One wag described Ford Motor’s new CEO as a “former furniture salesman and college football fan-boy.”
2017 Ford Focus: 14 recalls in Canada just since 2012. Ford quality has been terrible for years now.
Whatever his credentials, Denise Cuthbert would like new Ford CEO Jim Hackett to do two things: fix once and for all the wonky gearbox in her 2012 Ford Focus and put some serious effort into boosting her investment in Ford Motor shares.
Cuthbert has been through three transmissions since buying her Focus and “another is likely in the future.” At first, she had to fight Ford Canada tooth and nail to get the problem-plagued gearbox replaced. Then new ones were installed with maddening regularity, year after year.
The latest one, she adds, “is supposed to be good, but it was awful at New Year’s.” Going up hills during the holidays, her car stalled frequently and a dashboard light warned of overheating. “Ford said it was common when not broken in and it would get better. It did,” she adds.
Beleaguered Ford shareholders will not be happy to learn that Ford has told Cuthbert – and we can assume many thousands of others like her – that the company will cover all the costs of this disaster of an automatic transmission for 10 years.
Jim Hackett, Ford’s new president and CEO, with Executive Chairman Bill Ford (right).
The Focus, in fact, has been the subject of 14 separate recalls in Canada just since 2012. Last year, Transport Canada said it was investigating a “significant” number of concerns over Ford Focus and Fiesta models after owners said their cars began jerking and stopping suddenly.
Cuthbert and others appear to have been terrorized by Ford’s PowerShift Dual Clutch automatic. German automakers have had great success with dual clutch gearboxes, but Ford’s foray has been an utter catastrophe.
The problem boils down to this: Ford moved too quickly to introduce its dual clutch setup, pushing ahead with new technology before it was ready for prime time.
For Cuthbert, this experience has been especially troubling because she’s been a loyal Ford shareholder for more than half a decade. As a Ford owner, she’s embarrassed by Ford’s technological incompetence and she’s been troubled by a languishing Ford share price – despite a healthy and consistent dividend in the 5%-range.
Former Ford Motor Company CEO Mark Fields reportedly was more concerned with the nuts and bolts of running a car manufacturer than artificial intelligence, 3D printing, robotics and so-called “deep learning.
Shareholders and owners like Cuthbert may or may not be comforted by this week’s dismissal of Mark Fields, the ousted CEO who spent his entire career rising through the ranks of Ford. Under Fields’ leadership, Ford spun off record profits and a solid dividend, but the share price declined 40%.
Ford’s shares today sell for about $11 (US), down from $15 (US) two years ago. If you invested in Ford exactly two years ago, you would be down 27 per cent. Sure, sure, the dividends have been nice — including special dividends in 2016 and 2017) – but an investment in a basic S&P 500 index fund would have delivered a far richer return.
During that time, and dating back several more years, the quality of vehicles produced by Ford Motor has been terrible. In the latest J.D. Power and Associates’ long-term Vehicle Dependability Study (VDS), Ford is near the very back of the pack.
Indeed, Ford’s quality woes can be traced to the early part of this decade when the company began a serious push to become known as a maker of innovative, technologically advanced and very stylish cars and light trucks. As Ford has introduced new technologies and designs, quality has suffered and suffered badly.
How bad is Ford’s quality? As Automotive News reported last month, Ford’s top executives forfeited hundreds of thousands in bonus dollars after the company fell short of its internal quality targets in 2016. Ford’s proxy statement said senior leadership achieved just 52 per cent of the quality goals its board of directors set in 2016.
Ford’s fully autonomous Fusion Hybrid research vehicle on the streets of Dearborn, Mich.
And yet on Monday, when Bill Ford Jr. announced that Mark Fields would be replaced by new CEO Hackett, Henry Ford’s great-grandson didn’t focus on a renewed effort to improve Ford’s quality and boost its manufacturing and product-cadence efficiencies. Instead, he dwelt on this:
“Well, if you think about the trends that are coming at us, things like artificial intelligence, 3D printing, robotics, deep learning, we need to have a point of view on all of these things and not only a point of view, but a plan to either integrate them into our business, to help us drive our business, or a thoughtful reason as to why we don’t think that’s a right reason at the time.”
Ugh.
