Interesting documentary on CNBC last night, tracking the return of Ford to the #1 position in American automobile manufacturers. And a special focus was Alan Mullaly, who is not only the face of Ford but the “driver” behind the comeback and revitalization.
We were however particularly irritated by the segment covering Bill Ford. CNBC seems to have missed the fact that Bill Ford was the one who caused the crisis in the first place. He thought he could run a company, he put himself in sole charge, he established the structure of the company, he drove the product plan, the buck stopped on his desk, and therefore he blew it. And he never admitted any role in the fall at all.
An important segment interviewed staffers from Consumer Reports, whose carefully tested statistics showed a serious quality drop at Ford earlier in the decade, then a major quality gain in the last two years. That matches our own experience with Ford products from that timeframe, particularly our 2003 Cobra with it’s POS engine that died due to a build error on the production line as well as inherent design flaws and lack of development testing.
And then we were introduced to Henry Ford III. What are his qualifications, why is he even there and why is he ahead of anybody else? Sounds like a Ford Family ”legacy” is something like the infamous Kennedy legacy: you can’t seem to ever be rid of them; we (Ford and our country) can’t seem to get to a place where professional qualifications and abilities lead to promotions rather than Family “birthrights” and image “rehabilitation”.
The next segment covered India, and the tremendous opportunities there for growth. We were introduced to the new Ford Figo… which looks to us suspiciously like a past-generation Fiesta. Nonetheless, it literally means freedom and opportunity for middle class Indians. No mention was made of the issues of dramatically increasing carbon dioxide emissions resulting from this growth. And while India is a huge growth market, it’s certainly not the only one. We think that Europe should have received due coverage for their terrific product accomplishments.
The segment on Sync was worrying… while Ford leads the way in Human Machine Interface (HMI) and is far ahead of the rest of the industry, the U.S. Government in the person of political appointee Ray LaHood is on a path to prohibit any and all cell phone access from the inside the car – even with hands-free. Whether LaHood can pull that off before his administration is run out of office remains to be seen.
The next segment covered the sad history of the Explorer, without specifically mentioning the issue of properly monitoring tire pressure and the resultant crashes. The issue was only covered as background for the development of new Explorer and it’s “curve control” technology. Nice technology - but it’s ultimately only a band-aid to the real problem. Hopefully the tire pressure monitoring systems required in all new cars will ensure that owners keep the tires inflated properly.
While several important aspects of the company’s failings and successes where glossed over or ignored, the facts remain that Ford is by far the most successful and forward-thinking of the Big Three. And admired: customers consistently recognize Ford for it’s successes and especially for not accepting bail-outs. But whether growth can continue in the longer term after Alan Mullaly retires and a new generation of leadership takes over, remains to be seen. The documentary also pointed out that this has been a cyclical problem starting with Henry Ford and repeating right up to the present.
Reference: Alan Mulally Bio
Title: President and CEO, Ford Motor Company
- Joined Ford: September 2006
Alan Mulally is president and chief executive officer of Ford Motor Company. He also is a member of the company’s Board of Directors.
Prior to joining Ford in September 2006, Mulally served as executive vice president of The Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes. In that role, he was responsible for all of the company’s commercial airplane programs and related services. Mulally also was a member of the Boeing Executive Council and served as Boeing’s senior executive in the Pacific Northwest.
Mulally was named Boeing’s president of Commercial Airplanes in September 1998. The responsibility of chief executive officer for the business unit was added in March 2001.
Previously, Mulally served as president of Boeing Information, Space & Defense Systems and senior vice president of The Boeing Company. Appointed to that role in February 1997, he was responsible for Boeing’s defense, space and government business.
Beginning in 1994, Mulally was senior vice president of Airplane Development for Boeing Commercial Airplanes Group, responsible for all airplane development activities, flight test operations, certification and government technical liaison. Earlier, Mulally served as Boeing’s vice president of Engineering, and as vice president and general manager of the 777 program.
Mulally joined Boeing in 1969 and progressed through a number of significant engineering and program-management assignments, including contributions on the 727, 737, 747, 757 and 767 airplanes.
