Trickle-Down Despair At Ford

A series of strategy zigzags has left the rank and file edgy about the future

Pull up a stool during lunch hour at Miller's Bar, a modest but popular joint a mile west of Ford Motor Co.'s (F ) boxy "Glass House" headquarters in Dearborn, Mich., and you can hear plenty of frazzled workers worried about the state of the company. A plainly decorated haunt with a dimly lit bar, it's a Dearborn institution where burgers, fries, and onion rings are the only fare and everything is served on wax paper. Forget silverware. "I like the atmosphere in here better than I like work these days," says one 20-year veteran now in Ford sales and service.

These are hard days in "Ford Country," as Dearborn is often called. Market share has fallen four points, to 16%, since 2001, when family scion William C. Ford Jr. took over. The company is worth $14 billion, half what it was then. Things have gotten so bad that Ford has hired an investment banker to look into selling off troubled luxury brands like Jaguar.

These problems are well-known. What outsiders can't detect is the depth of employee despair, much of which stems from internal problems such as managerial churn and constant strategy changes. At Miller's, another senior manager who last April was bused to a conference center on the grounds of the Henry Ford historical museum in nearby Greenfield Village for a presentation about the company's dire health, said he has never felt so downbeat. "The trouble with the auto business is that it takes years to fix what's wrong," says this employee, who, like others, did not wish to be identified for fear of losing his job. "We're four years into fixing it already, and it will be three more years till we see any daylight. Who ever heard of a seven-year turnaround plan?"

Nobody. The prevailing feeling around Dearborn is that CEO Bill Ford would have been fired by now by most boards if his name were Smith. Indeed, there are betting pools on how long Ford will remain CEO, says another Glass House denizen. Seldom looking at ease in the role, Bill Ford admits he struck out trying to recruit DaimlerChrysler (DCX ) Chairman Dieter Zetsche and Renault-Nissan CEO Carlos Ghosn for the job. He's still searching for a replacement. "Bill is pretty serious about finding a CEO," says a source close to him, adding that "the Ford family would be happy to have a new CEO."


Mark Fields, head of Ford's North American auto operations, says he knows it's a tough slog. "Is it tense? Yes." Despite Fields's efforts to inspire the troops, his appointment epitomizes much of what's wrong with the company. He's the fourth head of North American operations in four years. Ford has also had three product development chiefs and four heads of Ford Europe in that time. "The churn of executives has cost Ford valuable time in making headway in the turnaround," says Earl Hesterberg, CEO of mega-dealer Group1 Automotive (GPI ), who left a top marketing job at Ford last year.

That churn has left Ford with models less exciting than those of Toyota (TM ), Chrysler, and General Motors (GM ), just when the original restructuring plan should be yielding fruit. Employees say gallows humor is becoming commonplace. One engineer who has worked for Ford for more than 20 years says it's common to find negative news stories circulated by e-mail, like a recent one headlined "Run, Forrest, Run" (referring to Forrest Gump), as a warning to quit or take a buyout offer before a mass layoff. If you wait for a buyout, the logic goes, you might end up among a bigger wave of workers, trying to sell a house in the already glutted real estate market of Michigan, a state with more than 6.3% unemployment.

At Miller's, two guys sit at the bar eating burgers and talking about the surprising success of the Detroit Tigers. At least that's something to cheer about. The Ford family owns the Detroit Lions, which have had three head coaches in the past five losing seasons. August pre-season camp is under way at the same time Ford is wrangling new restructuring plans it will make public next month. For the Lions, there's always next year. Ford Motor doesn't have that luxury.

By David Kiley and David Welch

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