Ford Quality Czar Says Issues Should Subside in 2023

[iamweasel]

2 hours ago, rperez817 said:

 

Good point akirby. Acknowledging what others have shared in this thread about organizational change management, supplier relations, quality, etc., it makes Jim Farley's decision to create the separate Model E and Blue divisions even more brilliant.

 

"Splitting" Model-E is nothing more than smoke and mirrors.  Every vehicle line is a separate business unit and has their own P&L - they just never reported it that way.  (It was reported in groups like "car" and "truck.")  So you can pick and choose what vehicles are in each grouping fairly easily.   

 

So this whole "separate" battery electric division is nothing more than "selling it" to Wall Street.  It's just a game played to satisfy investors who don't understand the business.   That doesn't mean I think this is bad in any way - it's pretty meaningless in the grand scheme of things and doesn't really help or hurt the real product.

[akirby]

1 hour ago, iamweasel said:

 

"Splitting" Model-E is nothing more than smoke and mirrors.  Every vehicle line is a separate business unit and has their own P&L - they just never reported it that way.  (It was reported in groups like "car" and "truck.")  So you can pick and choose what vehicles are in each grouping fairly easily.   

 

So this whole "separate" battery electric division is nothing more than "selling it" to Wall Street.  It's just a game played to satisfy investors who don't understand the business.   That doesn't mean I think this is bad in any way - it's pretty meaningless in the grand scheme of things and doesn't really help or hurt the real product.

Not necessarily.  Going forward the investments will be totally different and having separate business units makes it harder to divert cash and other resources from Model E to Blue.  It also enables Model E to create entirely new processes without the legacy baggage.  I’ve seen companies do something very similar with cloud computing with varying levels of success.  But the theory is sound if you understand corporate organizations, finance and processes.

[7Mary3]

2 hours ago, iamweasel said:

 

"Splitting" Model-E is nothing more than smoke and mirrors.  Every vehicle line is a separate business unit and has their own P&L - they just never reported it that way.  (It was reported in groups like "car" and "truck.")  So you can pick and choose what vehicles are in each grouping fairly easily.   

 

So this whole "separate" battery electric division is nothing more than "selling it" to Wall Street.  It's just a game played to satisfy investors who don't understand the business.   That doesn't mean I think this is bad in any way - it's pretty meaningless in the grand scheme of things and doesn't really help or hurt the real product.

 

But how will this affect dealers?  I have been told franchises will either be 'Ford e' or 'Ford Blue', can't be both.  Inside Ford I see all the 'good' people wanting to be on the 'e' side, and heaven help those who end up in 'Blue'.  A lot like commercial truck back in the day.  I guess the thing to look out for would be a separate IPO for 'Ford e'.     

Edited July 13, 2022 by 7Mary3

[fuzzymoomoo]

35 minutes ago, 7Mary3 said:

I guess the thing to look out for would be a separate IPO for 'Ford e'.     

The day it was announced we had a pow-wow with management so they can assure us nothing would change on our end. The fact that they said it wouldn't be like the Visteon split without even being prompted to tells me that it's at least in the cards. 

[akirby]

36 minutes ago, 7Mary3 said:

 

But how will this affect dealers?  I have been told franchises will either be 'Ford e' or 'Ford Blue', can't be both.  

They can be both.

[7Mary3]

20 minutes ago, fuzzymoomoo said:

The day it was announced we had a pow-wow with management so they can assure us nothing would change on our end. The fact that they said it wouldn't be like the Visteon split without even being prompted to tells me that it's at least in the cards. 

 

Astute observation!

[iamweasel]

1 hour ago, akirby said:

Not necessarily.  Going forward the investments will be totally different and having separate business units makes it harder to divert cash and other resources from Model E to Blue.  It also enables Model E to create entirely new processes without the legacy baggage.  I’ve seen companies do something very similar with cloud computing with varying levels of success.  But the theory is sound if you understand corporate organizations, finance and processes.

 

Investment is done vehicle line by vehicle line.  Each vehicle line stands on its own.  It doesn't matter whether that vehicle is part of Car, Truck or Model E, in reality.   

