The Ford Motor Company has said today that they’re going to fire about 30% of their salaried workforce and 75,000 union workers worldwide. To save the patient, Ford will now cut off a leg and a hand, is the short form.
On the same webpage (www.ctv.ca) there was a link to another automotive story. Toyota is hiring 2,000 workers over the next couple of years to work at their Woodstock and Cambridge plants, building the Matrix, RAV4, Corolla and a Lexus SUV here in Ontario.
One automaker is hiring, another firing. This tells me more than first might appear. I am sorry that anyone is getting the axe, as it hurts individuals, families and communities with the strain that losing the income puts on people. I’m even a bit pro-union in this situation, as the Canadian Auto Workers have cut good, rational, business driven deals with the automakers over the years. CAW is one of those sensible unions who go out of their way to protect their people and still be realistic about their demands.
Given a choice I am a Ford Guy, as I have a lick of sense, unlike Chevy owners or those who have gone over to the Insane Clowns and drive Dodge or Chrysler products. Remember, Friends Don’t Let Friends Drive Chevys.
Having said that, the last car I bought was a Nissan Sentra. When I moved to Toronto, I knew that my driving was going to be primarily urban and mostly downtown. Ideally I wanted a Toyota Prius or a Honda Civic Hybrid, as I prefer to leave as small a carbon footprint as I can. An automatic was mandatory, as there is no way in hell I will drive a stick in stop and go traffic. No hybrids from any manufacturer were available at a price I could afford, in the timeline I had. So, the Sentra is as fuel efficient as I can get but has A/C, a radio and an automatic trans.
Ford has a hybrid: A hulking Expedition SUV that comes loaded with all options including the latte maker, for $35,000. No thanks. Ford has small cars too, except the quality on them is so bad as to make one long for the Yugo or the Lada. Ford’s small cars last about three years. When the gas tank is empty or the ashtray is full, throw them away. Ford pickups and performance cars? Great pieces of go-fast and haul-lots.
Which explains why Ford is laying off that many people: The products suck. Someone in the big building in Dearborn made very, very, bad choices despite having all kinds of expensive market intelligence to hand.
The best type of market intelligence I’ve seen for cars, is to go to a Wal-Mart and walk around the parking lot looking at brands that people have actually put money on the counter to buy. If your brand isn’t there in proportion to your market share, then your product mix is wrong. It doesn’t take a Harvard MBA to figure that one out.
The sorry part of it is that the executives responsible for Ford abandoning the small and medium sized car market will have their jobs in 2008. They’ll probably even get a big bonus and more plush carpets in the office as the company is now profitable.
The poor yob in Windsor working at the Essex Engine Plant who gets laid off next month with two weeks’ severance and a ‘thanks for your nineteen years of service’ will be working at Wal-Mart in 2008 for $6.95 an hour. I doubt he or she will buy another Ford. Ever. He or She will probably go out of their way to tell all their friends and relations to never buy another Ford and I can’t say I blame them.
The argument that Ford, or any of the Big Three, can’t build profitable small and medium cars is complete nonsense. Toyota and Honda, both in Ontario, do a very good job at building small and medium sized cars. Toyota and Honda compensate comparably to CAW rates, including benefits. Toyota and Honda still pay for electricity and water and taxes, just like Ford, or GM or Chrysler. Toyota and Honda buy subsystems from Magna, Lear-Siegler, Dana, Goodyear and the rest, just like Ford, GM and Chrysler.
Where Toyota and Honda excel is in the engineering, design and marketing. Ford, GM and Daimler-Chrysler don’t. Toyota and Honda both turn a nice profit.
Perhaps if the product planners would spend a few hours walking around in a parking lot, that would change. I’m not holding my breath.
RoadDave 