Bill Ford is a study of contrasts in a
Q&A
with Maria Bartiromo appearing in the latest issue of BusinessWeek. He
portrays himself as both a longtime environmental crusader who saw
long ago the dangers of his family business' reliance on gas-guzzling
SUVs and as a student of Zen who has now "awakened to a new future"
jam-packed with smaller cars. Not discussed is the question of what
might have been for Ford Motor Co. if this legitimately green-leaning
executive had the courage to act on his convictions when he had the
chance.
Ford, echoing comments by other auto execs, said in the interview
that the world changed during the second quarter as gasoline crossed
$3.50 per gallon. Overnight, both domestic and foreign auto execs alike
say U.S. consumers shifted away from lucrative SUVs and began
demanding fuel-efficient, quality small cars generally absent from the
domestics' product lineup.
That shift has had a profound impact on the fortunes of U.S.
companies, causing Ford Motor, which had been profitable in the first quarter, to post
an $8.7 billion loss in the second three months of the year and back away
from a goal to be in the black in 2009. The company is currently going
through a painful overhaul of truck and SUV facilities in order to
eventually give the masses the cars and crossovers they now crave.
Ford, who was CEO of the company from 2001 until 2006 and remains
chairman, brought solid environmental credentials to the job and is
entitled to boast in the interview, as he did, about small steps (like
building a new, green plant at the company's historic River Rouge
complex) and large steps like making Ford Motor a leader among U.S.
automakers in hybrid technologies. But he and Bartiromo omit some of
his green failures, like his 2000 pledge, later retracted, to boost the
fuel efficiency of the company's trucks and SUVs by 25% by mid-decade,
and his decision to ax Ford Motor's electric car development.
Conventional wisdom in the industry has it that whatever grand
intentions Ford had when taking over as CEO, he was unwilling to steer
the company away from its then-moneymaking SUV and truck sales at a
time when it needed whatever profits it could generate. The CEO tells
Bartiromo as much, saying that although "I knew this day would come"
when the automaker would need smaller vehicles, "the market was pulling
us in a different direction" at the time.
But whatever his intentions, there is scant evidence that Ford even
drew up plans to boost small-car production during his tenure in the
corner office. Indeed, Ford Motor's lack of small vehicles in showrooms
seven years after he took over as CEO suggests little was done.
Perhaps it is unfair hindsight to fault the exec for passing up a
steady profit stream and forcing the company to break its addiction to
SUV sales at a time when an overwhelming majority didn't see such a
sudden sales drop coming. But it does seem fair, and appropriate, to
ask the chairman how different Ford's prospects might be today had he
used some of those SUV profits to fund the development and production
of the small vehicles the automaker now needs to survive. Or if he had
at least earlier embraced what he now calls "a marketing challenge to
get customers to understand that Ford is a fuel-efficiency leader."
Seems like just the sort of thing a so-called Bolshevik in the
boardroom should have had Ford Motor doing well before gas hit $4 per
gallon earlier this year. But better late than never. - Lou Whiteman
See BusinessWeek article
See TheDeal.com story on Ford's second quarter loss
See TheDeal.com story on Ford abandoning goal of profitability in 2009
See Dealwatch: Autos
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
