Where’s the Innovation in closing plants?

The Wall Street Journal reported on Friday that Ford’s North American restructuring plan will include closing 5 plants and eliminating 6% of it’s workforce. Ford did not comment, other than to reiterate that announcements regarding the restructuring plan will be made in January.

According to the Journal, the 5 plants on the block include assembly plants in St. Louis, Atlanta and St. Paul, Minnesota, as well as an engine-parts plant in Windsor, Ontario Canada, plus a truck assembly plant in Cuautitlan, Mexico. In total, these facilities employ about 7500 employees.

Of course it will only be speculation until the plan is unveiled next year, but continuing to close plants in an effort to match capacity to continuously sliding market share does not represent any kind of ‘innovative’ change in strategy.

Wall Street should be looking not only for short term actions that will help stop the bleeding, but also for innovative new strategies designed to keep plants open, increase market share and re-build the business. Surely new, high quality, appealing and competitively priced product is a requirement and an enabler, but the focus on innovation to guide the company forward should be equally applied to business and manufacturing process. The plan should for example, include innovative applications of lean thinking and principles to take the Ford Production System to the next level. Executed with a focus on the long term, innovation here can impact short term results and more importantly, create a basis for sustained energy and drive to continually improve at a much faster pace.

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Luke Van Dongen

Luke, an auto industry engineering veteran, blogged here from 2005 to 2006.

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1 Comment on "Where’s the Innovation in closing plants?"

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  1. Mark Graban says:

    Be innovative!

    Oh, yeah, we’re going to close a bunch of plants. But don’t worry or be distracted by that.

    Be innovative!

    Carly Fiorna, at HP, publicized their company slogan of “Invent.”

    That didn’t help them, nor did it save her job.

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