Can Ford be salvaged?
Today, reports surfaced that Ford Motor Company is considering taking itself private to continue its restructuring without the scrutiny of the public markets. There are also reports that Ford is trying to convince Renault-Nissan to abandon its conderation of an alliance with GM in and ally itself with Ford instead.
IMHO, Ford would make a better partner with Renalt-Nissan than GM but I just can’t see how anything French can be of benefit. Remember: These are the people that created the Twingo.
I believe its better to clean up your own house first before you bring in a partner and cause even more upheaval. Going private doesn’t help either. An employer with that many jobs at stake, even private, couldn’t avoid the limelight associated with the reorganization that’s needed.
Ford has three major problems:
Too much dead weight in the creative department:Â Laziness. Fire them all! Volvo S80=Lincon Zephyr=Mercury Milan=Ford Five Hundred. Innovative styling and unique products are what pull people into the showrooms. Pontiac Solstice ring a bell?
Too much dead weight in product lines:Â The company has 8 product lines and does only two of them well. To compete more effectively, Ford needs to sell or close three product lines. I’d start with Land Rover and its bottom rung intial quality rankings. Mazda and Mercury would be my next two.
Too much dead weight in Union payroll: It’s time for a major overhaul of the automotive compensation system. Paying union members $30/hr plus benefits just isn’t going to work in the new economy. The Big 3 US automakers need to address this issue together if they are to have a chance at long term success. It may also be the only way to break the union stranglehold.
And finally, have a little faith in your product. Toyota/Honda are known to easily pass 100k miles without any major expense and can afford to have short warranty periods. US automakers don’t have that luxury. Take a page out of the Hyundai playbook and kick up your warranties to AT LEAST 5 years, 50000 miles - bumper to bumper.