No. 902
June 21, 2017
 

About The Autoextremist

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with Autoextremist.com, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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The Autoextremist - Rants


Monday
Jun192017

Mr. Hackett’s Quixotic Quest. 

By Peter M. DeLorenzo

Detroit. While writing this column over the years, I have tried to convey that Detroit is a company town like no other. Yes, there are other company towns that come to mind, of course, like L.A. and its omnipresent Hollywood raison d’etre. But Detroit? Well, it’s the company town of company towns.

Suspend what you’ve read or heard about the latest Detroit renaissance for a moment, because this just in: It’s real but only selectively intermittent, and don’t for a moment think that what we have going on here qualifies as The Shining City on the Hill by any stretch. The constant din of “we got it goin’ on” cheerleading in the local news has almost become unbearable, and there’s no end in sight. The city even has a glittery new light rail system called the QLine, which has become "The $137 million Answer to the Question That Absolutely No One was Asking Super Slo-Mo Train to Nowhere" literally overnight. So despite all that’s going on, or not going on in Dee-troit (aka HomerVille USA), depending on how you look at it, it’s easy to see that not all that much has actually changed in the giant scheme of things.

To wit? Executive realignments and corporate restructurings at the car companies and their suppliers still merit front-page news. Not just in the business sections of the newspapers and in focused features on Internet sites, but front and center as the dominant lead stories, surpassing even the latest hand-wringing du jour going on in the national news.

And when you live around these parts you’ll find that everywhere you go you’ll stumble upon a car display - at shopping malls, at corporate-sponsored charity events and golf tournaments, at high school and collegiate football games, and on and on. Everywhere you turn there’s some sort of vehicle display, which is more than a little mystifying when you really think about it because this is, after all, a region where 75 percent of the residents have some sort of direct or indirect connection with either an auto company or a major supplier. It begs the question: When we already eat, sleep and breathe this business 24/7, do you still need a car display to remind you what business we’re all connected to? Weird, right?

But this is only a brief snapshot of the landscape around here designed to set the table for what I really want to discuss today.

Last month, Bill Ford decided to make a change at the top of his family’s car company. Still smarting from the departure of the much-loved Alan Mulally three years after the fact, Ford grew impatient with Mulally’s replacement – Mark Fields – and jettisoned him in favor of one of his very best friends, Jim Hackett. Fields only delivered two of the most profitable years in the company’s history but, you know, “things just didn’t work out” or something like that.

And Hackett? He is the former Steelcase CEO who also did an interim stint as the University of Michigan’s athletic director. Hackett’s U of M connection? He was once on a Bo Schembechler-coached football team where he was able to learn valuable leadership and management lessons. His other claim to fame? He recruited Jim Harbaugh to take over the football program before he moved on to other things. Like running the Ford Motor Company.

Hackett has been the subject of many stories in the local media since he was anointed as the next Ford CEO, as is to be expected. But there have been a remarkable number of them, even for this town. Much of that has to do with this story being the biggest thing to hit this company town in a while, but it also has to do with the fact that Bill Ford, amid myriad other management changes, replaced the company’s public relations director with media and Ford veteran Mark Truby. And the PR function is now directly reporting to – ta-dah - Bill Ford himself.

Why? Well, Bill Ford’s name is on the door, lest anyone forget, and if he wants the story of his friend Jim Hackett’s ascendancy to be CEO of the Ford Motor Company handled just so, then so it shall be. Ford wants everyone to get to know the Jim he knows and likes, and if a story thread emerges that Hackett is remarkably like Alan Mulally, well, even better.

Hackett, as portrayed by the latest Ford PR spin, is supposed to be a gifted, contemporary, “inclusive” leader, one who prefers small meetings and swift action, and places extraordinary emphasis on personal integrity. He’s a “visionary” with extensive Silicon Valley connections and a deep understanding of how New Technology and its fundamental design imperative will shape our future and everyday life, someone who is not entrenched in the automobile business or in the Ford Motor Company’s moribund excuse for a “culture.” Sounds excellent, no?

