Built Ford Tough
Mary J Merrill
Built Ford Tough
The catch phrase of Ford Motor Company, “Built Ford Tough,” was coined to draw attention to the sturdiness of the Ford truck line. It has also been used to describe Ford’s tough leaders and their ability and desire to keep changing to accommodate the wants and needs of their stakeholders and their clientele. Environmental, along with economic changes, continue to transform the ways Americans conduct business around the world. In order to be successful, a company must recognize its obstacles and set a realistic path toward their goals. Ford Motor Company, as an American manufacturer of automobiles and automotive parts and accessories, has faced many challenges since its incorporation that have required decisive management and capable leadership. It is with these skills and eagerness for change that Ford Motor Company is taking on challenges such as fuel efficiency, environment protection, affordability, and longevity. Through the appointment of qualified managers and leaders, Ford Motor Company is progressing past its periods of previous lows and is now poised for a brighter economic future.
Founded in 1903, Ford Motor Company led the world into a new age by automotive and industrial pioneer Henry Ford from Dearborn, Michigan. Henry Ford is no stranger to the concept that it often takes time to see success. It took 20 years of experimentation before he saw a breakthrough in 1908 with the introduction of the “Tin Lizzy,” which is more commonly known as the Model T. As of 2008, 100 years after Ford Motor Company's Model T changed the world by making personal transportation affordable; the Tin Lizzie is still regarded as a major influence in human history” (Ford Motor Company, 2011). Being first to implement a moving assembly line for automotive manufacturing, Ford was able to mass-produce their products more efficiently than their competitors were. In many ways, all automotive companies that have followed Ford have modeled themselves after the Ford Motor Company.
In the first half of the 20th Century, the U.S.A. was the global leader in the automotive industry with Ford in the lead. However, Ford occupies a different position today. Ford Motor Company is now a member of the automotive and transportation industry, which is a worldwide industry. The production of motor vehicles has changed over the past half a century. The United States automotive industry has become reliant and interrelated with the international economy. Many cars produced in the United States in prior years are now built off shore by domestic internationals such as Toyota, who ironically produce more of its cars sold in the United States than in Japan. The U.S. Department of Labor reports:
Collaboration in manufacturing practices has dramatically increased productivity and improved efficiency. The cooperative practices also have resulted in manufacturers from the United States, Europe, and the Pacific Rim working closely with parts suppliers and location production plants in the countries in which they plan to sell their vehicles in order to reduce distribution time and costs (USDOL, Bureau of Statistics).
Organizational change is disruptive by nature and involves the uprooting of old norms that have enabled a company to succeed or at least survive. In order for the change to succeed, management and staff must voluntarily disrupt their comfortably established work habits and consent to move into the unknown. Effective communication with staff regarding change is essential to Ford’s success, given current triggers such as volatile swings in national and international economies, new competitive environments, shifting customer expectations, increasing pressure from financial markets, emerging governmental regulation and deregulation, not to mention dramatic and unexpected geopolitical dynamics.
Ford has opened up to not only the public via electronic media, but to its stakeholders as well. Ford Motor Company recognizes that it is the combination of its team members that will succeed or fail. Regardless, Ford has no intention of failing. In Dearborn, Mich., July 15, 2010, Ford Motor Company announced key executive appointments to further sharpen its senior leadership team’s focus on the “One Ford” plan and to support the company’s growth around the world. (Ford, 2011)
For the past ten to fifteen years, Ford Motor Company was not the place to be if one was a freethinking entrepreneur. Ford has opened itself back up to step into the future in order to bring back a focus and concentration on what they do best: make good automobiles.
Ford Motor Company is the only American automobile company that did not ask for or receive bailout money from the government. Ford stands firm on their ability to evaluate and adjust in these changing times. In a news release, Ford declared that “On Wednesday November 29, 2006, Ford Motor company announced that 38,000 of its blue collar staff have agreed to accept buy outs, over half of its factory worker(Ford, 2011) This is an example of open communication with their team members. Making employees a part of the decision process and giving them an option—to accept a buy-out of their existing contracts or to continue with Ford in its restructuring. Many of those that continued did so with temporary pay-cuts and or loss of benefits. When employees are involved in the change process, however, there is less resistance and more motivation toward reaching the goals of the organization. Involving the employees was only the beginning of the necessary steps taken during the restructuring of the Ford Motor Company.
