Comments (12)

• Alex

  Let's suppose that Garet Garret's analysis is correct, and that Ford Motor has lost its way and been featherbedding the labor unions since the 1930s.

  My question is: What does Ford Motor need to do right now in order to effect the "complete revolution" that would ensure its "real salvation"?

  Published: September 27, 2007 8:32 AM

• Bill

  In the current political-legal environment there are only two solutions for Ford and GM:

  1. Screw the owners of common stock immediately through bankruptcy: The airlines used this method and transferred most of their future obligations to the government.

  2. Slowly Screw future employees through outsourcing: Slowly outsource all business functions where you have these future oblications to areas without the political-legal environment.

  I give GM and Ford some credit as they have been doing a much better than average job at 2 versus the airlines and steel industries that have used option 1 extensively. Of course there are lots of airlines and steel competitors inside and outside of the US while there are only 3 major semi-US auto manufacturers and maybe 10 worldwide.

  Published: September 27, 2007 9:09 AM

• jeffrey

  Well, I would say three steps, but Karen DeCoster might chime in here and she knows a heck of a lot more than I do. 1) a complete corporate takeover that tosses out the whole management structure, 2) a shut down the whole Michigan operation and a move to the South or overseas, 3) the hiring of a totally non-unionized workforce. All three steps are made almost impossible by virtue of federal regulations. Finally, of course, the company would have to start making cars that consumers want to buy and sell them at prices consumers are willing to pay.

  Published: September 27, 2007 9:12 AM

• Jardinero1

  The New Deal started in the thirties and "All events since that time have consisted mostly in the slow but sure strangulation of a once-great company." The premise is absurd and flies in the face of the facts. Is Ford a smaller company today than during the New Deal? Surely, it is less profitable today but most of the post New Deal period was marked by great profitability. Are unions solely to blame for that? "Then management lost sight of the original vision of its great founder." The founder held some anachronistic ideas foremost of which was aversion to allowing buyers to purchase on credit. This was one of the biggest impediments to Ford's growth in the pre-depression era.

  Published: September 27, 2007 9:30 AM

• Alex

  Perhaps even the most drastic restructuring of the business- as suggested here - will not suffice to return Ford Motor to profitablity.

  Environmental considerations (the "green critique" of car ownership), a surfeit of manufacturing capacity in the auto industry, the psychology of indifference to economic reality, and a history of managerial inertia could make Ford a lost cause and recovery a pipe dream.

  Published: September 27, 2007 10:11 AM

• 8

  Sell the company to China. They already offered to buy Ford, and were rebuffed.

  Published: September 27, 2007 12:53 PM

• RWW

  I used to rebuff my Ford every time it rained.

  Published: September 27, 2007 1:20 PM

• RWW

  Sorry if I've waxed silly.

  Published: September 27, 2007 3:55 PM

• Jim Cramer

  Anyone looked at Ford's balance sheet lately ? They are drowning in debt. Not to mention they aren't selling too many cars these days nor will they anytime soon. With no plans for getting off the gasoline standard which GM has announced plans for H-cars, I doubt they can do much except churn the preferred for the common.

  Published: September 27, 2007 8:59 PM

• DickF

  Ford was a major target of tariff retaliation because of the Hawley-Smoot tariff. US exports to Spain for example went from 7,415 in 1929 down to 473 in 1932, Italy tripled their import quote on US automobiles, and the Swiss canceled all government orders of US vehicles. Ford attempted to get around this by building assembly plants in Europe but nations such as the Italy amended their tariffs to include any vehicle assembled with US parts.

  This was the direct expressed retaliation against Hawley-Smoot. Other nations also increased tariffs on US autos or established quotas that were not attributed directly to Hawley-Smoot.

  Published: September 28, 2007 6:41 AM

• Paul Harding

  I believe it all started with everybody worried about paying a fair profit for what you got. The eventual end of consumerism and shopping price not quality has given America homes made of chipboard, eggs from chickens raised in stinking buildings and cars designed to last 3 years or 36000 miles. We bought Manhatten with a few cheap beads. We are selling America back for a few cheap trinkets made elsewhere. It doesn't really matter what you pay an assembler. Most cars only use up 40 hours of assembly anyway. What matters is how it was designed, how it will last, how it will drive, how efficient it truly is, and how safe and comfortable it is.
  We lost sight of quality in all aspects of our life. We are paying the price now.

  Published: September 28, 2007 11:51 AM

• Scott D

  I don't directly disagree with quality/durability criticisms such as yours. I think that the phenomenon is real, but not quite the way you think. It is important to remember a few things:

  1. Value is subjective. Cheap, non-durable goods may be preferable to durable, expensive goods for a number of reasons. The market adjusts very quickly to correct when prices do not reflect reality.

  2. Time preference plays a role in purchases. Consumers who buy more durable goods are thinking further into the future. Those who buy cheap goods value its present utility over the future.

  Mass deception is not really an option, given how the market punishes such behavior. I would lay the blame instead on greater time preference, chiefly as the result of inflation.

  Published: September 28, 2007 12:15 PM