In the latest – and lengthy - front-page feature on Hackett that appeared this past Sunday in the Detroit Free Press, Brent Snavely wrote what is – at least from Ford’s perspective – the definitive, in-depth, get-to-know Jim Hackett piece. (By the way, as is this company town’s wont, many carpal-tunnel-stained members of the media are now furiously jockeying to tell the story of Jim Hackett’s rise to become CEO of the Ford Motor Company in an “approved” book. It will be only semi-interesting to see who lands that “get.” And we’ll all find out soon enough.)

The big takeaways from Snavely’s piece? Bill Ford wants to accelerate the company’s decision-making and drive an increased focus on innovation, and to that end Hackett and Ford want to "create a flatter structure so that it doesn’t feel the weight of hierarchy on every decision."

That’s a lot to chew on, especially for a company such as Ford, which is dominated by its notoriously siloed culture and its seemingly endless network of fiefdoms filled with lethal, pitchfork-wielding operatives hell bent on maintaining the status quo at all costs. (You might ask, at this juncture, didn’t Alan Mulally do away with all of the hordes of negative sabre-rattlers during his tenure? No, but by the sheer force of Mulally’s will and presence those entities were shamed to go under ground. They’re back now, in full force.)

But Jim Hackett has a plan. In fact he has a 100-day plan that will be, according to him, transformative and help lead the Ford Motor Company to new heights. It consists of four main points, according to Snavely:

1. Reevaluate revenue opportunities.

2. Evaluate the fitness of the company.

3. Reevaluate capital deployment.

4. Renew focus on innovation.

Okay, none of this stuff is earth shattering by any means; in fact most of it is restating the obvious. Let me translate it for you:

1. In a declining auto market, Ford has to make more money, wherever and however it can.

2. Ford, as a company, has to be better and more efficient.

3. If Ford isn’t making money in certain aspects of its business, either fix it or stop doing it.

4. Ford will be vital part of the new mobility business, and all that entails.

This is all well and good, and on top of all of that if Hackett can instill more touchy-feelyness into what passes for the Ford culture, then more power to him because it will make Bill Ford very, very happy. But seriously, who’s kidding whom here? With all due respect to Mr. Hackett, his carefully worded platitudes about fostering a collaborative working environment to drive innovation might have sounded good at Steelcase or in a TED lecture that he attended, but the last time I checked the Ford Motor Company is not only a giant global manufacturing enterprise with a set of wide-ranging and never-ending challenges, it is also involved in one of the most complicated endeavors that exists on this earth. In other words, designing, engineering and building cars and trucks really doesn’t have anything to do with platitudes or pronouncements.

And to make matters even more daunting for Mr. Hackett, Ford, as a company, goes about its business wrapped in a suffocating culture that revolves around one remarkably ineffective and fundamentally flawed premise. What is that, you might ask? It’s the debilitating notion that the company can solve any problem and do anything – let me repeat, anything – better and cheaper than any outside entity. Translation? The Not Invented Here syndrome is a way of life at Ford.

And what are the ramifications of this oppressively pervasive “NIH” syndrome? Because of its steadfast refusal to work with companies with more knowledge and intellectually accurate property, Ford is lagging behind other automakers. And not by a little bit, either. Ford has missed opportunity after opportunity – especially in the area of electronics and connectivity – because of the quaint and woefully misguided notion that it not only knows better, but it can do it better. And cheaper. The reality? When Ford sets its mind to doing something it usually takes twice as long and costs twice as much. If not more. And this ingrained wrongheadedness has led the company down the primrose path of mediocrity more times than I care to count. (I am absolving the True Believers at Ford, because they know what they're doing and are not a part of the NIH hordes.)

Ford’s problems are not only systemic and part of a resolutely moribund culture; they’re deeply ingrained in the psyche of the company. Translation? A giant Blue Oval of Not Good.

To say that Mr. Hackett’s quest to make a difference in his first 100 days at the Ford Motor Company is Quixotic is the understatement of this and any other year.

And that’s the High-Octane Truth for this week.