We're getting mixed signals from Ford. One week ago the automaker announced it was distributing bonuses to every single one of its salaried and hourly workers, just to say thanks for helping the company reduce costs, improve quality and reduce the ranks. Today we learn that Ford President of the Americas Mark Fields has told his workforce in a weekly webcast that the company earned poor marks on its own internal report card. The poor marks resulted from missing sales targets and not cutting material costs enough in February. We were under the impression that successful cost cutting was one of the reasons for paying out at least $36 million dollars in bonuses to its workers.
We made the argument last week, and again in this week's podcasts, that we bet many Ford workers would much rather have their bonus money go back into the company to ensure all the right moves are made during these uncertain times and their jobs remain secure. This seems even more evident today in light of Ford's failing to meet its own targets for February. Those many millions could pay for the next niche vehicle that sparks a renaissance, or any number of things that could help save the company. Heck, it could pay for a Taurus SHO!
[Source: Detroit Free Press]
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Reader Comments (Page 1 of 2)
Joe @ Mar 15th 2007 3:19PM
Ford should just plain die. Im not being mean, just being realistic.
They have 28 billion:
-Give 1 milion to each dealer to close. Thats 4 billion
-Give 100,000 to each worker to go home. Thats 11 Billion
-At todays share price the company is worth 9 billion to all the shareholders in the world.
Thats 21 billion so far.
The other 7 billion to help the suppliers close plants.
1 Billion to the Ford family and thank them for a century of auto manuafacturing.
And then you are done.
Scenario two:
Belive you can fix this and burn all 28 billion in the next 2 years thinking you can right this ship. You fail. Then you have nothing. Everyone will go home empty handed.
If the right people were at Ford I would say invest. But because wrong people are at Ford, I say jump when you have the cash.
C. McFeeny @ Mar 15th 2007 3:38PM
You obviously don't live in Detroit, Joe.
Elliott @ Mar 15th 2007 3:52PM
The bonuses were paid for meeting several goals set for CY 2006. This internal "report card" is for one month. It's quite possible that Ford will meet all of it's goals for '07, and pay bonuses again.
Larger if more goals are met/exceeded and smaller if less goals are met. The monthly report card helps point out areas were the company will need to pick up the slack for the remainder of the year, but the bonuses are/were determined by using full year metrics.
Now here's my question: if Ford does not meet it's internal targets for several months, will they lower their targets to an attainable level for the remainder of the year? I would hope not; otherwise it would seem that the 'bonuses' really aren't related to any merit.
waitingforvizzini @ Mar 15th 2007 4:25PM
John Neff you are truly a WANKER!!! Neff I know you've been shopping the idea that workers don't wan't/need that 300-800 dollars and would rather not be paid it. Put your theory to the test and visit a Ford plant. Ask an auto worker. Bring a video camera so I can watch every auto worker you talk to punch you out. You elitist snob.
purecoda @ Mar 15th 2007 4:27PM
Gotta love how they make the .5pts loss arrow dis-proportionally smaller.
Debra @ Mar 15th 2007 4:29PM
#2 I dont think you fully understood what Joe said.
If Ford can solve their problems then power to them. But Joe and I as well dont think Ford can do it.
So why burn the cash? If Ford goes bellyup peopole will be left pennyless. Atleast now everyone can get a good settlement.
I personally think Ford needs a new Ranger. Its a small pickup. Not much investment needed. Engines and Transmissions are plenty at Ford. Just put together a modern platform. Pickups are cheap to produce. Put in the 200hp 3.0, a 250hp 3.5 and the 217hp 4.0 in it. The will do well and make lots of money at this.
Instead they called the minivan segment a dying breed and left.
They call the compact pickup a niche market and are not competing in it. This is not right.
doglet @ Mar 15th 2007 4:31PM
fords turnaround is underwhelming. considering the company has its back against the wall, it still seems like business as usual. the newer better models are not arriving fast enough. but i suppose its never fast enough. bob lutz has been at GM since 2000 (?) and only now is the company starting to see the fruits of its labor. it takes 6-10 years for a car company to completly replace (not just refresh) its lineup. i just dont know if ford has that kind of time.