 

The one reason this may help Model E vehicles, initially, is there are only a couple of them so the financials can be scrutinized a little bit more.  Ford will less willing to dump certain fixed cost allocations there to pump-up those #s.  As time goes on, though, and more vehicles get added to the mix, all of them will blend together and mask the "good" vs the "bad" and more corporate allocations can be tossed in there.  A lot of games can be played here, and still comply with GAAP rules.

[iamweasel]

51 minutes ago, 7Mary3 said:

 

But how will this affect dealers?  I have been told franchises will either be 'Ford e' or 'Ford Blue', can't be both.  Inside Ford I see all the 'good' people wanting to be on the 'e' side, and heaven help those who end up in 'Blue'.  A lot like commercial truck back in the day.  I guess the thing to look out for would be a separate IPO for 'Ford e'.     

 

I don't know about this yet.  My counterpart that handles our Ford Dealerships has said they haven't really communicated anything about this yet.  

 

Upper management is a hard NO on a separate IPO for Ford E.  If they do that, then they can't massage the #'s like they want.  Separating them would mean the divisions would REALLY have to stand on their own, not like how it is now where this "separation" is just all talk, in reality.  If they ever do an IPO for Ford-E, I suspect it will be years down the line when the ICE business is towards the end, and if they were smart they'd do that then use a bankruptcy proceeding to unwind "Blue" and escape from all the remaining liabilities.  Yes this would be a crappy thing to do to the creditors, but US law allows it so they could do that if they wanted to.  They won't, though, because the Ford family is dead set against the "B" word being associated with their family.  

[akirby]

9 hours ago, iamweasel said:

 

Investment is done vehicle line by vehicle line.  Each vehicle line stands on its own.  It doesn't matter whether that vehicle is part of Car, Truck or Model E, in reality.   

There are vehicle specific investments and there are non vehicle specific investments like battery R&D, BEV factory construction and retrofits like Blue Oval City and Oakville plus things like new ordering and tracking systems, etc.  Separate BUs allows those investments to be tracked separately.  
 

Blue will get minimal investment and focus on profit margin.  As vehicle sales or profits deteriorate they’ll be dropped.  Model E will get most of the new investment but will be measured on growth more than profit margin.

 

But the biggest difference is having dedicated employees and management.  VPs and SVPs won’t be prioritizing a BEV over ICE or vice versa or moving resources around between the two.  They’ll be dedicated to one or the other and judged accordingly (in theory at least).  This also allows Model E to enact all new processes without interfering or being burdened by legacy tools and processes.

[rperez817]

35 minutes ago, akirby said:

But the biggest difference is having dedicated employees and management.  VPs and SVPs won’t be prioritizing a BEV over ICE or vice versa or moving resources around between the two.  They’ll be dedicated to one or the other and judged accordingly (in theory at least).  This also allows Model E to enact all new processes without interfering or being burdened by legacy tools and processes.

 

Most definitely. This is the most important thing that comes from the separation into Model E and Blue divisions, and is an ideal response on Jim Farley's part to Jim Hackett's wish from 2019: "I don’t think this company can keep straddling the old and new worlds forever... This company has to change"

[akirby]

BTW I’ve lived through this with cloud computing.  Trying to Implement new tools and processes in a legacy org is like swimming upstream on class 3 rapids. 

[Chrisgb]

On 7/12/2022 at 9:07 AM, fuzzymoomoo said:

Don't forget it cost Joe Hinrichs his job as well. 

I thought he left to pursue other interests

[akirby]

30 minutes ago, Chrisgb said:

I thought he left to pursue other interests

How to say you got fired without saying you got fired.

[Chrisgb]

19 minutes ago, akirby said:

How to say you got fired without saying you got fired.

Yep. I left two different dealerships to pursue other interests. After the second time, I actually did! 

[atomcat68]

On 7/12/2022 at 3:47 PM, coupe3w said:

So the title of this thread said things will change. After reading what iamweasel and fuzzmoomoo said I don't see anything changing. Like I said before its all blah, blah, blah......

This scene always pops into my head when I hear about corporate promises:

 

 

[Joe771476]

It's unqualified, lazy, dumb engineers, assemblers either at Ford or its suppliers!  Go back to the Rouge plant days where raw materials came in the back door and the finished product came out the front, ALL controlled by Ford!  And you don't need to have 20 different kinds/styles of wheels for just one model!  You don't need 10-speed wipers!

