Ford's Cost-Cutting Spurs Shakeup

Major Staff Changes Come Amid New Financial Losses

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DETROIT (AdAge.com) -- Ford Motor Co. will consolidate sales and marketing for its Ford Division with its Lincoln Mercury arm Aug. 1, according to two executives close to the automaker. In a cost-cutting move, the marketing and sales staff will be aligned by product type and have responsibility for models in that category from all three brands, they said.
Lincoln Mercury's sales and marketing groups were traditionally separate from those of its Ford division, but in a cost-cutting move, Ford Motor Co. will align the staff by product type rather than by brand.
Lincoln Mercury's sales and marketing groups were traditionally separate from those of its Ford division, but in a cost-cutting move, Ford Motor Co. will align the staff by product type rather than by brand.

Ford traditionally had an executive overseeing all three vehicle brands for North America, but maintained separate sales and marketing groups for Ford along with Lincoln Mercury.

Ford did not return calls for comment by press time.

Reassigned managers
On July 29, Ford announced new assignments and positions internally. The key moves, according to the two executives, are: Company veteran Brett Wheatley, who in February was named general marketing manager for Lincoln Mercury, moves to the customer incentives group; and Tom Grill, Lincoln brand manager, moves to the global marketing group under Anne Belec, director of Ford's global marketing. Mr. Grill will be given an inward-looking position tied to Ford's culture globally.

The moves are part of Ford's latest round of cost cutting, announced in June, which called for a 15% reduction in white-collar staff by Aug. 1. Ford last week reported a record global net loss of $8.7 billion in the second quarter; results were dragged down by its auto business in North America, which posted a pre-tax loss of $1.3 billion in the last period, or $1 billion worse than the same period in 2007. The company also said it slashed spending on worldwide auto advertising and sales promotions (excluding incentives) in the period by $200 million to just $100 million.

Among the casualties on the staff was Mark Kaline, the high-profile global media manager of Ford Motor Co., who confirmed he left this week after 11 years. Mr. Kaline, board chairman of ANA's TV Committee, said the staff cuts are the fourth or fifth at Ford in recent years and "none of the separations were performance-related." He said he's "never worked with more dedicated, hard-working people."

Todd Turner, president of consultant CarConcepts, said Ford may as well combine sales and marketing for the three divisions for savings. Handling models from the three brands by vehicle type makes sense, since that's how Ford's product planners are aligned and the setup allows the planners to establish differences by brand.

Waiting for repercussions
Ford's marketing shifts are bound to have an impact on its U.S. ad and media agency, WPP Group's dedicated Team Detroit, Dearborn. The agency should insist on maintaining dedicated brand teams for Ford, Lincoln and Mercury to keep the brands separate and distinct, said a third executive, who formerly worked on Ford's account.

The automaker gave clues the consolidation was in the wings. On July 1, it revealed that Ken Czubay was re-joining the company July 16 as VP-sales and marketing of Ford, Lincoln and Mercury vehicles in the U.S. The company also said John Felice, general marketing manager of Ford Division, would add Lincoln Mercury to his duties and report to Mr. Czubay, 59, who worked for Ford from 1970 to 1983 in various management and executive posts.
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