Book highlights include Ford's narrow escape from bankruptcy

[jpd80]

Book highlights include Ford's narrow escape from bankruptcy
Leadership gave reins to outsider to save industry icon

By Jaclyn Trop The Detroit News

Ford Motor Co. skirted closer to bankruptcy than the public realized, Detroit News automotive reporter Bryce G. Hoffman says in a book to be released this month.

Cost-cutting measures at the Dearborn automaker included requiring executive approval to buy a box of paper clips. Plants went unwatered and windows unwashed in a further cost-cutting bid.

With Ford Motor Co.'s cooperation, "American Icon: Alan Mulally and the Fight to Save Ford Motor Company" tells the behind-the-scenes account of the automaker's turnaround.

Highlights include:

The board's pressure on Bill Ford Jr. to step aside as CEO in 2006

One director told Hoffman that Ford was reluctant to make decisions and didn't fully participate in meetings.

"He is not giving it the 24/7 effort that he promised us," the director is quoted in the book. "He's not involved in the operational and product meetings. And he's been unable to resolve the internal conflicts. You have to have the CEO calling the shots. Bill isn't."

Ford agreed that he needed help running the company and poached Alan Mulally from his post as CEO at Boeing Co.

The push by some board members to sell the company or file for bankruptcy

The situation became so dire that the board of directors pushed Bill Ford to explore mergers with other automakers and consider selling portions of the company to the private equity firms beginning to show interest.

The Ford family considered taking the company private again, but the only financially viable option was for Bill Ford to hire new blood for the chief executive office.

Ford's secret negotiations with the UAW to produce game-changing contracts in 2007 and 2009

Mulally soon turned a sharp eye to Ford's operations and expenses, leading secret meetings with UAW then-President Ron Gettelfinger to secure contracts that would help Ford stay in business.

Fearing media attention, Ford executives and UAW officials gathered in a nondescript office building behind the Detroit Lions' practice facility in Allen Park, entering through an unlocked side door.

Mulally agreed to keep production of the Ford Focus at the Wayne Stamping and Assembly Plant if Gettelfinger conceded other points as part of the 2007 labor contract, a move that helped Ford avoid the fates of its domestic competitors.

The automaker's slide toward bankruptcy, just months away from running out of cash at the end of 2008

During the third quarter, Ford was losing more than $83 million a day. The company needed to cut costs and boost sales or go broke within months.

"'American Icon' does a good job of portraying the Ford transformation," said Ford spokeswoman Karen Hampton.

"We are proud of what the Ford team has accomplished, and we are even more focused on continuing to make progress in the future," Hampton said in an emailed statement.

"As with any retelling of history, memories and accuracy differ from person to person — and this account is no different," Hampton wrote. "We will let the book speak for itself — while we remain focused on creating the next chapter in Ford's history."

I think I might order a copy......

[Jason[98.EL]]

might have to order a copy myself

[jpd80]

And more surprises:

Book: Ford teamed with Japan rivals to buoy suppliers
At height of recession, industry's bankruptcy fears spurred rivals to save parts makers

By Jaclyn Trop The Detroit News


Ford Motor Co. worked with two Japanese automakers to keep their suppliers afloat during the recession, according to a book by Detroit News automotive reporter Bryce G. Hoffman that will be released March 13.

The secret alliance with Toyota Motor Corp. and Honda Motor Co., Hoffman writes, was part of a broader effort by Ford to shore up its supply base after the financial crisis of 2008 pushed many parts manufacturers to the brink of bankruptcy.

At the rate Ford burned through cash — $7.7 billion during the third quarter of 2008 alone — the automaker would have been broke within months. Then-Chief Financial Officer Don Leclair began planning for bankruptcy.

But if suppliers went bankrupt, Ford would have little hope for its own survival, according to "American Icon: Alan Mulally and the Fight to Save Ford Motor Company."

Ford began secret preparations to shrink its supply base, gathering an internal team during the financial collapse toward the end of 2008 to study its manufacturing network. Known as Project Quark, the study assessed which suppliers could be at risk of collapse if Ford's competitors went bankrupt or discontinued a vehicle model.

Ford monitored the situation of each of its critical suppliers in real time and took steps to support those it deemed critical to its operations. Ford also worked withToyota and Honda to support their supplier base by buying from each others' suppliers, according to Hoffman.

The three and Nissan Motor Co. sent a letter to the U.S. Treasury Department to persuade the government to protect the automotive supply base.

The alliance between Ford and the Japanese automakers would have been unthinkable a year earlier, Hoffman wrote: "It was like Protestants and Catholics coming together to work on a downtown redevelopment plan for Belfast."

The Project Quark team met every day, often from 7 a.m. into the night. Ford narrowed its supplier base from more than 2,000 companies to 850. Automotive veterans were wary of the unlikely partnership, but it represented Chief Executive Officer Alan Mulally's teamwork philosophy.

The automaker didn't speak publicly about Project Quark until Friday.

"The team's direction was to improve our knowledge of the supply base and better understand the impact on the supply chain should one of our competitors fail.The information we gathered was used to accelerate our existing long-term plans to reduce our overall number of production suppliers," said Ford spokesman Todd Nissen.

Ford reached out to other automakers to explore "how we could work together where legally permissible to prevent a collapse of the supply chain," Nissen said. "We shared our concerns with the U.S. Automotive Task Force as they worked to stabilize the industry," he added.

General Motor Corp. declined to participate over concerns about the arrangement's legality and its own restructuring efforts, Hoffman reported.

Ford's own antitrust attorneys "carefully vetted" each trade among Ford, Toyota and Honda to support their suppliers, according to the book.

Chrysler, which was then headed toward bankruptcy, did not participate.

The health of suppliers and automakers is intertwined, said Neil De Koker, president and CEO of the Original Equipment Suppliers Association.

"If one manufacturer has significant problems, chances are that would affect suppliers," De Koker said. "Their interconnectedness is very strong because it's the only way we can survive."

The alliance has proved useful even as the automakers no longer face the dire challenges brought by the financial crisis.

Project Quark is still alive "in the sense that we maintain a robust database of our suppliers to see how they would be affected by a change in the industry," Nissen said.

[Moby Vic]

Ford has teetered on the brink many times in its history.

If you can find a copy of Robert Lacey's Ford: The Men and the Machine, get it. It's an excellent history of the Ford family and the company from the beginning up to the 1980s.

The history of the Ford family is almost Shakespearean.

[jpd80]

If anyone was ever interested in studying business management and corporate governance,
then I think researching and reading about the Detroit three would be required reading.

There are a lot of lessons to be learned with regards to basic business principles and
getting so wound up in your product that you lose sight of the main objective, profit.