Bill Ford Says No Bankruptcy




Don’t ask about bankruptcy if you’re talking to Bill Ford. That’s an option not on the table, according to Ford Motor Co.’s CEO. Though the automaker’s turnaround plan is in its “early days,” Ford is convinced that once things stabilize in North America, “this discussion will disappear.”


The challenge for Ford Motor Co. is to institutionalize change, “without it being chaotic,” said the great-grandson of company founder Henry Ford. “We have to make (innovation) part of the decision-making process without disrupting the company.” Ford had plenty more to say during an appearance on Wednesday, where he was named Industry Executive of the Year.


The award, presented by the trade group, the Automotive Industry Action Group, came barely three months after Ford Motor Co. unveiled its Way Forward turnaround plan, a draconian move to close parts and assembly plants, while eliminating as many as 30,000 blue- and white-collar jobs.


In a discussion with reporters, the Ford Chairman described 2006 as a “transitional year,” in which the automaker is trying to follow two paths. There’s the traditional goal of “keeping plants open,” while also shifting the fundamental processes by which Ford designs, builds, and sells its products.


At the core, he said, is making innovation a core value in the company. “It sounds easy. It’s not.”


Over a century, the automaker has picked up plenty of “bad habits,” Ford added. It is too hierarchical, for one thing, and not in close enough touch with the American market. A central element of the Way Forward, he explained, “starts with the customers, rather than (focusing on production) capacity and asking how we’re going to fill it.”


As a result, he said, there will be a “very different cycle plan,” a markedly different approach to the product lineup Ford brings to market going forward. Though Ford declined to discuss specifics, the company is known to be working on distinctive alternatives to conventional models, such as the Fairlane wagon/minivan crossover, which is expected to go into production in several years.


Asked about the company’s financial problems, Ford acknowledged “We have our work cut out for us,” adding later that, “We're acutely aware of the state of our industry, of the state of a lot of the companies we do business with, and frankly, our own deteriorating ratings with the ratings agencies, and so we're working very hard on the fundamentals of our business."


But he bridled when asked about the possibility that the number-two automaker, like its crosstown rival General Motors, might be teetering on the edge of bankruptcy. "We've got one big problem and it's the U.S. auto business, and we're going to fix that, and when we fix that, this discussion will disappear."


Part of the problem, Ford noted, is that the U.S. auto industry is being “buffeted” by problems not of its own making. The number-two American maker is certainly feeling the effects of GM’s problems, especially the crisis with Delphi, the bankrupt supplier. Workers there have threatened to strike if the company is permitted by the courts to void its labor agreements. In turn, that would likely shut GM down due to parts shortages.


Ford has “relatively little exposure,” using few parts made in the U.S. by Delphi. But “Whatever plays out (there) will have a significant impact on negotiations in 2007,” said Ford’s CEO, when his company goes back to the bargaining table with the UAW.


With all the events shaking up the auto industry, “my biggest challenge is to keep my people from being distracted,” said Ford. That includes the company’s hard-charging chief of North American operations, Mark Fields. Ford had nothing but praise for the architect of the Way Forward, saying “I’m very pleased with how he’s doing.”


Fields represents a new approach to doing business, Ford suggested. “Mark has laid all the cards on the table. Only when you’re dealing with real honesty do you get real solutions.”

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