FORD TV AD EXPLAINS MASSIVE FACTORY CUTBACKS

Ford Chief Calls14 Plant Closings and 30,000 Job Cuts 'Painful Sacrifices'

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DETROIT (AdAge.com) -- Ford Motor Co. Chairman-CEO Bill Ford Jr., who yesterday outlined what he called the “painful sacrifices” of 14 plant closings and up to 30,000 layoffs in North America “to protect Ford’s heritage and secure our future,” reiterates some of the company’s difficulties in a TV commercial breaking tonight.
Photo: AP
Ford Motor Co.'s exec VP for the Americas, Mark Fields (left), and Chairman-CEO Bill Ford Jr. discuss the massive closings.
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Titled “Rebirth,” the commercial is the latest in an innovation-themed campaign that started last fall that features the great-grandson of company founder Henry Ford. In the spot, Mr. Ford speaks of the automaker’s commitment to “retake the American roadway.”

The new spot was created by WPP Group’s Ogilvy & Mather, Dearborn, Mich., and Penn Schoen & Berland, Washington.

'Tough but necessary steps'
“Ford's strengths were built over 100 years, and we are taking the tough but necessary steps to address our issues with candor, speed and compassion for the people affected by our work force reductions,” Mr. Ford said in announcing the restructuring. “This next chapter in Ford’s history will be remembered for our renewed commitment to innovation and as the time we moved boldly to prepare Ford’s North American business to face global competition.”

As part of its “Way Forward” restructuring plan addressed in the ads, the marketer reduced the number of North American corporate executives overseeing sales and marketing to three from four. Steve Lyons, 57, will retire as expected March 1 as group VP-marketing, sales and service in North America, ending a 33-year career at the automaker. He’ll become a Ford dealer in Arizona.

Cisco Codina, 54, who had been corporate VP-president of the Ford Customer Service Division, will succeed Mr. Lyons. Darryl B. Hazel, 57, moves to senior VP-president, Ford Customer Service Division, from VP-marketing and retail management of the Ford, Lincoln and Mercury brands in North America. Al Giombetti, 49, VP-sales of Ford, Lincoln and Mercury, becomes VP-president of Ford, Lincoln and Mercury marketing and sales in April.

Focus on customer, not factories
The “Way Forward” aims to sharpen the company’s focus on customers. “True customer focus means that our business decisions originate from our knowledge of what the customer wants, both today and tomorrow,” said Mr. Ford, noting that for too long Ford’s product plans were “defined by our capacity,” and the automaker developed vehicles to fill plants “sometimes at the expense of creativity.” That’s why, he said, Ford must reduce plant capacity in North America with products now designed and built to satisfy the customer, not just to fill a factory.

As part of the program, masterminded mainly by Mark Fields, exec VP-president, The Americas, the automaker hopes to create what it calls “more clarity for the Ford, Lincoln and Mercury brands,” to commit more to design and new products and to communicate “straightforward pricing that is clear, credible and simple.”

“With more focused brands, new product investment and innovation, Ford will slow the rate of loss and then stabilize our U.S. market share in the near term, even as competitors add new models,” Mr. Fields said. “From there, we can set our sights on the future.”

The automaker’s 2005 results released yesterday showed full-year global income of $2 billion compared with $3.5 billion the prior year. Calendar 2005 sales and revenue was $178.1 billion, up marginally from $171.7 billion in 2004.

North American headache
North America continues to be a huge headache. Ford said its auto operations in the region reported a pre-tax loss of $1.6 billion, marking a decline of $3 billion from 2004. Ford’s fourth quarter North American auto arm’s results in 2005 improved to a pre-tax loss of $143 million on sales of $22.1 billion compared to a pre-tax loss of $470 million on sales of $21.1 billion in the final quarter of 2004.

“Americans really do want to buy American brands, as long as they are competitive with the imports,” Mr. Fields said. “The challenge going forward is to give our customers, employees, retirees, dealers, suppliers and investors a reason to believe in Ford.”

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