If Ford is to be successful in reversing the downward trends and growing losses in its North American operations, it must get the company’s most critical asset--its people--fully engaged and enthusiastic about the challenge ahead. That’s no small task when management just announced that it is cutting as many as 30,000 workers and closing 14 plants and other facilities.
America’s No. 2 automaker can probably make this restructuring work, but it is going to take tough talk, tough decision-making and maybe even a little tough love. And Ford has some huge hurdles to overcome:
The company has too many factories and plants making too many cars that people don’t want to buy. And, Ford has failed to match the big Asian carmakers that have taken over the U.S. passenger car market. To have any credibility in this restructuring, Ford management must acknowledge its past failure to figure out what its rivals are doing and come up with a battle plan to beat them.
Ford has too many employees and too little ability to bring costs back in line. Not only does the company have too much manufacturing capacity, but the job bank that Ford negotiated with the United Auto Workers gives workers in the program who have their jobs eliminated full pay and benefits--a cost of about $130,000 per worker. Health care costs for current and retired workers also continue to rise, costing the company $1,300 or more for every car Ford makes.
Management must tread carefully with UAW leadership and make the union a partner in the restructuring effort. Yes, union leaders are loath to cut any hard-earned benefits, but even the most hard-line unionist can see what is going on at Ford, GM and the other American carmakers. This is a time for Ford management to be both pragmatic and sensitive to realistic union concerns if they are to have any chance to get them, and their members, help in this effort.
Mark Fields, the head of Ford’s North and South American operations, is leading Ford’s big restructuring effort. According to The Wall Street Journal, he’s been working with employees throughout Ford for months on the "Way Forward" plan, which is described as no less than a massive cultural shift at a company known for its top-down, hierarchical culture.
"The workers are more invested in this than if it were some plan dropped from them from on high," Fields told the Journal. "We are confronting reality here."
The good news, according to Fields, is that workers are ready and willing to help Ford move ahead. "Since I came into this job last year, I have had e-mail in the thousands," he said, "and the ones that stick out are people who have said ‘I can do anything you want, but I need to know what we are doing.’ ’’
That’s really the key. Grand plans and intricate business strategies are great, but sometimes the key to getting something to work is to get the workers engaged by simply saying what you need them to do.
Once upon a time, there was a famous marketing campaign declaring that "Ford has a better idea." It was a catchy slogan and a successful effort because it leveraged the company’s traditional strengths--its heritage, its name, its reputation for innovation.
Now, it’s Ford that needs a better idea. It needs to build better cars that people want to buy, and it needs to build them for a reasonable cost that generates a reasonable profit.
Ford can be prosperous again, especially if it can fully engage and motivate the workforce in the effort. The trick, as former Ford executive Lee Iacocca once observed, "is to make sure you don’t die waiting for prosperity to come."
Workforce Management, January 30, 2006, p. 50 -- Subscribe Now!