Ford to Farley: Here's $5 Billion. Stop This Ship From Sinking!

Automaker, Which Has Seen Sales Plummet 13.3%, Hands Giant Budget to 'Immense Talent' From Toyota

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Jim Farley is the $5.1 billion man.

The Toyota executive last week tapped to become Ford Motor Co.'s group VP-marketing and communications has a much bigger job than the title might indicate.
Starting next month, Jim Farley will be Ford Motor Co.'s group VP-marketing and communications.
Starting next month, Jim Farley will be Ford Motor Co.'s group VP-marketing and communications.

When the former group VP-general manager of Lexus arrives next month, the company said, he'll be "working with the company's worldwide-business-unit leaders and global-product-development organization" in areas that include brand development and product planning. He'll be "a significant voice" in product planning, marketing, public relations and communications Ford CEO Alan Mulally told Advertising Age.

The whole pie
Oh, and he'll direct Ford's $5.1 billion global advertising budget -- some 3.2% of the automaker's global revenue, according to Ford's 2006 annual report. Mr. Mullaly said that all the marketing and communications around the world will report to Mr. Farley, 45, who will lead global budgets in those areas, with the dollars then allocated regionally.

The money -- and Mr. Farley -- will have to work hard for Ford, which has fallen to the No. 3 position in the U.S. auto industry. According to Automotive News figures, Toyota sold 2 million units in the first nine months of the year, up 3.8%, compared with Ford's 1.97 million, down 13.3%.

Doug Scott, VP of consultant GfK Automotive, said Mr. Farley's biggest challenge at Ford will be shifting gears from a carmaker with exceptionally strong brands and accelerating sales to a company "that has commoditized" vehicles and decelerating sales.

Kevin Tynan, an auto analyst at Argus Research, wonders how much influence Mr. Farley will have in product planning. "There's a lot of fingers in that pie -- engineers, designers and bean counters -- and everyone has their own agenda." A successful business model for any automaker starts with the product "more so than changing the messaging," he said.

David Murphy, who worked with Mr. Farley while heading Toyota's shop, Saatchi & Saatchi, Los Angeles, called his former client "an immense talent." He expects Mr. Farley to "shake up the marketing culture" at both Ford and its lead ad agencies at WPP Group. Mr. Murphy, now co-president of independent shop Barrie, D'Rosario, Murphy, Minneapolis, said Mr. Farley "compels people [at the ad agencies] to think deeper and think bigger. He has little tolerance for what we did last year."

Mr. Mulally, who has advocated a return to ads themed "Have you driven a Ford lately?" said he decided to wait for Mr. Farley's arrival for his input.

Industry observers wonder how Mr. Farley's appointment will impact Mark Fields, exec VP of the Americas, and Charlie Holleran, VP-chief communications officer. Mr. Fields continues to report to the CEO, but Mr. Holleran, who has kept a low profile since arriving as Ford's global PR chief in 2004 from Computer Associates International, will now report to Mr. Farley.

Mr. Mulally said Ford is transforming from a large SUV and truck marketer to one focused on small and medium vehicle segments. "We're going to be fine, and we've got great talent to do it."

In fact, John Casesa, managing partner at Casesa Shapiro, said Mr. Farley's hire opens the floodgates for more. "This is a very symbolic development -- to have someone of that caliber leap from Toyota to Ford," he said. "Until now, people wouldn't leave Japanese car companies to come to Detroit because it was thought of as a sinking ship. This sends a huge signal, a very bullish signal about the revival of the domestic auto industry."

What the auto industry is saying about Jim Farley

Steve Sturm, group VP-strategic research, planning and corporate communications, Toyota Motor North America:

"Jim did a great job for Toyota and Lexus. He did a great job everywhere he worked. He's a great marketer and a great product guy. He's the guy who really put Scion on the map and with his team put Scion's vision together and made it a reality. He also did a great job with the new Tundra launch. "

David Murphy, Barrie, D'Rosario, Murphy, Minneapolis, co-president:

"I was stunned at the news. They certainly hired an immense talent. Jim represents a big loss to Toyota short term, but Toyota will be fine. Reporting to the CEO [at Ford] gives him the mandate and space to succeed."

Wes Brown, VP Iceology:

"This is a massive coup for Ford, to bring in an up-and-coming star from Toyota, a very successful company that has done lots of things right."
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