How the Unions Wrecked Ford

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Not really.  Here is how BusinessWeek sums up the dysfunctional management structure
that Ford.
Kiley, David. 2007. "The New Heat On Ford." Business Week (4 June): pp. 33-38.
36: "In the royal hierarchy at Ford, an elaborate system of employment grades
clearly established an employee's rank in the pecking order.  The grades also had
the unintentional effect of quashing ideas and keeping information tightly
controlled.  When (Mark) Fields, now president of Ford Americas, first arrived at
the company from IBM in 1989, he couldn't make a lunch date with an executive who
held a higher grade.  People asked him what his grade was "as a condition of
including me or socializing with me," Fields recalls.  And he was discouraged from
airing problems at meetings unless his boss approved first."
 36: Ford ... is today: a balkanized mess. It has four parallel operating units
worldwide, each with its own costly bureaucracy, factories, and product development
staff.  According to a Mulally (Alan Mulaly, CEO) audit designed to uncover
cost-cutting opportunities, no two vehicles in Ford's lineup share the same mirrors,
headlamps, or even such mundane pieces as the springs and hinges for the hood.  And
that's just taking into account the Ford brand.  Add Volvo, Jaguar, and Land Rover
to the mix, and the company has more than 30 engineering platforms worldwide.  That
leaves Ford at a big cost disadvantage."
 36: "Examples of Ford losing opportunities because of its byzantine corporate
structure abound.  A recent example involves Sync, a system that allows
voice-command control of a cell phone and MP3 player. It was a big success at last
January's North American International Auto Show.  Ford developed it with Microsoft
Corp. last year and will start rolling it out this fall.  Although Volvo and Land
Rover are also dying to offer Sync, neither will get the system because the
electrical architectures of the Swedish and British cars are incompatible with
Ford's.  Mulally finds that incomprehensible, considering that Ford has owned the
European brands for nearly a decade."

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com