Ford Motor Company’s Executive Chairman stated, “Creating a strong business and building a better world are not conflicting goals. They are both essential ingredients for long-term success” (2010). Gone is the era of massive employee bases. This type of environment has been replaced with a sleeker, more innovative staff that can move into the future with open minds and innovative products. Ford has accomplished this in part with its decision to decrease short-term expenditures such as huge inventory warehouses to Just-In-Time (JIT) Manufacturing and Inventory Reduction. Ford Motor Company has named new leaders in most of their corporate headquarters around the world. Leadership, according to our text starts by identifying and articulating organizational purpose (Spector, 2010).
Another issue was Ford’s dependability. Ford has been ranked 4th through 6th place in dependability according to J.D. Powers over the past 15 years. That is until this year.
According to the 2011 J.D. Power and Associates 2011 U.S. Vehicle Dependability Study (VDS):
There is a new top dog in vehicle dependability. For the first time since the study began, Ford Motor Company's Lincoln led all the nameplates in dependability. Lexus finished second, followed by (in order) Jaguar, Porsche and Toyota.” Ford Motor Company is coming back and with a new and impressive strength (2011).
Not only has Ford taken huge leaps in its strategic renewal, they have also launched a full-fledged Change Program adopted by its managers to better address issues and to enhance the reputation of the Ford name. Spector believes:
Strategic responsiveness to a dynamic environment requires organizational change. Change, however, is not a singular concept. The three faces of change suggest that change leaders face options. Turnaround ad-dresses the need to improve the balance sheet and technology focuses on improved processes. By itself, however, neither will achieve the full, intended impact of strategic renewal. Effective change will also require attention to employee behaviors (2010).
This is exactly what the Ford Motor Company is doing. Ford is everywhere now. They are a sponsor of one of Americas top television shows, American Idol. According to Americanidol.com, American Idol has been ranked No. 1 among Adults 18-49 for the past seven consecutive seasons and currently ranks as the No. 1 television show of the 2010-11 season. American Idol has on average of 55 million viewers each week. (americanidol.com, 2011) With Ford’s autos being portrayed as fun, affordable, and dependable vehicles week after week, it is having a significant contribution to putting them back on top.
Ford has been following Toyota for over a decade and trying to use the ideas and concepts that seemed to be working for Toyota. The problem with this approach is that they are not Toyota; they are Ford. Now that Ford has decided to go forward instead of backward, Ford again can take the appropriate steps to being the best automaker in the world. Toyota has had its recent share of unfortunate situations from recalls due to faulty mechanisms to the setback of production due to the horrible earthquake earlier this year. Even though the earthquake was a natural disaster, all of these events combined are making a difference on how consumers view their products. If they were hoping to scoop up some of the wavering Toyota customers now would be the time. In order to keep them they will have to continue to live up their own reputation.
As stated in the text, “Organizational redesign is the process of changing an organization’s design in response to shifting dynamics in the organization’s environment.” (Spector, 2010) This redesign form of organizational change is eminent in all industries. Right now with the price of gasoline skyrocketing, one of the biggest challenges for Ford has been to capture the market of buyers who want eco-friendly, fuel-efficient vehicles. Ford Motor Company has always been on the cutting edge of innovation all the while taking care of employees with such groundbreaking moves, such as in 1914 when it started an industrial revolution by more than doubling wages to $5 a day. They did this to help build the U.S. middle class and the modern economy. Now Ford is creating the future of electric vehicles with its development of plug-in hybrid and all-electric vehicles. When introduced, they promise to be the state of the art in electric vehicle technology. Ford has set the bar very high. In addition, they claim that customers can be confident that these innovative new electric vehicles will live up to that high standard (Ford, 2011). Not only is Ford looking forward to the future with its hybrids, but also in the materials it uses both in and outside the vehicles. Ford is using recycled cottons in the interior of the new 2012 Focus as part of carpet backing and sound absorption material. Cotton from post-consumer recycled blue jeans is an example of the material used in the new Focus as part of the drive to find creative eco-friendly materials. “The use of environmentally friendly materials is part of the company’s commitment to “reduce, reuse, and recycle” (Ford, 2011). By using recycled materials and other eco-friendly approaches, Ford is capturing a huge segment of the population that it did not have in past years.
