WSJ Front Page Story on Hackett

[jpd80]

But the biggest issue Wall Street has is with Jim Hackett, and it’s no wonder why. The professorial, touchy-feely Hackett talks around and around suggesting the best ways for things to happen, and the way everyone should feel while things are happening, but in true “I’ve-been-lost-on-campus-so-long-I-have-grown-completely-irrelevant-and-out-of-touch” fashion, he is nothing more than an expert air salesman at this juncture. And as we well know – or at least you should know by now – selling air counts for exactly zero in this business. “Selling Air” is the modern-day sequel to the Emperor’s New Clothes, and it’s much ado about nothing because, well, it’s much ado about nothing. So, as much as I loathe the calculated fleecing that’s part of Wall Street’s relentless M.O., the professional scammers there understand when they’re being broadcast to by an air seller, and they don’t much cotton to it. I don’t either.

 

So, Ford has a major league image problem, and much of it lies with the fact that Jim Hackett doesn’t exactly engender confidence on any level. And the Ford Motor Company simply can’t afford that kind of underwhelming image-wrangling, because blue-sky platitudes and touchy-feely experiential notions don’t add up to a winning hand.

 

That's gold.....

 

The great disconnect for me is on the one hand, you have this broad brushed financial goal

of 8% return across the whole company and a belief that North America can be 13% return....

Hackett is an ideas man with very little idea on how to execute or even articulate a plan like that

and then the moment, any sort of global headwind is experienced by Ford, He goes to ground...

 

The saving grace is this marvelous production roll out that will elevate Ford image in the eyes of buyers

but it comes with the decision to axe cars because North America can't be bothered giving fresh products

(they're making anyway..) a chance to claw back some sales of those rusted on car buyers.It's like Ford NA

is happy with its total annual sales number of just over 2.5 million and is simply changing the product mix

in that volume with little regard to actually growing total sales.

Edited August 24, 2018 by jpd80

[Harley Lover]

 

It's like Ford NA is happy with its total annual sales number of just over 2.5 million and is simply changing the product mix

in that volume with little regard to actually growing total sales.

 

 

That is a very accurate assessment. The problem is that Ford believe that their take on the market is correct (trucks, CUVs). If they are wrong, they are screwed royally.

[2016RS]

The lack of experienced knowledge is a huge factor when you push that knowledge out the door in one large swoop.
But at least the Millennials are happy with their Dearborn Campus.... (Romper Room)

[jpd80]

That is a very accurate assessment. The problem is that Ford believe that their take on the market is correct (trucks, CUVs). If they are wrong, they are screwed royally.

While I do believe Ford is right to engage the market with Ranger and more Utilities, I don't understand Ford's eagerness

to make Focus and Fusion go away by running them into the ground and then saying that customers don't want them.

[silvrsvt]

While I do believe Ford is right to engage the market with Ranger and more Utilities, I don't understand Ford's eagerness

to make Focus and Fusion go away by running them into the ground and then saying that customers don't want them.

 

They are a sunk cost along with a shrinking market, just easier to get rid of them till replacements are ready.

[akirby]

To keep Focus and Fusion they’d have to build a new factory in North America and there isn’t enough margin in those products right now to justify it (or to bother importing them). Once the new platforms are launched Ford will have the ability to shift production from utilities to cars if the market changes. And they’re not killing Focus or Mondeo in Europe. So this isn’t as risky as some believe. Platform consolidation should allow them to mix cars and utilities to meet market demands.

 

As for Hackett, I agree he’s not CEO material from a PR standpoint but that doesn’t mean the plans are not sound from a business case perspective. And yes, Ford would rather sell 2 million vehicles at a 8% margin than 3 million at a 4% margin.

[Bob Rosadini]

While I do believe Ford is right to engage the market with Ranger and more Utilities, I don't understand Ford's eagerness

to make Focus and Fusion go away by running them into the ground and then saying that customers don't want them.

Hasn't that been the model? Self fulfilling prophecy-make no upgrade however slight, no marketing effort and bingo- "can't justify this anymore".

Yes-they didn't want Rangers- Toyota said thx very much and slapped TRD decals ll over their Tacomas and they sold. Etc etc.

 

And AK I certainly understand the plant capacity issue. But was/is every facility right now running at two shifts? And yes I know, Ford has all kinds of analysts looking at this stuff-just seems to a "civilian" that the easiest route is to throw the bath water out-with the baby.

 

Oh and giving my avatar due respect, How many Charger, 300 sales would Ford have kept if the Panther in its last years had minor changes made to it.??

 

And I'll spare you my thoughts about the Ford loader/backhoe I ran while working my way through school

[Bob Rosadini]

To keep Focus and Fusion they’d have to build a new factory in North America and there isn’t enough margin in those products right now to justify it (or to bother importing them). Once the new platforms are launched Ford will have the ability to shift production from utilities to cars if the market changes. And they’re not killing Focus or Mondeo in Europe. So this isn’t as risky as some believe. Platform consolidation should allow them to mix cars and utilities to meet market demands.

