DETROIT — Ford Motor Co. says it has a plan under CEO Jim Hackett to improve the automaker's profitability and competitiveness. But Ford has had a tough time getting others to understand and gain confidence in the early stages of Hackett's companywide restructuring.
Investors pushed shares of the company below $9 last week to their lowest closing price since 2009, when most of the company's assets were in hock and the industry was only starting to recover from the recession. Dealers hope to finally hear more concrete details at a meeting this week that will be Hackett's first time addressing the company's broad retail network in person.
"There's been a lot less exposure to senior management," said Jack Madden, owner of Jack Madden Ford in Norwood, Mass. "There's just not enough information flowing down to dealers about where the company's headed."
Meanwhile, more turmoil is creeping into the company's ranks after Hackett told Ford's 70,000 salaried workers around the world that the $11 billion restructuring will include job cuts, while giving no specifics on numbers and only a vague idea of how or when. Ford is calling changes to its employment structure an "organizational redesign" and says it could take months to complete.
Hackett is no stranger to layoffs — he axed thousands of employees at his former company, Steelcase, including the best man from his wedding — but stretching out the process, instead of announcing the cuts all at once, threatens to sink morale and create an uneasy, disillusioned work force, experts say.
"The approach they've taken can create a lot of anxiety and stress for their employees, particularly heading into the holiday season," Chris Zatzick, an associate professor of management and organization studies at Simon Fraser University in British Columbia, told Automotive News. "To have that uncertainty and not know what's going to happen in the new year can be quite impactful and can potentially lead to employees looking for other jobs or withholding effort."
Ford argues the approach gives managers throughout the company more power to shape their departments, flatten command chains and cut out bureaucracy. They wanted to get ahead of potential rumors that would arise when workers would see their team leaders pulled into meetings — which they call "design sessions" — with higher-ups.
"It's really about redesigning the business," Ford spokeswoman Karen Hampton told Automotive News this month. "An outcome of that is that there's likely to be reductions. The real purpose is to change the way we work."
Paring back its salaried ranks is the latest shake-up under Hackett, who replaced Mark Fields in May 2017.
Hackett seeks to drastically change the way the 115-year-old automaker is run, developing new vehicle architectures, redesigning its product lineups and shortening its order-to-delivery process. Its North American product team, for example, has taken over the 11th floor of Ford headquarters for weekly, daylong meetings examining the profitability of each nameplate one by one.
And last week, Ford announced a seismic shift to its advertising strategy, saying that BBDO would replace WPP as its lead creative agency. WPP, which has worked with the automaker since Henry Ford was president 75 years ago, will retain some work as part of a new multiagency model.
None of the moves have impressed Wall Street. Investors have raised concern over Ford's financial outlook since the automaker in July cut its full-year profit forecast and canceled an annual investor day because it didn't have enough details to share.