Howes: Ford finally gains back some respect
Ford Motor’s Rodney Dangerfield days may be over.
You remember him – the ol’ comedian who always complained he “got no respect.” Neither did Ford for the past few years: its stock price stuck in neutral, despite minting money with SUVs and F-Series trucks; its product strategy doubted; its CEO, Jim Hackett, considered a lame duck from the start.
But investor sentiment is changing because reality is changing.
The Blue Oval’s global restructuring is taking shape – cutbacks in Europe and South America, greater reliance on its partner in India, salaried workforce reductions in North America. It’s all necessary, if not yet sufficient, to negotiate a future moving in different directions.
And Ford shares? They’re performing better so far this year than their American peers, including Elon Musk’s Tesla.
There are lots of reasons for this. And, of course, the surge could disappear as quickly as it came. But the outside world is beginning to take Hackett at his word: “Don’t watch my lips,” he told the Detroit Economic Club this week, “watch my feet. The work we’re doing with our feet is really extraordinary.”
It’s about time. Hackett’s nearly two-year tenure so far is about three things: catching up to rivals, redesigning how the business operates, and grooming leadership for the future.
Reinvigorated lineups at its Ford and Lincoln brands are expected to fatten margins in the years ahead and buy the automaker valuable time to play out bets in mobility, autonomy and electrification. Hackett’s emphasis on what he calls “increasing the clock speed” of product development and manufacturing is expected to reduce costs.
And his latest executive shuffle effectively sets up a two-man battle for succession: Joe Hinrichs versus Jim Farley; today’s auto industry versus tomorrow’s; the cash-generating truck and SUV business versus what for now is the cash-eating space of Auto 2.0.
All of which could be pitched from the top of the Glass House if Hackett’s redesign falters and Ford’s directors decide they need to find yet another savior from the outside. Always a possibility, that, though the preferred alternative should be executing the fixes Hackett and Company have pledged to deliver.
The boss’s wonky manner doesn’t always help. He talks about a “think phase." He spends part of his weekend emailing articles from obscure scientific journals to executives and he’s using outside consultants to help optimize the business and manage people.
None of which exactly oozes confidence in the Ford troops, does it?
Which is exactly the point. Ford’s faithful have been too willing to hide behind the earnings power of F-Series pickups and profit-rich Navigators, as if those monsters of the U.S. market are all their 115-year-old company needs to survive and prosper.
But they’re not. Technology and government regulations grounded in environmental priorities are reshaping the auto industry Henry Ford built and companies that don’t change along with them stand to pay a heavy price for complacency.
Ford’s Hackett may be too professorial for some of the old auto hands in Dearborn … even on Wall Street. But he sees clearly the inflection point facing Ford – and his people would be smart to see it, too.
Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.