Let’s be very clear. Ford in 2017 is a car manufacturer. Of course Ford’s leadership needs to think strategically and for the long term, and it must be deeply concerned with “innovation.” But not at the expense of its core business – which is making and selling a commodity, in this case cars, to people like Denise Cuthbert.
Owners like her might enjoy owing a talking car that can do the laundry and drive itself. But what they really want is a reliable, safe, comfortable and affordable car that goes from A to B. Period.
And Ford owners and Ford stock owners don’t care whether or not Ford is a “transformative” company; they want cars that work every time with the turn of a key and a share price that goes up, not down.
This brings us to Hackett. Of all the potential replacements for Fields, he appears to be the most spectacularly unqualified candidate possible. New CEO Hackett, we’re led to believe, is a change agent who will push autonomous vehicles and drive all sorts of other technological marvels into new generations of Ford vehicles.
Hackett comes to the top Ford job after a brief stint as head of Ford’s autonomous vehicles subsidiary FordSmart Mobility LLC. He has been on the board of Ford since 2013 which is at least helpful in understanding the complexity of a global carmaker.
But Hackett’s resume should worry anyone with a deep understanding of the complex car business on a global scale. As former General Motors CEO Dan Akerson once told me, running a car company is more challenging and difficult than anyone can imagine who hasn’t done it. That from a man who ran two telecom companies and worked as an investment expert before taking on GM.
Hackett? Well, he was CEO of Steelcase, an ages-old Michigan furniture manufacturer before moving on to run the athletic department at the University of Michigan, famous for its massive football program and a big stadium He may be, as his supporters have argued, a wonderful leader, a gifted cultivator of corporate culture and a change agent of unparalleled skill. He’s also 62 and has never run a car company.
He seems a little late in life for on-the-job learning – like a branding expert becoming president of the United States. The truth is, Hackett simply cannot appreciate what’s in store for him. But he’ll find a cautionary tale in the story of how Ford botched the introduction of its innovative dual clutch gearbox.
After he studies that debacle, he should call Akerson right away. If that doesn’t sober him up, and before he gets all carried away with being a change agent, he should reach out to Cuthbert and all the other unhappy Ford owners and explain how his deep knowledge of making furniture and managing a college football program is going to get her Focus fixed now and forever.
One wag described Ford Motor’s new CEO as a “former furniture salesman and college football fan-boy.”
2017 Ford Focus: 14 recalls in Canada just since 2012. Ford quality has been terrible for years now.
Whatever his credentials, Denise Cuthbert would like new Ford CEO Jim Hackett to do two things: fix once and for all the wonky gearbox in her 2012 Ford Focus and put some serious effort into boosting her investment in Ford Motor shares.
Cuthbert has been through three transmissions since buying her Focus and “another is likely in the future.” At first, she had to fight Ford Canada tooth and nail to get the problem-plagued gearbox replaced. Then new ones were installed with maddening regularity, year after year.
The latest one, she adds, “is supposed to be good, but it was awful at New Year’s.” Going up hills during the holidays, her car stalled frequently and a dashboard light warned of overheating. “Ford said it was common when not broken in and it would get better. It did,” she adds.
Beleaguered Ford shareholders will not be happy to learn that Ford has told Cuthbert – and we can assume many thousands of others like her – that the company will cover all the costs of this disaster of an automatic transmission for 10 years.
Jim Hackett, Ford’s new president and CEO, with Executive Chairman Bill Ford (right).
The Focus, in fact, has been the subject of 14 separate recalls in Canada just since 2012. Last year, Transport Canada said it was investigating a “significant” number of concerns over Ford Focus and Fiesta models after owners said their cars began jerking and stopping suddenly.
Cuthbert and others appear to have been terrorized by Ford’s PowerShift Dual Clutch automatic. German automakers have had great success with dual clutch gearboxes, but Ford’s foray has been an utter catastrophe.
The problem boils down to this: Ford moved too quickly to introduce its dual clutch setup, pushing ahead with new technology before it was ready for prime time.
For Cuthbert, this experience has been especially troubling because she’s been a loyal Ford shareholder for more than half a decade. As a Ford owner, she’s embarrassed by Ford’s technological incompetence and she’s been troubled by a languishing Ford share price – despite a healthy and consistent dividend in the 5%-range.
Former Ford Motor Company CEO Mark Fields reportedly was more concerned with the nuts and bolts of running a car manufacturer than artificial intelligence, 3D printing, robotics and so-called “deep learning.
