Ford needs new business model

9/5/06 (Reuters) Ford Motor Co. needs a new business model in order to turn the automaker around, according to a memo addressed to staff by its Chairman and Chief Executive Bill Ford and seen by Reuters.
On Thursday, Ford said it wanted to sell its Aston Martin luxury unit to free up funds to invest in its other brands amid a sharp downturn in sales.
In the memo, dated Friday, September 1 and published by the Detroit News on Saturday, Bill Ford outlined the problems facing the company and his aims to turn it around.
"The business model that sustained us for decades is no longer sufficient to sustain profitability," the memo, shown to Reuters by a representative for the company, said.
"We must change to a new business model that requires greater bottom-line contributions from cars and crossovers, continued leadership in pickups in North America, healthier profits from all other business units, growth in Asia, greater integration of our global operations and an evaluation of strategic alliances."
Crossovers are midway between cars and sports utility vehicles (SUVs). SUVs are large passenger automobiles popular in the U.S.
Bill Ford wrote in the memo that the return to profitability in the company's largest business unit, in North America, was key to its success around the world.
He wrote that since becoming CEO in 2001, the company had aligned product development of Ford, Lincoln and Mercury models "much more closely" with Mazda and Volvo, to improve efficiency and produce "more exciting vehicles," adding he wanted to drive this effort deeper.
Regarding leadership, he wrote that he was now "even more determined to continue to develop leaders inside the company and to attract leaders from outside when we need additional skills to turnaround our business."
Separately, Bill Ford said in a magazine interview he was prepared to let someone else lead the car maker his great-grandfather founded should the right manager be available.
Ford told the September 11 issue of Newsweek in an interview posted on the magazine's Web site: "I'm always looking to bring talent into this company. If I can find somebody -- I thought Carlos (Ghosn) was an exceptionally talented executive who could help the company -- I'll go get him. That is regardless of the position."
Asked if that applied to his own job as well, Ford replied: "Absolutely."
Ford was referring to past efforts to lure Ghosn, who is chief executive of alliance partners Renault (RENA.PA) of France and Nissan Motor Co. Ltd. of Japan, to work for the number-two U.S. car maker, which is struggling to handle losses in North America.
Bill Ford said his top priority was guiding Ford back to profit in North America -- where high fuel prices have crimped demand for Ford's sport utility vehicles and light trucks -- and not to recruit a new CEO.
"I'm not looking to replace myself," he told Newsweek. "I'm looking to make sure the company is stocked with talent. But look, right now I'm focused on getting the North American operations back on track. That's where my energy and time is going. That's my passion."
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