Ford Motor Swings To 1st Quarter Profit; Turnaround Plan On Track

[ilmor]

I like to see some good news for a change!

 

http://www.marketwatch.com/news/story/ford...t=TQP_Mod_mktwN

 

:happy feet:

[clark17357]

This was good to see, although the trick is going to be maintaining it as the sales of high profit (trucks, SUVs) vehicles slide (for every manufacturer) due to rising gas prices. Still, it shows that the folks in charge are making the adjustments to compete. Jim

[Guest markham51]

Here is a slightly more expanded story.

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

 

Under Mullaly Ford has done a lot of very smart things. In no particular order...

 

1. Make sure they have a war chest of cash, you can't save yourself into prosperity. You need to be cost conscious but you need to have the cash to spend on developing new models and technology. By selling off the prem brands he got some of the cash needed to spend on the core business. Live to see another day is the first priority to turning a business around. When you are at the edge of the cliff, you need to start by taking a few steps back.

 

2. Cut costs as much as possible when you are losing money. Ford needs to get its legacy costs down as much as possible to compete with Honda and Toyota especially in a down turn. He is focusing on building world cars. It is very important for Ford to leverage it's corporate wide resources. Bill Ford had the right idea but failed to execute. Ford's European lineup of cars is awesome. They need to translate that success into global car platforms.

 

3. Hire the best management team money can buy especially in those areas where you have shown weekness eg. design and marketing. He has attracted some key players in this area from Toyota and Chrysler. Its no secret where Ford was weak. Good leaders have no problem attracting the best talent. This is one of Mullaly's biggest strengths. Ford is iconic, he has a track record.

 

4. Change the culture, hold people accountable. No sense in doing the above if you don't kick ass every week to get results. Mullaly has changed the way management is accountable. Talk all you want about items 1-3, if you don't have accountability the system doesn't work.

 

5. Product mix. Ford is going to need to change it's North American product mix...and soon...to be competitive. If it continues to rely mainly on trucks in North America it is going to be too much of a drag on the rest. Ford needs to excell at CARS...be a leader. With gas prices and CAFE standards tightening the consumer is going to shift back to cars and other fuel efficient vehicles big time. Ford's profitability is currently skewed toward trucks...way more so than any other car maker. They need to change this fast. It is not going to happen unless they get serious about new car models that stir the souls of the North American public. This to me is it's current main weakness. Until it is fixed times will be tough. Big gas guzzling work horses are going to be a tough sell when it costs 100-150 dollars a tank to fill up. Building the world's best trucks is not the best place to be right now.

 

6. Quality. Ford's quality rankings have improved significantly. It has done this with the industries oldest product line. It remains to be seen whether this can be maintained as Ford's average age of products catch up to those of Honda and Toyota. The faster models turn over, the tougher it is to maintain initial quality levels. Consumer confidence in Ford is sorely lacking...it can get better but it needs to be consistent and more than anythig Ford needs to do a better job of marketing here if it is going to turn around consumer perceptions.

 

7. Building brand equity. Ford has done a good job with it's trucks. It needs to do this with it's cars. Renaming the 500 to the Taurus is a lesson the company needed to learn more so than the consumer. many criticized this move...they didn't get the message. things are changing at Ford and change starts right now!

 

Ford has a long way to go to ensure it's financial wellbeing. It is highly leveraged, facing a recession in the market where it loses money, has the oldest product on the market with the worst possible product mix going into a gas crunch. Having said that, I like what I see. In many ways Ford represents the fate of the North American manufacturing industry. Fighting for survival against global forces in trying times. I really, really hope it survives but not so much for me...for the guys and gals who build the products. They deserve to see Ford come out on top.

[mywickedshelby]

finally....a glimmer of good news!