 

As for Hackett, I agree he’s not CEO material from a PR standpoint but that doesn’t mean the plans are not sound from a business case perspective. And yes, Ford would rather sell 2 million vehicles at a 8% margin than 3 million at a 4% margin.

AK......Isn't "PR" a huge factor when you are talking about the guy at the top? I'll throw in the word "culture" too. And how about "leadership"? We have read nothing but negatives about this "cerebral" guy who into his second year can't convince the financial world as well as his own troops that he has a clue-or so it seems to me.

[akirby]

I do wonder how well the new Focus would sell (and a truly updated Fusion) and whether they could recapture those lost Titanium sales. But there is certainly no guarantee there. Even the brand new Accord and Camry are down considerably. So you can’t say that the lack of updates is the cause of lower sales and less profitable sales - although it might be a small contributor.

 

As for Hackett - what I’m saying is he might not be the ideal CEO but that doesn’t mean the business plan is flawed. I still believe that Hackett was only hired for 2-3 years to right the ship and fix what Fields messed up, then he’ll probably go back to a strategy/technology role.

[Harley Lover]

I still believe that Hackett was only hired for 2-3 years

 

If he continues along his current path, that will be another self fulfilling prophecy.

[jpd80]

I do wonder how well the new Focus would sell (and a truly updated Fusion) and whether they could recapture those lost Titanium sales. But there is certainly no guarantee there. Even the brand new Accord and Camry are down considerably. So you can’t say that the lack of updates is the cause of lower sales and less profitable sales - although it might be a small contributor.

It's very much a momentum thing, keeping products decently refreshed enough to keep those Titanium sales coming.

That momentum was lost in late 2014 when Ford refused the global update to Focus (bringing the 1.5 EB and 6AT / 6MT).

After that point, the product mix collapsed to SE with up to $4,500 incentives and gave Ford the excuse it was looking for.

I don't know how much could have been done for Fusion but suiting it up with the most minimal face lift was really cynical.

The moment Mulally was out the door, Fields began on this , winding back refreshes to steer buyers to Utilities.

 

You are right, the momentum built up by CD4 Fusion was all destroyed and I doubt Ford could convince Titanium

buyers to return, that would have taken at a minimum, a major refresh of the body, copilot 360 and 8-speed auto.

That sort of planning requires years, so well before Hackett and we're back to Fields.

 

As for Hackett - what I’m saying is he might not be the ideal CEO but that doesn’t mean the business plan is flawed. I still believe that Hackett was only hired for 2-3 years to right the ship and fix what Fields messed up, then he’ll probably go back to a strategy/technology role.

Yes, Hackett has inherited a mess but a lot of his planning assumptions did not take into account

the huge impact Field's delaying of product refreshes would have in North America, China and

the rest of the world.

 

That's why he's gone to ground to work on the unexpected $11 billion of reforms needed

to right the ship in the rest of the world - that on its own is one massive hit to all of his plans.

He's a nice man with a good heart but it's clear that he's way out of his depth heading up Ford.

 

Let's look at Hackett's plan which is basically, "I want you guys to take $25 billion out vehicle development

plans and supplier contracts over the next five years.". Tariffs have now smashed the crap out of that by

pumping up the cost of steel and aluminum. The savings on engineering and development costs are savings

on things Ford wasn't going to do anyway, it was always going to merge all the major platform developments.

Edited August 26, 2018 by jpd80

[theoldwizard]

Let's look at Hackett's plan which is basically, "I want you guys to take $25 billion out vehicle development

plans and supplier contracts over the next five years.".

Some of that savings has come from the latest round of salaried early retirements. Finding any one in engineering who has more than 20 years experience is now hard to do !

[jpd80]

Some of that savings has come from the latest round of salaried early retirements. Finding any one in engineering who has more than 20 years experience is now hard to do !

Remember what happened the last time we saw this sort of knowledge drain,

huge gaps in production schedules as engineering struggled to deliver vehicles on time

now consider that on top of a management that thinks flexible architecture solves everything

and saves a lot of money by not doing things twice....what could possibly go wrong ...

[theoldwizard]

There is a major reshuffle of Engineering that was announced last week.

 

From: Jim Hackett
Sent: Monday, August 27, 2018 1:02 PM
To: The Ford Team
Subject: Company Announcement

Today, we are announcing a key organizational change to help us better position our business for the opportunities ahead as we focus in on our Winning Portfolio smart choice for growth and shift to a team-based approach centered on driving a deeper product-line and customer-first focus across the company.

With this, we are announcing that we are creating a new Enterprise Product Line Management organization, led by Jim Baumbick who will report into Jim Farley, as we continue transforming to better meet emerging customer needs, drive top-line growth and maximize returns.

The new EPLM organization establishes 10 cross-functional teams that will manage distinct product lines as end-to-end businesses and leverage Ford’s human-centered design, advanced product marketing and user experience teams to create breakthrough products and customer experiences.