Shareholders and owners like Cuthbert may or may not be comforted by this week’s dismissal of Mark Fields, the ousted CEO who spent his entire career rising through the ranks of Ford. Under Fields’ leadership, Ford spun off record profits and a solid dividend, but the share price declined 40%.
Ford’s shares today sell for about $11 (US), down from $15 (US) two years ago. If you invested in Ford exactly two years ago, you would be down 27 per cent. Sure, sure, the dividends have been nice — including special dividends in 2016 and 2017) – but an investment in a basic S&P 500 index fund would have delivered a far richer return.
During that time, and dating back several more years, the quality of vehicles produced by Ford Motor has been terrible. In the latest J.D. Power and Associates’ long-term Vehicle Dependability Study (VDS), Ford is near the very back of the pack.
Indeed, Ford’s quality woes can be traced to the early part of this decade when the company began a serious push to become known as a maker of innovative, technologically advanced and very stylish cars and light trucks. As Ford has introduced new technologies and designs, quality has suffered and suffered badly.
How bad is Ford’s quality? As Automotive News reported last month, Ford’s top executives forfeited hundreds of thousands in bonus dollars after the company fell short of its internal quality targets in 2016. Ford’s proxy statement said senior leadership achieved just 52 per cent of the quality goals its board of directors set in 2016.
Ford’s fully autonomous Fusion Hybrid research vehicle on the streets of Dearborn, Mich.
And yet on Monday, when Bill Ford Jr. announced that Mark Fields would be replaced by new CEO Hackett, Henry Ford’s great-grandson didn’t focus on a renewed effort to improve Ford’s quality and boost its manufacturing and product-cadence efficiencies. Instead, he dwelt on this:
“Well, if you think about the trends that are coming at us, things like artificial intelligence, 3D printing, robotics, deep learning, we need to have a point of view on all of these things and not only a point of view, but a plan to either integrate them into our business, to help us drive our business, or a thoughtful reason as to why we don’t think that’s a right reason at the time.”
Ugh.
Let’s be very clear. Ford in 2017 is a car manufacturer. Of course Ford’s leadership needs to think strategically and for the long term, and it must be deeply concerned with “innovation.” But not at the expense of its core business – which is making and selling a commodity, in this case cars, to people like Denise Cuthbert.
Owners like her might enjoy owing a talking car that can do the laundry and drive itself. But what they really want is a reliable, safe, comfortable and affordable car that goes from A to B. Period.
And Ford owners and Ford stock owners don’t care whether or not Ford is a “transformative” company; they want cars that work every time with the turn of a key and a share price that goes up, not down.
This brings us to Hackett. Of all the potential replacements for Fields, he appears to be the most spectacularly unqualified candidate possible. New CEO Hackett, we’re led to believe, is a change agent who will push autonomous vehicles and drive all sorts of other technological marvels into new generations of Ford vehicles.
Hackett comes to the top Ford job after a brief stint as head of Ford’s autonomous vehicles subsidiary FordSmart Mobility LLC. He has been on the board of Ford since 2013 which is at least helpful in understanding the complexity of a global carmaker.
But Hackett’s resume should worry anyone with a deep understanding of the complex car business on a global scale. As former General Motors CEO Dan Akerson once told me, running a car company is more challenging and difficult than anyone can imagine who hasn’t done it. That from a man who ran two telecom companies and worked as an investment expert before taking on GM.
Hackett? Well, he was CEO of Steelcase, an ages-old Michigan furniture manufacturer before moving on to run the athletic department at the University of Michigan, famous for its massive football program and a big stadium He may be, as his supporters have argued, a wonderful leader, a gifted cultivator of corporate culture and a change agent of unparalleled skill. He’s also 62 and has never run a car company.
He seems a little late in life for on-the-job learning – like a branding expert becoming president of the United States. The truth is, Hackett simply cannot appreciate what’s in store for him. But he’ll find a cautionary tale in the story of how Ford botched the introduction of its innovative dual clutch gearbox.
After he studies that debacle, he should call Akerson right away. If that doesn’t sober him up, and before he gets all carried away with being a change agent, he should reach out to Cuthbert and all the other unhappy Ford owners and explain how his deep knowledge of making furniture and managing a college football program is going to get her Focus fixed now and forever.
About the Author / Jeremy Cato
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