Found On Road… Death Spiral

2 – Ford to cut one-third of salaried staff, $5 billion in costs, stop dividend

As a guy who grew up in Michigan and around the auto industry, this is sad. Does it really take a new “$30 Million Dollar Man” to come up with slash-and-burn management approaches? That's not terribly innovative. How much did the consultants get paid to convince management “you're not selling as many cars, and it looks like you won't be in the near future, so you better not build as many cars.” The death spiral continues.

Does the “new guy” take the blame for this? It's probably just bad timing on Mulally's part to new appointed new captain after the ship hit an iceberg. What a slap in the face to Ford workers that the big boss can get $18.5 Million up front while the company is being decimated because the company suffers from “rapid shifts in consumer demand that affect our product mix and continued high prices for commodities”?

Translation — Ford doesn't design vehicles that people want to buy, so the workers suffer as a result.

Lesson for me — don't EVER be part of a company that isn't growing. Shrinking is painful. As management, don't let it get to that. It all falls apart if you're not growing, no matter what the business.

The lesson I would NOT take away from this: “See, lean doesn't work, it couldn't save Ford.”

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  1. […] 15, 2006 · 1 comment Jim Womack sent out one of his emails today, this time focused on Ford, with their termoil. Either he writes quickly or he already knew Ford was in trouble and was inspired to write by the […]

  2. […] the point that the combination of increasing revenue and cutting costs is ideal. Mark Graban at the Lean blog said about the situation at the Ford Motor Company: Lesson for me — don’t EVER be part […]

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