The collective response from fellow retireess is something like, "Didn't we try that in the 90s with disastrous results ?"

No corporate memory !

[fuzzymoomoo]

Theres too many damn Jims in this company ?

[Bob Rosadini]

There is a major reshuffle of Engineering that was announced last week.

 

From: Jim Hackett

Sent: Monday, August 27, 2018 1:02 PM

To: The Ford Team

Subject: Company Announcement

Today, we are announcing a key organizational change to help us better position our business for the opportunities ahead as we focus in on our Winning Portfolio smart choice for growth and shift to a team-based approach centered on driving a deeper product-line and customer-first focus across the company.

With this, we are announcing that we are creating a new Enterprise Product Line Management organization, led by Jim Baumbick who will report into Jim Farley, as we continue transforming to better meet emerging customer needs, drive top-line growth and maximize returns.

The new EPLM organization establishes 10 cross-functional teams that will manage distinct product lines as end-to-end businesses and leverage Ford’s human-centered design, advanced product marketing and user experience teams to create breakthrough products and customer experiences.

 

The collective response from fellow retireess is something like, "Didn't we try that in the 90s with disastrous results ?"

 

No corporate memory !

My first thought is that this is a spoof? An exercise in how many worn our buzz phrases you can use. 10 "cross functional teams"?? Takes me back to Jac the Knife's statement on why he was buying "salvage yards"... "so we can better understand part failures" ..or words to that effect.

[mettech]

Ford is now rated, "ONE STEP above junk stock".

 

I thought Ford was ahead of everyone in the Reorganization.

[fuzzymoomoo]

My first thought is that this is a spoof? An exercise in how many worn our buzz phrases you can use. 10 "cross functional teams"?? Takes me back to Jac the Knife's statement on why he was buying "salvage yards"... "so we can better understand part failures" ..or words to that effect.

That is Hacketts MO. He speaks only in hyperbole, buzzwords and non answers.

[akirby]

Analysts are stupid.

[rperez817]

Analysts are stupid.

 

No sir. Analysts assess an industry or company based on data and experience. Nothing stupid about that.

 

What's stupid and sad is that Ford top management let the company sink so deep after Mulally left. To the point it was "going out of business" again like Mulally said when he came to Ford. Now Hackett has to fix things. And communicate his plans. I think Hackett is doing the right thing. He just needs to provide more specifics about the "fitness" initiatives.

[jcartwright99]

 

 

....... I think Hackett is doing the right thing. He just needs to provide more specifics about the "fitness" initiatives.

 

Why? Isn't this what get Ford in hot water all the time with bad PR? Bring out the dog and pony show for investors and analysts about what's to come has given us some epic fails over the past few years. In my opinion, I say let the results speak for themselves. Don't start talking about future products and cloud based service slide shows that are way too far off. It's a balancing act being a public company but at this point, without a total PR purge it would probably create more harm than good.

[92merc]

Analysts are also the same ones that think there is nothing majorly wrong over at Tesla.

 

<sarcasm>There is probably a reason why the word analyst has the word anal in it. Insert any range of NSFW jokes here, no pun intended. </sarcasm>

[rmc523]

 

Why? Isn't this what get Ford in hot water all the time with bad PR? Bring out the dog and pony show for investors and analysts about what's to come has given us some epic fails over the past few years. In my opinion, I say let the results speak for themselves. Don't start talking about future products and cloud based service slide shows that are way too far off. It's a balancing act being a public company but at this point, without a total PR purge it would probably create more harm than good.

 

The problem has been it's been all show, no "go" - they've "shown" what they want to do, but no actual product has shown up yet. By this time next year (or for that matter after the auto shows) with Escape, Explorer, Corsair, Aviator, and Ranger coming online, things will look much better already.

 

The same people/reporters sharpening their pitchforks right now will commend Hackett for getting so many products out so quickly in response to negative reports, just watch!

 

 

No sir. Analysts assess an industry or company based on data and experience. Nothing stupid about that.

 

What's stupid and sad is that Ford top management let the company sink so deep after Mulally left. To the point it was "going out of business" again like Mulally said when he came to Ford. Now Hackett has to fix things. And communicate his plans. I think Hackett is doing the right thing. He just needs to provide more specifics about the "fitness" initiatives.

 

They're nowhere near the shape they were in when Mulally came in, to say the company was on the brink of going out of business now is a flat out lie.

[akirby]

Analysts are also the same ones that think there is nothing majorly wrong over at Tesla.

 

<sarcasm>There is probably a reason why the word analyst has the word anal in it. Insert any range of NSFW jokes here, no pun intended. </sarcasm>

THIS!!!!!

 

Analysts may have more data than we do but that doesn’t mean they interpret it correctly.

[jpd80]

I think analysts are wrongly associating Ford moving away from cars with increasing drops in profit.

Two things happening at the same time does not mean one is caused by the other..