It is encouraging that Ford Motor Co. CEO Bill Ford recognizes that the 6-month-old Way Forward revitalization isn't working and that Mark Fields and his team have intensified their efforts to cut costs and accelerate product development. It's time for Ford Motor to take a more drastic approach to both.
As the second-quarter operating profits reported by General Motors show, the right measure of cutting costs and boosting revenue can do wonders for a sagging profit and loss statement. GM has an aggressive plan to cut structural costs by $6 billion this year and seems well on the way to achieving it.
The problems with the past two Ford campaigns -- the Way Forward, launched in January 2006, and the revitalization plan that began in January 2002 -- were that they didn't cut fast enough to reduce costs or develop enough new products to raise revenue.
Fields should go back to the playbook the company used in the 1980s. Ford Motor's U.S. market share sank from 25.5 percent in 1978 to just 19.7 percent in 1981. From 1980 through 1982, it lost $3.2 billion. Management acted forcefully.
Behind CEO Philip Caldwell, the company closed nine parts and assembly plants and set product development on a radical course that gave birth to the Ford Taurus sedan and the Ford Explorer SUV.
The result: windfall profits by the end of the decade.
The situation today is no less desperate than the one in the early 1980s. Now, the company must use the Caldwell example.
For Ford, there can be no more Mr. Nice Guy.