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Ford Motor Company Faces Tough Times - 2003-01-02


The past two years have been tough times at the Ford Motor Company. Bad publicity from the Firestone tire recall, quality problems, delayed introductions of vehicles, a management shake-up, deepening red ink on company books, the list is long.

VOA asked Ford's Group Vice President for North American Marketing Sales and Service, Jim O'Connor, whether the company's money troubles have been delaying the introduction of new vehicles.

"Well, our focus certainly is to bring the products out on time and with high quality," he said. "In the past, as we've slipped, that has cost us some missed opportunities in the marketplace for bringing out fresh product. And if we've had any quality glitches, that's hurt us in the past. So, clearly, I would say our financial condition has even heightened our passion to execute on time with quality."

With the company struggling to return to profitability in a fiercely competitive marketplace, VOA asked Ford's Jim O'Connor how you turn such a big organization around?

"You want to have your costs low enough to make a profit. We kind of know what the revenue stream is. There's a ton of competition out there," he answered. "The industry is probably going to be around 16.5 million sales in 2003. We know what our (market) share in 'broad band' [general] will be. So you can almost predict your revenue. Now, what you've got to do is really start driving your costs down. And some structural things have to take place: certainly pension costs, certainly health costs have been to all businesses right now, a big increase. And those things we just have to address."

Mr. O'Connor acknowledged that a major challenge for Ford is the need for five U.S. plants to be closed, to bring manufacturing capacity more in line with demand. But, that involves delicate bargaining with the United Auto Workers union, whose members work in those plants.

"We've been very transparent with them, as far as showing them the data," he said. "They know where we stand. It's all based on trust, respect in the relationship. We thought [closing a plant in] Canada would be difficult, and it was. But, because of the trust and respect in relationships that we've had with the UAW, we do hope and we're optimistic that we'll put together a win-win situation for both the UAW and the Ford Motor Company."

Ford will celebrate its 100th anniversary as an automaker in June of 2003. A lot of car companies that began around the time of Henry Ford's early successes no longer exist. Will Ford go the way of Studebaker, Packard and Hudson? In a capitalist system, success is not pre-ordained. There's a lot riding on the next couple of years at Ford.

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