan Ammann, J Mays. Peter even dumped on Carroll Shelby, many years back (even though he eventually warmed up to the guy).

[akirby]

 

He said this, which implies it was Farley's idea, so therefore they did it (dictated to Hackett).

 

I still think that was referring to the media announcement that they're getting rid of cars and not anything to do with the actual vehicle decisions. The decision on which vehicles to produce or not and when/where are not something Farley would be able to make on his own. Nor would it be possibly surprising to Hinrichs.

 

If you're planning to keep making a vehicle for the next 2-4 years there is no reason to announce that it's being discontinued. That's where Farley screwed up and that he most certainly has control over.

[akirby]

 

I misspoke regarding that. I made an assumption when I shouldn't have. Apologies.

 

But you have to wonder. Doesn't Farley have a boss? Doesn't he undergo periodic performance reviews like everybody else? If he's such the conniver, don't you think Bill Ford, Mark Fields, or somebody, would have called him out on that? Does he have the entire management team and Board of Directors bamboozled? Somehow I doubt that.

 

I enjoy reading Peter's rambling, actually met the guy once too, but if he decides you're a bad guy, expect endless criticism. Again, look at Sergio, Dan Ammann, J Mays. Peter even dumped on Carroll Shelby, many years back (even though he eventually warmed up to the guy).

 

It sounds like this opinion of Farley is shared within the industry though even outside Ford. I do admit that he might be embellishing things a bit.

[mackinaw]

 

It sounds like this opinion of Farley is shared within the industry though even outside Ford.

Not sure this is true either. Farley did spend 17 years at Toyota and his career was on an upward trajectory.

 

Everybody has their detractors. I'm sure there are folks within Ford, and the industry, that despise Bill Ford. If you're in an a position of power, you're going to ruffle feathers. That's just the way it is.

 

My main objection is that people read this piece by Peter and consider it to be the gospel truth. Maybe it's not.

[Assimilator]

Ford probably should NOT have clarified that they were phasing out their sedans, only that they were investing into non-sedans going forward. I would have HATED that, but it would also let Ford quietly phase out their cars while everybody just continued to speculate on the future of the car with CD6 dreams and 4-door Mustang wishes.

 

I saw the car/sedan cull coming a LONG time ago, only poor auto journalists (like PDL) come up with ridiculous simplifications and behind the scenes personal dramas. Any auto analyst who pays attention to product and consumer trends (and buys vehicles) would have seen this.

 

Ford is in the opposite of a free-fall, it's extremely ambitious with a grand scale product plan for the new decade that is very innovative. I think it's LONG overdue for a company that needs to spend less time making commodities and more time making icons...again something a well researched journalist should recognize with all the pieces placed right in-front of them. Even if Ford doesn't put it together well, at least somebody who does this for a living should understand how visionary this is. Ford thrives when it takes bold steps, we might see them as risky but they are thinking many steps ahead and they always seem to land them right. Nothing Farley has done or said has disappointed me, even as vague as it is, he has said everything I wanted to hear about Utilities, Hybrid, and Services in ways nobody else has.

Edited May 9, 2018 by Assimilator

[jpd80]

Ford probably should NOT have clarified that they were phasing out their sedans, only that they were investing into non-sedans going forward. I would have HATED that, but it would also let Ford quietly phase out their cars while everybody just continued to speculate on the future of the car with CD6 dreams and 4-door Mustang wishes.

 

I saw the car/sedan cull coming a LONG time ago, only poor auto journalists (like PDL) come up with ridiculous simplifications and behind the scenes personal dramas. Any auto analyst who pays attention to product and consumer trends (and buys vehicles) would have seen this.

Good call.

Ford could have kept to a story of sourcing Focus (and Fusion) from China for now

and focused on the new product coming from North American plants.

 

That would have given them room to manoeuvre in the next few years if the market

went up or down on cars....

 

Maybe that was the original plan for Mexico (Hermosillo) before San Louis Pitosi was cancelled...

SLP cancelled = AVs to Flat Rock No2 and rest to Hermosillo, Focus/Fusion get bumped.

Edited May 9, 2018 by jpd80

[Bob Rosadini]

As I said when I started.." So Cars Don't Sell...."

 

"When Farley was lured away from Toyota, I thought he was going to put Ford back on the map in terms of cars. Or was that an Alan Mulally vision that left when he did? Or was Farley held back by Fields???"

Any opinions? Just hard to believe that all the negativity directed at Farley is suddenly a big story. If he truly is that much of an a-hole, it sure has been a secret at least until now-or should I say to this guy who gets most of his Ford info on a daily basis from this site or what I read in the WSJ.

[akirby]

https://jalopnik.com/5823432/ford-marketing-head-fuck-gm

[rperez817]

Ford is in the opposite of a free-fall, it's extremely ambitious with a grand scale product plan for the new decade that is very innovative. I think it's LONG overdue for a company that needs to spend less time making commodities and more time making icons...again something a well researched journalist should recognize with all the pieces placed right in-front of them. Even if Ford doesn't put it together well, at least somebody who does this for a living should understand how visionary this is. Ford thrives when it takes bold steps, we might see them as risky but they are thinking many steps ahead and they always seem to land them right. Nothing Farley has done or said has disappointed me, even as vague as it is, he has said everything I wanted to hear about Utilities, Hybrid, and Services in ways nobody else has.

 

Yes sir. Ford lost its way between the time Alan Mulally left the company and when Jim Hackett became CEO. But now Ford is taking ambitious steps to stay relevant in the future. The fact Ford isn't doing the "same old same old" is something to celebrate.

 

I agree that Farley hasn't done anything disappointing. Same with Hackett. They're good businessmen. They got vision.

[jpd80]

PDL's assumption that Farley was sent to Europe as a punishment is not exactly true,

a rising star has to prove that he can run a P & L properly to keep a seat at the big table.

[AlRozzi]

I am not entirely accepting what he is implying regarding termoil within Ford management.

His articles always seem to take an extreme point of view. There is a complete saturation of

sources for news and information and it takes attention-grabbing headlines to get consumers of news to take notice.

[akirby]

His articles always seem to take an extreme point of view.

 

Well he calls himself the autoextremist, so that's kind of a given.