ChevyFan @ Mar 15th 2007 4:41PM
I dont know what I would miss if Ford died.
I do know. Nothing. Nothing special about anything they make.
naggs @ Mar 15th 2007 5:08PM
"John Neff you are truly a WANKER!!! Neff I know you've been shopping the idea that workers don't wan't/need that 300-800 dollars and would rather not be paid it. Put your theory to the test and visit a Ford plant. Ask an auto worker. Bring a video camera so I can watch every auto worker you talk to punch you out. You elitist snob."
seriously jeff, how dare you imply that UAW factory workers would have to foresite to want ford to invest the $40 million in new product so that they have a job in the future. of course they are going to take the couple hundred bucks! you elitist snob
/sarcasm
wally @ Mar 15th 2007 5:33PM
Why can't anybody build a hydraulic hybird?
SPEND SOME MONEY ON THIS TECHNO!!!!!!
naggs @ Mar 15th 2007 5:57PM
hydraulic hybrid is only sutable for large commercial trucks (buses, garbage trucks ect) it is inheriently heavy, requiring large pressure tanks filled with hydraulic fluid. it will do more harm than good on any passenger vehicle, no amount of investment in the tech will change that.
Daniel @ Mar 15th 2007 6:26PM
The Ford Board of Directors should just plain fire the clowns responsible for this mess. FoMoCo is the least innovative company in the market, they have made so many bad decisions and they have failed to lead the market or even keep up with the market. They have let their great products (Linclon LS, Taurus, T-Bird/Cougar, Focus) wither on the vine and die a slow death. And then they produce astonishingly uninspired stuff like the Contour and Ford Five Hundred? Outrageous! The world wants cars that get 60 MPG and Ford has the capability to produce them - but they just will not do it - astonishing! They offer grdeat stuff in Europe and doo doo in the States? What is that about?
It seems that the attitude from the Board is "We don't care what customers want - this is what we sell. Take it or leave it."
Yea, the Ford Board should just fire those responsible. Oh, the Boardmembers are the ones responsible. Well, they should just fire themselves.
waitingforvizzini @ Mar 15th 2007 6:27PM
naggs wouldn't it be more appropriate to ask allan mullaly to sacrifice first? How dare you begrudge a working man his wages.
Gerry @ Mar 15th 2007 7:44PM
I forgot to mention, maybe Ford ought to buy the rest of Mazda, (remember we are suppose to buy American), give up being Ford, and go 100% Mazda. No wonder some think the Fusion is so great, it's built on a Mazda platform!
naggs @ Mar 15th 2007 8:04PM
"naggs wouldn't it be more appropriate to ask allan mullaly to sacrifice first? How dare you begrudge a working man his wages."
most ford execs took a paycut about a year ago, but that is besids the point. noone is calling the bonus recipients selfish or ignorant or anything bad at all. i dont understand where all this anamosity is coming from.
"Neff I know you've been shopping the idea that workers don't wan't/need that 300-800 dollars and would rather not be paid it."
noone ever said that. only an idiot would claim that ANYONE doesnt want $300. ask anyone on the face of the earth if they want $300. given the choice between getting $300 and not getting $300 is no choice at all. but what if the choice is between some cash now, and a little job security 5 years from now?
some believe that ford's back is against the wall, i personally give a 50% chance that the company survives the end of the decade under ford family ownership. in that context, $40 millon could be better spent on product that would keep employees working.
its not a slight against the working man, its just a little speculation about the future. calling someone an "elitist snob" for understanding basic opportunity cost is pretty ignorant.
i do however disagree with neff that "many Ford workers would much rather have their bonus money go back into the company". its just not realistic to hand somone $300-800 and then assume that they will want to give it back, not matter what the circumstances.
Steve Kilburn @ Mar 15th 2007 9:29PM
mark Fields should be fired. He is weakening Ford day by day.
What never ceases to amaze me is how stupid Ford's leadership has been. When the company is not doing well you indentify those areas which are in a mess and sort them out rather than selling those assets which are healthy and strong.
So completely has Ford gone insane that instead of getting rid of jaguar and land rover and killing useless mercury and lincoln, Ford sold off aston-martin, which is making profit, has a healthy line-up and bright future.
