How the Unions Wrecked Ford


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.”

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