Tuesday, October 25, 2005

Slumping Ford picks employee brains

Ideas for turning around North American operations flood in to management, which will weigh them all.

By Bryce G. Hoffman / The Detroit News

Division president Mark Fields encouraged input. Chairman, CEO Bill Ford Jr.: "It is a cultural change." Comment on this story Send this story to a friend Get Home Delivery

Ford Motor Co. is turning to employees for ideas and insights to help guide a major turnaround of the company's North American operations.

Salaried employees in Ford's Americas division received an e-mail Friday from division president Mark Fields and his management team, encouraging them to share suggestions with senior management.

Ford Chairman and CEO Bill Ford Jr. plans to unveil a major restructuring in January to reverse mounting losses.

"The response is strong," Ford spokesman Oscar Suris said. He said replies are going directly to Fields and his team, which is reviewing each response. Suris would not comment on specific suggestions.

After posting its first quarterly loss since 2003 last week, Ford is accelerating a restructuring that will include plant closings, job cuts and a reduction in hourly employee health care benefits.

Ford is struggling with a slump in SUV demand, increasingly fierce foreign competition, rising raw materials prices and out-of-control health care costs.

The company lost $284 million in the third quarter worldwide. In North America, where Ford's market share has fallen from more than 26 percent in 1995 to less than 18 percent today, the automaker had a third-quarter pretax loss of $1.2 billion.

Bill Ford called on employees in September to step forward with good ideas, saying the company needed to reinvigorate the spirit of innovation that drove its successes in the last century.

Addressing his challenge to Ford workers during a conference call with analysts and reporters last week, Bill Ford said employees took that invitation seriously.

"I've been flooded with e-mails from employees with ideas -- and not just product innovation: everything from plant ideas to saving money, ideas to reach the customer," Ford said in the conference call. "There is a lot of pent-up demand, apparently."

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said the automaker's bureaucracy had not exactly encouraged employees to come forward -- an attitude he believes has led to many missed opportunities.

"They have good ideas," Cole said of Ford employees. "Historically, they just didn't feel like they could get them through the system."

Cole praised Bill Ford's efforts to re-stoke the fires of innovation at the company. However, it is too soon to tell whether this really represents a fundamental change in Ford's corporate culture or just another marketing slogan.

"He has to unleash that creative, entrepreneurial spirit throughout the company," Cole said.

Bill Ford said the change is a real one. He said his staff is examining each of the messages received from workers, vetting the ideas and working to ensure that they find their way to the appropriate department.

Ford said senior management is also trying to set a tone of receptivity so that good ideas are given due consideration by managers at all levels of the company.

"This is not something that's the flavor of the quarter. This is a commitment I think for many years, and it is a cultural change," Ford said. "It will be a gradual thing. I don't think there is going to be an 'a-ha!' moment."

Ford is not the only automotive company to tap its own employees for insights.

Toyota Motor Co. gives employees at all levels of the company cash bonuses for ideas that improve operations.

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@ detnews.com.