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A GIANT BLUE OVAL OF NOT GOOD.
Detroit. Well, well, well. Jim Farley, Ford’s “I’m a genius just ask me” CEO, offered up a monumental mea culpa to financial analysts for the company’s abysmal performance in 2022, after the company posted a crushing $2 Billion loss for the year. Farley did his best, fall-on-his-sword presentation to the analysts and media by stating: “This has been humbling for both me and the team.”
No. Shit. Dot. Com.
Let me remind everyone for the hundredth time that Farley was to be “The Savior” who was appointed by Chairman Bill Ford to lead the Ford ship to the Promised Land, a fantasy world akin to an idyllic state of mind awash in bunny rabbits, rainbows and endless profits. Instead, the “Boy Wonder” has run the whole enterprise aground.
In case you’re wondering, this is not only a spectacular embarrassment for Farley and his minions; it is a shocking report from a company boasting the F-150 pickup [[both ICE and EV versions), the Bronco SUV, and the Mach-E EV. Remember, this was a company that thrived on the constant drumbeats generated by its PR minions, who touted the company’s “can’t-miss” product lineup at every opportunity – in other words, every day ending in a “Y”. This company-generated PR “noise” was then projected into the media landscape with considerable help from the Detroit Free Press [[aka The Ford Times), by a beat reporter who is incapable of even a shred of objectivity when it comes to Farley and his perceived “genius.” It is not uncommon for newspaper readers in this town – at least the ones who are left – to be burdened with a 5,000+ word piece on Ford and Farley, which seemingly occurs every other week. Tedious doesn’t even begin to cover it.
Let me repeat that number again: A $2 Billion with a “B” loss in 2022 with a bevy of [[allegedly) home run products and sky-is-the-limit optimism emanating from Dearborn about its prospects and its forthcoming profits. Farley offered no specifics for the analysts as to how he is going to “fix” things at Ford, only suggesting that he and his “team” had undertaken a deep dive into all things Ford to figure it out. And that simply is Not. Good. Enough. Farley is running up against the same factors that have existed at Ford for decades, including:
1. Entrenched fiefdoms constantly working counter to the company's overall direction. No automotive company is as paralyzed by its assorted fiefdoms as the Ford Motor Company. And this paralytic intransigence is ingrained in what passes for “culture” at the Dearborn-based automaker. The various overlords of the respective fiefdoms went underground during Alan Mulally’s fruitful tenure as CEO, but they used the time to polish their pitchforks, and as soon as Mulally left the building they emerged fit and ready to resume their counterproductive tendencies. What does that mean? It simply means that the daily operations of the respective fiefdoms are more important to their operatives than the overall direction and well-being of the company. Whether it be purchasing, IT, logistics, et al., the various pieces are always more important than the stated goals of the company. Thus, it was ever so at Ford. Is Farley capable of breaking through the quagmire? Apparently not. And is this likely to change under his watch? No.
2. Colossal, recurring systemic failures having to do with the fundamental process of building vehicles. Designing, engineering, developing and building automobiles is one of the most complicated endeavors on earth. Executives have come and gone in this business, some of whom were adept at moving an organization to fire on all cylinders in the quest to build quality vehicles, and some who were simply incapable of it. There are no “finger snaps” that will solve the complicated issues involved either, because we’re talking about the fundamentals, the blocking and tackling of the business that can make or break a vehicle launch in a heartbeat, and clearly Ford has deep-seated problems with the whole process. Farley has boasted about the efficacy of EVs, and how developing and building them requires different skill sets and capabilities. That’s all well and good, but importing refugees from Silicon Valley hasn’t proved to be the boon Farley insisted it would be. Why? Because the existence of EVs at Ford [[and GM and Stellantis for that matter) is solely dependent on the profits generated by the ICE vehicles in their fleet. And executing complicated manufacturing issues is not a skill set that typically exists in the hallowed digital world. And executing is the name of the game, which is why Ford is consistently mired in mediocrity. Its excruciating dysfunction runs rampant throughout the company. There’s a time-honored mantra at Ford that suggests that whenever a good idea emerges from a supplier – remember, Ford wrote the book on “Not Invented Here” – Ford will take that idea and do it better, cheaper and in less time. The reality is something altogether different. After Ford operatives get their hands on an idea, it will cost twice as much, take twice as long and be not even remotely better. The company has demonstrated time and time again that left to its own devices, it will inevitably deliver less than. Every. Single. Time.
3. A company that is flat-out incapable of delivering first-rate products without devastating, debilitating recalls that butcher the bottom line. Even when Ford does design and develop supposed “can’t-miss” vehicles and actually gets them to production – like the Bronco, for instance – the incidents of basic quality failures with the Bronco as well as across its entire product lineup are stupefying. How bad is it? Farley told analysts last week the following: "Ford has been the number one in recalls in the U.S. for the last two years. Clearly that's not acceptable." Clearly. You could tell that Farley’s “woe is me, we’ve got to do better” tone only went so far with the analysts. There were no details offered as to how things are actually going to get better. Why? Because Farley doesn’t have a clue as to how it’s going to get fixed. Again, we’re talking systemic failures within the company’s bureaucracy that appear and then disappear just as fast, like industrial dust in the wind. Recalls are an unfortunate part of the car business. They’re frustrating and infuriating at the same time, and all companies have to deal with them from time to time. But at Ford, recalls are a cottage industry unto their own. It is so bad that they have to be purposely accounted for – “baked-in” – in the launch budgets because veteran bean counters in Dearborn know that to do otherwise would be a catastrophic mistake.
The Ford Motor Company is in perpetual crisis, and to pretend otherwise is to display a level of naiveté that is simply inexcusable at this juncture. Despite the lavishly orchestrated PR maneuvering surrounding its notable product “hits,” Ford is careening and searching for a clue, just when the company can least afford to be doing so. That the CEO publicly admitted that they screwed up is somewhat refreshing, but only somewhat because, after all, there are no fixes on the horizon, other than that old chestnut: “we’re gonna do better.”
Jim Farley was handpicked by Bill Ford as The Wunderkind who would return Ford to greatness. Now, he's just another 60-year-old auto executive in search of a clue, entering the "let's throw everything and anything against the wall and see what sticks" phase of his reign. Reasoned colleagues in this business have been persistent in their insistence to me that Farley is not only untouchable but irreplaceable. Really? They're being woefully naive. No one in this business is untouchable or irreplaceable. No one. Ford's upcoming involvement in F1 and Farley's penchant for spending wads of ca$h on his vintage racing count for absolutely nothing if the company continues its rumblin'-bumblin'-stumblin' ways.
The Bottom Line? The clock is ticking on Ford's "I'm a genius, just ask me" CEO.
Talk about a giant blue oval of Not Good.
And that’s the High-Octane Truth for this week.