Throughout his career, Mulally has been recognized for his contributions and industry leadership, including being named “Industry Leader of the Year” by Automotive News magazine, one of “The World’s Most Influential People” by TIME magazine, one of “The 30 Most Respected CEOs” by Barrons magazine, “Person of the Year” by Aviation Week magazine and one of “The Best Leaders” by BusinessWeek magazine.
Mulally serves on the President’s Export Council which was formed in 2010 to advise U.S. President Barack Obama on export enhancement and ways to encourage companies to increase exports and enter new markets. He previously served as co-chair of the Washington Competitiveness Council, and sat on the advisory boards of NASA, the University of Washington, the University of Kansas, Massachusetts Institute of Technology and the U.S. Air Force Scientific Advisory Board. He is a member of the United States National Academy of Engineering and a fellow of England’s Royal Academy of Engineering.
He also served as a past president of the American Institute of Aeronautics and Astronautics (AIAA) and is a former president of its Foundation. Additionally, Mulally served as a past chairman of the Board of Governors of the Aerospace Industries Association.
Mulally holds bachelor’s and master’s of science degrees in aeronautical and astronautical engineering from the University of Kansas, and earned a master’s in management from the Massachusetts Institute of Technology as a 1982 Alfred P. Sloan fellow.
A native of Kansas, Mulally is a private pilot and enjoys tennis, golf and reading.
Interesting and thought-provoking article in Automotive News this past week: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100413/OEM02/304139975/1179
However, they failed to take the time to ask a couple of simple questions about the short and abortive CEO term of Bill Ford himself. Billy himself does his best to make us not think of these things in his replies in the interview… but they do need to be asked.
- What happened to the product plan while he was CEO? While he was busy chopping away at everything and anything “Jacques Nasser” (including plans to bring European Fords to North America, and commonize platforms worldwide), plans fell behind, market share tumbled, and the focus (pun intended) of the company became very vague. Mercury all but disintegrated, and several other strategic projects such as Nasser’s plan for a small rear wheel drive chassis for Lincoln were killed off. Fortunately, Mr Nasser left Ford with fairly good Volvo and Mazda platforms that have provided a stop-gap (a very heavy and large stop-gap in the case of the Volvo chassis). Excluding ye olde Town Car (which Nasser planned to replace, and for which he sponsored smashingly brilliant concepts) and the Navigator (aka Expedition), the entire Lincoln line is either a Mazda or a Volvo. Compare that with the phenomenal progress that Cadillac has made.
- Was the current financial crisis of Ford always a given, or with valid product would it have been mitigated or even non-existent? Granted there was a worldwide economic crisis not of Ford’s making, but how much would a viable and popular product line have mitigated that? If Ford North America had Ford of Europe’s last-gen products in it’s mix (as it is straining to do now with the next-gen European products), would Ford already have rolled over GM and Chrysler (and Toyota) and left them well behind? Remember that the European products are not just well received now, they have been for years and have undergone continuous improvement (an alien concept for North America). Ford has been gaining market share in Europe because of how well those products have been engineered.
- We question the claim of the the strength of the Ford family support. It’s been reported for years that the rest of the Ford family was extremely unhappy with little Billy’s management of their company, and it has been reported by some news outlets that the collective family fortune had shrunk to less than a quarter of it’s previous value. Some of us (this writer included) may have bought our Ford stock when it hit rock bottom and then recently sold it at a huge profit (this writer included), but the family had to sit by and watch their value disappear. And they maintained their faith in Billy’s management? Yea, sure.
So, in our humble opinion, Automotive News let little Billy Ford off easy. The article “smells” like Ford’s PR department had a hand in it. Someday, if the right journalist comes along, and does thorough research and investigation, in our humble opinion we believe that we’ll see Billy Ford taking the majority of the blame for Ford’s crisis. And for the resulting crisis of tens of thousands of Ford workers whose careers, financial health, and sometimes even physical health, have been irreparably ruined.
We’ll give him some credit for looking for a new CEO, and Mulally was of course a brilliant choice. But the true story of how that one actually came about would also make a very worthy story – as would how Mulally deals with the Ford family. And what his fellow employees who aren’t named Ford think about the possibility of further Fords coming up thru the ranks based solely on their name and not on solid credentials and accomplishments earned the hard way.
Yes, we’re big fans of Ford the company, but even more so we’re fans of professional management and advancement that is earned by accomplishments and not as a “birth right”.
