The Ford Motor Company has fallen on hard times — and it sounds as if the times may get even harder.
Battered by competition from abroad, there’s talk of massive job cuts, statements some have labeled “defeatest” by its top executive, and a decision under pressure to stop advertising in gay publications has sparked another controversy. None of this suggests smooth-sailing for one of America’s most venerable companies — but it could mean some smiles in Tokyo.
The cuts in Ford’s workforce are likely be greatly felt in the communities in which they happen, and beyond. Reports Forbes:
Five Ford Motor plants in North America–and remember, that region stretches from the Colombia-Panama border to the Arctic Archipelago–could be shuttered as part of a restructuring plan still being developed for announcement next month, according to a U.S. newspaper report published Friday.
Assembly plants in St. Louis, Atlanta and St. Paul, Minn., as well as engine-parts plant in Windsor, Ontario, and a truck-assembly plant in Cuautitlan, Mexico are all under threat, said the report, citing two unidentified people familiar with the automaker’s product plans. Together, these five plants employ about 7,500 workers, or 6% of Ford’s North American work force.
This even caught some Ford bigwigs a bit further down the corporate line offguard:
“Obviously, we’ve indicated we will address our excess capacity,” said a Ford Motor spokesman on Friday. It was the first that the neatly-monikered Danny Sparks, chairman of one of the Ford plants under threat, had heard of it: “It’s a big surprise. We’re one of the most efficient plants Ford has. The Atlanta employees have a long history of stepping up to the task at hand,” he told The Associated Press. Likewise, Mayor T.R. Carr of Hazelwood, Mo.: “Ford has always made a commitment to us they would notify the governor and the city of Hazelwood prior to any formal announcement. We tend not to respond to rumors and speculation,” he was quoted as saying.
When the company announced the third-quarter results in October, Ford Chairman and Chief Executive William C. Ford Jr. said he expected to dot the Is and cross the Ts on the restructuring plan in December and announce it in January.
The January restructuring plan will be the latest in a series of cost-cutting moves at the embattled Dearborn-based automaker, which recently turned in third-quarter losses of $284 million.
Writes James Womack is co-author of “The Machine That Changed the World” (Scribner) and the recently released “Lean Solutions” (Free Press), in the Washington Post:
On Nov. 22 after a speech at the National Press Club, Ford Motor Co. Chairman Bill Ford told the media, with apparent earnestness, that his company “can compete with Toyota, but we can’t compete with Japan.”
This is an old myth. Ford’s competitive problem, according to its chief executive, is driven by the unfair advantages that the Japanese government allegedly bestows on its auto companies — government-funded health care for workers, government support for the pension system and subsidies to develop the batteries needed for hybrid vehicles.
What makes this claim so extraordinary is that Japanese companies, led by Toyota Motor Corp., are thrashing Ford by building vehicles in North American factories with North American-made parts and North American workers, who receive American-style wages and health benefits. And increasingly, these Japanese brand vehicles are engineered in America by Americans.
So the problems are deeper than the fact that the Japanese auto companies are in Japan.
The real problem for Ford, and the one that presents a dilemma for American society, is that an industrial-social system pioneered in Detroit in the 1930s has given way to another industrial-social system pioneered by Toyota in the post-World War II era. The irony is that Toyota based the production side of its system on ideas adapted from Bill Ford’s great-grandfather Henry. While Detroit’s executives have studied the Toyota model, they still have not mastered it or figured out how to pay for the generous (and largely unfunded) pension and health care promises inherited from their predecessors.
He explains the root of the problem in the United States in some detail, the investments by Japanese companies in production in the United States and:
If any government helped the Japanese at that time, it was the American government. When the Reagan administration came up with the Voluntary Restraint Agreement in 1981, it limited the number of imported Japanese cars sold in the United States for a period of years. Because consumer demand for Japanese cars then was greater than the supply, profit margins on the cars Japanese firms were allowed to sell soared. The Japanese companies then used those enormous profits to invest in North American factories and develop pricier up-market brands such as Lexus.
There’s more, but the bottom line is: the U.S. model boomeranged due to the dynamics at the time.
So Ford, in any case, has its work cut out for it. But now there’s a controversy over it pulling ads from gay publications due to pressure for social conservatives…a controversy that could in the end mean reduced income. For details read Americablog’s post here which runs the names and contact info for some top Ford p.r. officials. Here’s a very small taste (read it in full):
Let’s fill their voice mail boxes over the weekend. Ask them if they’d pull all their advertising in black media or Jewish media if the Klan gave them a call….
Well, we just got our new campaign. Ford needs to be taught a lesson. If they think they’re above the fray and too big to be influenced by the mean homosexuals, they ought to give Bill Gates a call and see what happened to Microsoft when they endorsed outright bigotry in order to appease America’s Taliban.
In a nutshell, the rabid homophobes at the American Family Association threatened Ford with a boycott earlier this year because they were advertising in the gay press. Suddenly in June the AFA called off their threatened boycott because local Ford dealers had contacted the national Ford office and, apparently, suggested Ford might be amenable to working out a deal. Now we find out that Ford is pulling its gay ads and that Ford even tells the Advocate that the AFA’s press release claiming credit for this entire thing is accurate.
Ford wants to dance with bigots, that’s fine. But you don’t get to do that in the year 2005 and remain a prosperous company in America.
In addition, Americablog runs unflattering posts here, and here.
Pulling the ads might have seemed good at the time to please the American Family Association but does Ford now have a better idea?