Bryan @ Mar 16th 2007 1:12AM
Wow where to begin on here? So many fools, so little time. Ok, what would you miss if Ford died? They say 2 million people would be affected in some way or form. How about carwise. The best trucks on the planet, the best affordable sports car (mustang) remember Chevy fan, this car killed off your beloved Camaro and Firebird and outsold both 2 to 1. Then we go to the Fusion. Ford, Mazda, and Volvo work on many platforms together. The Fusion is not a Mazda 6. It is a stretched and reconfigured 6 platform that FORD intended to use with Mazda for many vehicles. Some of you complain about Ford doing this, but you are the same ones who praise being a global player. Well, that is what Ford is doing. Now they have a car and a crossover that wipes out the competition. So Ford missed their goal by a little. It is going to happen, it takes a while for people to realize they are making good cars again. Of course the Mustang is the exception and never had that problem. Ford is on the right track. Everyone said GM would die, and look at them now. The next 3 years are going to bring a lot of surprises. By 2010 or 11, Ford should not be having any problems anymore. And Steve, killing off Lincoln would be stupid. Not only would it cost money, it would lessen Fords overall sales and income. The MKZ and MKX are doing very well, and the Navigator too. With a Town car and LS replacement on the way, Lincoln will finally have a full line up of fresh cars to compete. Mercury is actually a very undervalued and overlooked brand. The Milan is a very nice little car that I think few know about. I personally like its interior better than the Fusions. Ford is going to be fine, so all of you haters might as well get used to the fact that they are not going anywhere.
airport krishna @ Mar 16th 2007 5:31AM
As Fields has said repeatedly, Ford's becoming a "smaller company" and that goes for profits and scale of operations. He wants the company leaner and that's admirable, but maybe he underestimates how much the whole thing has to be dumbed down.
He and other senior managers may have more complicated playbooks than the working team is capable of delivering. That doesn't mean Fields and co. are smarter - quite the opposite. 90% of their marketing, advertising, branding and communications spending is wasted because it either
a) irratically and inconsistently delivers messages which confuses consumers; or
b) always puts messages in a sales context such that consumers think Fords are cheap and always discounted, always lowest common denominator, short-term thinking.
Countless millions are wasted in this area where they spend more than a billion per year and which actually works against their goals of having Ford products creating desire. It would seem that the lack of clarity they display with their product and service portfolio has carried into all aspects of their business.
The board needs to get incredibly simple and clear about what their goals are and be realistic about who's available in-house to carry out those goals successfully. Fields may be on the right track but he's presiding over a history of irraticism and ineptness that would rival some US government operations.
Consumer trust is what it's all about and I'm not sure they're building it.
C. McFeeny @ Mar 16th 2007 8:22AM
#6 - No matter what you may think of Ford's business decisions, do know that there is an entire city of people who need this company to be successful. It's very easy to stand outside Detroit, throw your hand sin the air and laugh. It's not so easy when your home, your family and your community are on the line. I know those of us who work at Ford or with Ford are very committed to doing whatever is asked of us to make this company a success again. I want to believe that the decisions they are making now are the right ones that will ensure a sustainable future for this company. I want to stand tall and know that this company is not going to "just plain die." It's not that I want to see this company succeed to come back here, beat my chest and say "I told you so". It's because there's a lot more at stake here than just the health of a corporation. It's the health of an entire region of the same country that you live in as well. Why you would wish failure and death on us -- I don't know?
Gerry @ Mar 16th 2007 4:43PM
I think Ford should invest what's left of their dwindling cash supply in: the factory in Mexico that builds every Fusion, and if it's not the same, the factory that builds models of every F-Series pickup down there, bonuses for all the Kia employees in Korea who built all the Festivas and Aspires Ford sold to unaware "Buy American" customers as American made, the factory in Germany that builds ALL the 6 cyl. engines for the Mustang, the factory in France or the one in Mexico that builds the transmissions for that car as well, and finally send the rest to Mr. Roush to aid him in his war against Toyota at Nascar-he's going to need every penny. Where's Ford at the Grand Daddy of them all, the Indy 500? Stomped and run off by Honda!