Ford Motor Company is also going after its competitors with a new program called “swap your ride.” Matt VanDyke, Ford’s director of U.S. Marketing Communications, asserts that challenging people’s perceptions head on is the best way to change their minds about the Ford brand (2011). What the campaign does is take a customer’s vehicle that is any other maker other than Ford. It then replaces or swaps that vehicle for a comparable Ford model for one week. The ads show real consumers and their honest reactions to their car swap experience. Seeing a real person giving a great review of Ford and their various models is having a strong impact. The ads have been running for about a year now and with great success.
Ford Motor Company did not have to change many things when it came to employee support and motivation, but they did initiate diagnostic interviews and behavioral observations. This was done to ensure they were doing all they could to make working at Ford Motor Company a positive experience. One of the latest improvements to come to Ford factories is the “Happy Seat.” To address issues such as an ageing workforce and the physical tolls of long-term working on the line, Ford convened a team from many diverse backgrounds such as occupational physicians, production specialists, labor groups, and representatives for disabled employees to improve ergonomics, safety, and productivity. The ideas compiled from this team eventually led to the creation of the “Happy Seat.” It is an ingenious swivel chair attached to a rod-shaped suspension. It enables workers to sit in comfort on the production line while assembling cars. The seat allows workers to sit and glide into the car on the assembly line instead of having to get on their knees or other precarious positions. The seat proved to be a great motivator for employees who dreaded going to work in the past, but did so for the paycheck. There has been a huge decrease in sick time claims Ford, and we attribute it directly to “Happy Seat.”
Other ways that Ford Motor is helping attract and retain quality employees is by allowing employees, especially lower- level employees, to participate in making decisions, scheduling and designing work, and ensuring quality. They want their employees to know that they are a vital element in the company. The employee at Ford Motor Company has a sense of empowerment. This again is a great motivator. “Our employees are our most valuable asset and are the driving force behind our success. That is why it is so important to us that our programs and employment practices recognize the diverse needs of all our employees, your family and your community” (Ford, 2011). The benefits package for Ford employees is extensive, including such incentives as medical, dental and vision, and health insurance. Paid time off, flexible work programs, savings and stock plans (401K), Ford retirement plan, generous discounts on vehicle purchases as well as community and recreation programs are also included.
Ford Motor Company, through its implementation of organizational change, has again become a leader in today’s automotive market. They used diagnostic analysis to look at their current situation. They looked at the external triggers that were placing a demand for change on the organization seriously. They created a plan to address most if not all of those triggers with a positive change--not only on the organization and its stakeholders, but also on the world. These external triggers also spurred internal triggers, causing leadership changes that have helped to make Ford Motor Company one of the top 500 best companies to work for.
What started as a vision of one man over 100 years ago, Ford Motor Company has developed from an the dreams of innovator with breakthrough technology in the early days, that consequently changed lives forever. Ford then experienced years of struggling to make a profit in the recent past. To where they are today, experience large net profits of over a billion in the first quarter of 2011. Without proper organizational design and the willingness to incorporate constant organization change, they would have been out of business.
It takes more than a good idea for a business to be successful. It takes leaders and stakeholders that are open-minded and capable of changing the direction of the products of the organization. Ford knows that it takes the entire staff to be successful. Even though the changes that can be seen in Ford Motor Company seem rather sudden, they started this process several years ago. Most of the significant changes are now visible and can be seen in the products and services that make up the Ford Motor Company.
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American Idol. (2011). About the show. Retrieved from http://www.americanidol.com/about/.