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Ford takes aim at its next 100 with a clean sheet of paper

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#1 ·
Wednesday, March 12, 2003
World Auto View
By Daniel Howes / The Detroit News

DEARBORN--It's not often an auto boss admits to borrowing ideas from rivals, but for Ford Motor Co. Chairman Bill Ford Jr., no idea that might help his family's company prosper into a second century is worth ignoring -- even if it comes from Carlos Ghosn.

He's the Brazilian-born Frenchman who arrived at Nissan Motor Co. headquarters in Tokyo four years ago and has since engineered the swiftest, most successful, turnaround the global industry has seen in decades. Among his most effective tools has been what Ghosn calls a "clean sheet of paper," which Bill Ford hopes to wield to similar effect.

It won't be easy, but that isn't stopping the 45-year-old Ford from trying. He has assembled a team of 15 executives under the supervision of Vice-Chairman Allan Gilmour, asked them to study key functions within the company and then describe what they would look like if they were created today on a clean sheet of paper.

The message is simple, if radical, for a 100-year-old company whose massive size makes it easy to perpetuate bad habits and conventional wisdom: We know where we are. Tell us where we should be and how you think we can get there.

They're looking at labor, benefits, manufacturing, non-product costs, suppliers, distribution, environmental policy and regulations, among other things. Months away from any conclusions, the idea is to get beyond the time-honored Detroit way of saying, "We can't because of ... the UAW, the federal government, our dealers or our suppliers."

First, Bill Ford wants to develop disciplined and transparent processes that keep Ford's employees and executives from making mistakes that get the company in trouble -- such as the inquiry into whether President Nick Scheele improperly steered Ford's advertising business to WPP Group of London or, far worse, Ford's $1 billion gaffe on its investment in palladium.

Second, Bill Ford seeks a long-term strategy that will increase Ford's chances of prospering long after he and his management team pass from the scene. In retrospect, Ford under Alex Trotman and Jacques Nasser saw fat profits and serious setbacks but, together, they failed to develop a coherent strategic view of where Ford should head.

Trotman's Ford 2000, which consolidated too much power in Dearborn, is dead. Nasser's consumer business units, launched at the height of the dot-com craze when manufacturing was for losers, lost sight of the core business of building cars and trucks real people want and doing it more efficiently than rivals.

Since replacing Nasser in October 2001, Bill Ford's job has been consumed with quarterbacking a revitalization plan that aims to cut costs an average of $700 per vehicle and deliver $7 billion in annual pre-tax profit by mid-decade -- no easy task in these uncertain times.

Despite losing $6.4 billion over the past two years, Ford is showing progress. Its share of the U.S. market is rebounding and it boasts a cash hoard of $25 billion, a reassuring cushion amid waning consumer confidence and fears of war in Iraq.

Bill Ford's "Clean Sheet" exercise, overdue for a company celebrating its first century in June, aims to draw a road map for 2005 and beyond. Asking where Ford needs to be and charting a course offers the best chance for getting there.
 
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