[coupe3w]

Ford Quality Czar Says "Issues Should Subside in 2023"

 

If he is worth anything he should have said...Issues WILL Subside in 2023 or I will step down.

[rperez817]

47 minutes ago, Joe771476 said:

Go back to the Rouge plant days where raw materials came in the back door and the finished product came out the front, ALL controlled by Ford! 

 

Jim Farley is aware of the importance of vertical integration and in-house expertise for BEV and has taken actions for Ford's Model e division related to that.

[fuzzymoomoo]

Things are happening, that's all I will say until something official is released. 

[jpd80]

On 7/15/2022 at 2:20 AM, rperez817 said:

 

Jim Farley is aware of the importance of vertical integration and in-house expertise for BEV and has taken actions for Ford's Model e division related to that.

No he hasn’t, Ford is subsuming the problem by locking in sole manufacturer in vertical integration, Ford needs at least two suppliers to keep each other honest on price and to guarantee supply if the unthinkable happens.

We know that Ford doesn’t cover supplier risk management property and just screws down rice with sole supplier agreements and then wonders why things blow up in its face.

Edited July 16, 2022 by jpd80

[2005Explorer]

On 7/11/2022 at 9:24 AM, AM222 said:

What annoys me are issues like the windshields of Broncos and North American Rangers that are improperly attached. That's Tesla-level quality issues.

Yes that is an annoying recall and my Ranger falls under the production dates for it, but for now I am just ignoring it. I have a friend who works for a glass company and he says the OEM windshield is always the hardest to get out. More often then not they break them so if the OEM gets broke what will be available to replace it? I've had to change windshields in the past because I did not get the crack fixed quick enough and it ran and I have had issues. One time I had a replacement that leaked. They tried to fix it, but when it kept leaking they had to pull the whole windshield out which broke it and replaced it again. I had a wind whistle with another that they couldn't seem to fix and since I was at lease turn-in I just let it go.

 

Yeah I am ignoring this recall unless it starts to leak, I get wind noise, or the windshield gets a crack.

[iamweasel]

On 7/13/2022 at 8:34 AM, akirby said:

There are vehicle specific investments and there are non vehicle specific investments like battery R&D, BEV factory construction and retrofits like Blue Oval City and Oakville plus things like new ordering and tracking systems, etc.  Separate BUs allows those investments to be tracked separately.  
 

Blue will get minimal investment and focus on profit margin.  As vehicle sales or profits deteriorate they’ll be dropped.  Model E will get most of the new investment but will be measured on growth more than profit margin.

 

But the biggest difference is having dedicated employees and management.  VPs and SVPs won’t be prioritizing a BEV over ICE or vice versa or moving resources around between the two.  They’ll be dedicated to one or the other and judged accordingly (in theory at least).  This also allows Model E to enact all new processes without interfering or being burdened by legacy tools and processes.

 

Everything you are describing was done when there was Car vs Truck group, or Car vs Truck vs SUV groups, etc.  They didn't need to be separate "divisions" to do that.  That's all I'm trying to say....the whole separate Division thing is simply a talking point for Wall Street - nothing more.    They were going to have some different processes, already, given the inherent differences on how you design/test/manufacture an ICE vehicle vs a BEV.  All that was already in process prior to announcing this separate division thing....

[akirby]

1 hour ago, iamweasel said:

 

Everything you are describing was done when there was Car vs Truck group, or Car vs Truck vs SUV groups, etc.  They didn't need to be separate "divisions" to do that.  That's all I'm trying to say....the whole separate Division thing is simply a talking point for Wall Street - nothing more.    They were going to have some different processes, already, given the inherent differences on how you design/test/manufacture an ICE vehicle vs a BEV.  All that was already in process prior to announcing this separate division thing....

Except cars and trucks and SUVs shared powertrains and factories and I’m sure they shared a lot of employees who were either in a shared group or moved from vehicle to vehicle.  And I highly doubt they each had unique tools and processes and KPIs.

[fuzzymoomoo]

1 hour ago, akirby said:

And I highly doubt they each had unique tools and processes and KPIs.

you would be surprised 

[slemke]

5 hours ago, fuzzymoomoo said:

you would be surprised 

Maybe we shouldn’t.  It does explain some of the high costs and poor return on investment.  Takes money to do unique things.  I’m sure they thought it was a better idea at the time.