Very impressive final EPA numbers. Both the new V-6 engine and the Coyote 5 liter are (nearly) up-to-date engines (missing direct injection) and are exactly what the Mustang needed. And kudos to their engineering teams, who instead of doing “just enough to get by” showed instead what they and Ford are capable of doing given the proper focus and leadership.
The V-6 engine also shows that Ford finally “gets it” – that the base Mustang need not be so dull and pedestrian. There hasn’t been any focus on making the base-engine car fun to drive and respectable since the original car in the ’60s.
The problem is that these two new engines show by contrast what basic issues remain. History too-often repeats repeats itself at Ford:
- only enough funds were allocated to bring out the new engines 6 model years after the chassis was delivered (2005). This is even worse than 1996, when the mod V-8 engines finally replaced the antiquated pushrod 4.9 liter V-8 of the new 1994 models. And it took until 1999 to get a small improvement in the V-6 engine as well as a serious (and successful) attempt to improve the chassis with the Cobra IRS.
- other vehicle lines continue to pay the basic bills for the development of the engines. The 5 liter is being paid for by the truck line, and the V-6 by several vehicle lines. The Ti-VCT heads are becoming standard across the board on the 3.5 liter engine, the 3.7 liter displacement was first seen in a Mazda, and the complete Ti-VCT 3.7 is slowly being delivered across the lineup, most recently in the Edge.
We frankly don’t see these two engines as being a true indication of a “continuous improvement” philosophy at Ford. The S197 Mustang was originally engineered for a Duratec V-6, which became an early victim of the cost-cutting and back-pedalling (and lack of leadership in the Little Billy Ford “I think I can run a global corporation” years) that also killed the IRS and the real Cobra (not to be confused with the watered-down Shelby) as well as an update to and further usage of the DEW98 platform. And remember that the Coyote is nothing more than an architectural bump over the mod-motors – an engine that was first conceived in the very late eighties. Most other manufacturers would have taken their engines thru at least two improvement cycles since then, if not a complete architectural replacement.
So while the engines are again hand-me-downs from other vehicle lines, at least they are good ones this time. The problem now is the Mustang platform. The current platform is a bastardization of the DEW98, when the original intent was to attempt was to use the full DEW98 architecture (internal studies went back and forth and ended up delaying the final decision several times). What started out as Ford’s own analogy to the world-class Nissan/Infiniti “FM” chassis was instead dumbed-down by the mindset of a prior century. What might have made a great Lincoln (as the Z chassis is shared across most of the Infiniti lineup) is instead an even lower life form than the very dated Falcon chassis. And it’s also an orphan – and orphans have zero place in the “One Ford” program.
What will happen in the next several years (perhaps as late as 2016), is that either this platform will be slightly updated (“Fox” style - a small budget ”good enough”/”band-aid” of the type that once absurdly stretched the life of a former Mustang platform to 17 years), or the type of effort that created these two new engines will applied into engineering a platform that will be used across several vehicles, Falcon and Lincoln included. That platform will need to last a long time for Ford: it will have to go all-out in reducing weight gram-by-gram, it will have to accommodate future powertrain requirements (providing enough room for a hybrid transmission and battery), and – hopefully – it will also offer state-of-the-art architecture (lightweight SLA and IRS). Costs will have to be split across vehicle lines, with economy of volume paying the costs. It can’t be an orphan platform, and it will have to be flexible enough to serve everything from a somewhat smaller Mustang thru a comparatively much larger Lincoln. It will be a basis for continued evolution and improvements, rather than a throw-away. Everything Ford has learned about global engineering and platform sharing can be applied here to make this work.
But will Ford actually step up to the challenge, or will the ”just good enough” plan be used again? Will we see what this company is actually capable of accomplishing, or will we get another series of band-aids and lost potential?
