Q&A: Lataif: Ford dealers were in tough straits
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He left the company in 1991 to become dean of the Boston University School of Management, a post he holds today. He was interviewed by David Versical.
What was it like when you took over at Ford Division?
The losses were pretty dramatic. Dealer morale had sunk pretty low. And the quality reputation was hurting.
But the company truly appreciated what it had done right and wrong. It was an awakening that there were some fundamental issues that needed to be addressed. We had learned a lot of that from our exposure to Mazda. We also realized that success was going to be driven by strong product, not by strong marketing of inferior products.
How did you deal with your dealers?
The dealers were demoralized.
When I became general manager, I made the point that as the new guy on the block I would understand their frame of mind. I tried to convey to them that if I were them, I would be upset with the company.
They were in much tougher straits. Ford would survive, but they might not. They were pleased to hear someone speak to them as they would speak to each other.
Later, we increased the dealer holdback. We liberalized the floorplan financing terms. We improved the commission that dealers got on the A plan and X plan. We did all that we could to put our words into deeds. But we weren't going to do it just by mailing them money; we didn't have any money to send them.
From your academic perspective, what did Ford do right?
Any company in distress has got to do some soul searching about what's in its control and what's not in its control. I think the Ford management really did understand what it had contributed to the problem and what it was going to take to get out of it.
We understood that it was some combination of product design and manufacturing and quality and dealership morale and supplier morale.
Did you ever feel that Ford might not survive?
Never. But part of that was my youth and naivete. Now I see companies like Kmart, and my perspective is different. It was pretty grim. But I never had a moment of doubt. The company at that time was almost 80 years old. How could it fail?