Ford Press Release follows:
NEW MUSTANG V-6 WITH 305 HP CERTIFIED AT 31 MPG HIGHWAY; MAKES HISTORY AS FIRST CAR WITH 300+ HP AND 30+ MPG
- New 2011 Ford Mustang V-6 final fuel economy certified by EPA this week at 31 mpg on the highway and 19 mpg in the city
- On sale this spring, Mustang with new 3.7-liter V-6 achieves 305 hp with available six-speed automatic transmission; first car ever to achieve 300-plus horsepower and 30-plus mpg
- New Mustang already has more than 11,000 orders, half for the new V-6
- New Electric Power Assist Steering (EPAS) system eliminates the drag of an engine-operated hydraulic power steering pump
- Six-speed manual and automatic transmissions allow lower cruising revs without sacrificing off-the-line performance
- Aerodynamic changes include improvements like a new front fascia, tire spats on the rear wheels, modified underbody shields, a taller air dam and an added rear decklid seal
To be fair, or perhaps to recognize the ”Point-Counterpoint” controversial nature of the new SHO, we present a review by Warren Brown of The Washington Post of the new SHO: Warren Brown – The Washington Post
And as always, we’ll review Warren Brown and his review.
Starting with the press photo he selected (he didn’t supply one of himself actually driving the car – if he even did) – to the right. What’s wrong with this picture? Start with the hood scoop, the seemingly carbon-fiber roof, and the slammed suspension. He credits Ford with this picture… what is Ford trying to pull? And why, when Ford Press supplies over 100 photos of the new SHO, did he pick such an unrepresentative photo? And if he did actually drive the car, where is the photo of that?
95% of the article is lots of filler by Warren of the revitalized Ford, and the need to produce a new Taurus. I agree with all of that… and it’s important to say because Ford (as a company, not helped by little Billy Ford) did the right thing and positioned itself far better than did GM and Chrysler.
But Warren missed the whole point of reviewing a car – it’s a review of the car first and the company second. The only indication that he might actually have driven the car is a line in the second paragraph: quote ”as I did the moment I keyed the ignition”. So he started the car and that was it. The next paragraph simply quotes the EPA mileage figures – not any real world experience. Shabby, especially for an organization that has full access to Ford’s press fleet.
What’s missing here is a stark realization that the king has no clothes. The “new” Taurus is actually the old Taurus – and the old Ford 500, with a new drivetrain, a revised rear suspension, and a new and even bigger body. And Ford took the platform from it’s Volvo subsidiary where it dates back a few years more. That may all be ok, and there is plenty of precedent here (after all, the Fusion is actually a Mazda6), but again he missed the point. This is all that Ford could afford for the platform. Minimal money spent on a “top hat” rework of an existing car. That’s why it’s so large and heavy.
Let’s be sure to give credit where credit is due: the engine is a great piece of work. Ford still has a few heroes in it’s powertrain engineering department and Derrick Kuzak is the best example here. Somehow he managed to keep the plans for this engine alive during the dismal years when Billy Ford ran the company, and without a doubt Alan Mulally is a fan of this engine and this technology. Kudos to Derrick (and congrats on a much deserved promotion to Group VP).
Now lets see this engine go into an appropriate chassis. That means a rear wheel drive sedan and sporty coupe. The first is nowhere on the horizon (thanks to Little Billy spitefully cancelling Jacques Nasser’s Lincoln LS), and the second is near (although a certainly wiley Coyote has to play out first) – although it also has a wagon-train era out-dated suspension.
In an article on CNNMoney, it’s revealed that little Billy Ford, the Ford family member who thought he shoudl be a CEO, is responsible for his family loosing half of the value of it’s Ford Motor Corporation stock. The situation is so bad they’re thinking about divesting into other businesses.
The family has lost $581 million dollars in value so far. The value of the stock in 2001 was $1.4 billion dollars. The big drop coincides with the moment in time that little Billy took over the company and in a fit cancelled all of Jacques Nassers product plans… leaving the North American operations with almost no new model pipeline and directly resulting in the loss of tens of thousands of jobs.
A needless, sad, and perhaps fatal state the company is struggling to overcome today. The direct reason for the tens-of-billions of dollars of loans, and the unprecedented step of having to mortgage the factories to back them up.
Given the strong & very competitive marketplace, the loss of the model pipeline is the bottom line:
- The Lincoln folks would have had a next-gen Lincoln LS, a new (and beautiful) Continental flagship (leveraging a stretched next-gen LS chassis), and an entirely new BMW 3 series-sized platform for an entirely new product.
- The Mercury folks were studying importing the Mondeo and we might have had that starting just now.
- And of course the Ford Mustang wouldn’t have ended up as such a turd, Jacques would have made sure we had the IRS as well as the then-planned new “Hurricane” engine.
If I was the Ford Family, I’d be thinking about divesting ourselves of Billy.
More reading: CNNMoney: http://money.cnn.com/magazines/fortune/fortune_archive/2007/04/16/8404294/index.htm
- Full-year net loss of $12.7 billion, or $6.79 per share. Fourth-quarter net loss of $5.8 billion, or $3.05 per share.
- Full-year after-tax loss from continuing operations of $2.8 billion, or $1.50 per share, excluding special items. Fourth-quarter after-tax loss from continuing operations of $2.1 billion, or $1.10 per share, excluding special items.**
- Europe and South America were profitable for the full year, both improving on a year-over-year basis. North America, Premier Automotive Group and Asia Pacific and Africa reported full-year losses.
- Financial Services, including Ford Motor Credit, earned a pre-tax full-year profit of more than $1.9 billion.
- Automotive liquidity of $46 billion at year-end 2006 including credit facilities.
DEARBORN, Mich., Jan. 25, 2007
* Minimal engineering investment, minimal durability testing (SVTs and Ford GTs you can’t drive hard without overheating)
* Maximum marketing the bejesus out of it (and you
One of the the best sites on the web, The Truth About Cars, looks into a crystal ball and sees several press releases from the future. One concerns an experimental spine transplant for Billy Ford.
Source: The Truth About Cars
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… or the “disaster of Billy Ford” – take your choice. There is absolutely no excuse for this continuing disaster. Quarter after quarter of enormous losses, without an end on the horizon.
Some people will blame the economy… some will blame the President. Both rediculous. Instead blame the man at the top – the one who put himself there solely because of “birthright” and not by being the best and most qualified person for the job. Not by being a person who worked his way to the top, he was only born there.
Of course Ford has an entire marketing research department that should have run the trends and predicted the shift away from enormous trucks. Did it indeed predict that? How could it not have? In my own career, I’ve worked in this type of group. All the numbers would have been there to show the trends.
Instead, the company (like GM and DhaimlerChryslter) was addicted to the profits from these trucks and brought more and more of them to market, instead of less and less. And whether the numbers were or were not available to point the way, the executive leadership still has to understand the market it’s working in, and be open to adjusting the strategy and setting the product plan.
And speaking of the product plan, look what a mess that is after the absolute rush by Billy to cancel all-things-Nasser. Which including cancelling a truly new Focus for North America (don’t think for even a second that the rebodied Focus coming next spring is even a tenth the car that the European Focus is), the Lincoln LS and Thunderbird platform, and a new smaller rear wheel drive platform for Lincoln. That platform would have come in especially useful for Lincoln to compete against Lexus (IS350 and GS350) and Infiniti (G35). And then there is the 4000-pound tub of a Mustang, which also would have benefitted from some sophistication (instead we have a gelded stallion, too big, heavy, and poorly suspended to be a true drivers car – one that the company could have used to show off its engineering prowess). Thank goodness there was the excellent Mazda and Volvo chassis to leverage (actually, thanks to Nasser!).
And now we have Alan Mulally, the new president and chief executive officer. Will he be able to operate on his own, or will the “guiding hand” of Billy Ford, as well as the rest of the Ford Family (with their special priveleged stock), be hovering in the background waiting to jump in and take over again? Even if the company becomes heathly again, that dark cloud will always be there.
Following is the press release with the bad news. Draw your own conclusion. Discuss.
- Ford also announces plans to restate certain financial results to correct accounting under SFAS 133. The preliminary third-quarter results announced today do not reflect these corrections.
- Third-quarter net loss of $5.8 billion, or $3.08 per share.
- Loss from continuing operations, excluding special items, of $1.2 billion, or 62 cents per share.**
- Strong liquidity with total cash, including automotive cash, marketable securities, loaned securities and short-term VEBA assets, of $23.6 billion.
DEARBORN, Mich., Oct. 23, 2006
Ford Motor Co. Chairman and CEO Bill Ford received total compensation of
in the disastrous year of 2005. Unbelievable.
Source: detnews.com – Autos Insider