Recognizing excellence in automotive leadership, the Automotive Industry Executive of the Year Award has a rich history spanning 42 years. This year chairman and CEO of Ford Motor Company William Clay Ford, Jr. was awarded the prize. At the following reception he spoke openly about what the CEOs must do if they want a future for their companies in the automotive industry.
Throughout the 42 years of Automotive Industry Executive of the Year Award’s existence, it has given recognition to individuals who embody the innovative thinking necessary to lead the automotive industry where it needs to go and the courage to say so when the industry needs a new direction. Since 2005 DNV has sponsored this award, where past winners include names such as Dieter Zetsche, Rick Wagoner, Jac Nasser, Robert Eaton, Thomas Stallkamp, Roger Smith, Lee Iacocca, Bob Lund and Henry Ford II.
Bill Ford accepted the award at a reception in Detroit this spring in front of 225 of the industry’s leading chairmen, CEOs and presidents. A number of the invited guests represented Ford’s own supply chain, and they got to experience something or rather someone out of the ordinary.
All the titans
Instead of the customary monologue, Bill Ford made his remarks short and quickly placed himself in the hot seat, opening up for questions from the audience. But in his remarks, Bill Ford opened by noting how humbled he was to join the list of past winners “who are virtually all the titans in our industry.” One of the titans, Henry Ford II, was his uncle.
He continued to address the current global automotive climate and spoke openly about what the CEOs in the room must do if they want a future for their companies in the automotive industry.
“Great opportunities exist for companies who are willing to change quickly,” Bill Ford said. “But we have to be willing to do it at a fundamental level. Incremental improvements are not enough anymore. In a word, we need to capture innovation. Cost cuts alone are not going to lead us to victory.”
Bill Ford said that while Ford Motor Company made about $1 billion last year in its global operations, the North American business needed a lot of attention. The most important strategy he will use to return his company to profitability in North America? “We’re getting honesty on the table,” he said. “That means honesty about our competitive position, the strength or lack thereof of our products, and the robustness or lack thereof of our processes.”
“We must be brutally honest,” he told the audience. “Where do we have vulnerabilities? And how do we go about fixing it? This process is quite energizing to people. One thing I’ve said is I can deal with anything – except the lack of truth. If I don’t get good input, I can guarantee you I’m going to make a lousy decision.”
Driving environmental concern
Bill Ford said that continual assessment in several key areas is also crucial to Ford Motor Company. “In 1998 Ford became the first automaker to get ISO 14001 certification in all our facilities around the world,” he pointed out, “and we’ve enjoyed big cost savings from this. I’m proud to say that all our Q1 suppliers around the world have also achieved ISO 14001 certification and have seen similar bottom-line benefits.”
Building automobiles in an environmentally friendly way has long been a priority for Bill Ford. “I always felt that if I was ever in a position to do something about making automotive manufacturing better for the environment, I would. Today, our Ford Rouge Plant in Dearborn, Michigan is a model of our efforts in this area, and I think it will become the standard for automotive manufacturing in the near future.”
Improving human working conditions
Another area where Bill Ford looks to assessments for feedback is in human working conditions. In 2003, Ford Motor Company adopted a code of Basic Working Conditions for all its employees worldwide. The code is aligned with international standards and includes training and third-party assessments. Bill Ford said he believes it’s “the farthest-reaching code in the automotive industry.” Last year, Ford Motor Company extended the code to all its suppliers as part of contract conditions. Bill Ford said suppliers have shown strong support for the programme.
“We’re holding our suppliers accountable to a human rights standard and assessing them on it the same way we assess for quality standards,” he said.
In the Hot Seat
During the question and answer session, Bill Ford was asked about a range of topics – from how he plans to battle rising health care costs to building a winning corporate culture to publicly admitting his favorite Ford automobile. Invited media were most interested in the question of bankruptcy. When asked if bankruptcy was inevitable for his company, he answered: “Bankruptcy is not an option. We have tremendous liquidity. We made money last year, and I think it was Yogi Berra who said, ‘Nobody ever went broke making a profit.’ We’re acutely aware of the state of our industry, and we’re working very hard on the fundamentals of our business to restore Ford Motor Company’s North American operations to profitability. If you look at Ford Motor Company, our businesses around the world look pretty good. We’ve got one big problem and that’s the U.S. auto market – and we’re going to fix that.”
In concluding his comments, Bill Ford said, “We’re in a fight with companies that have different legacy costs, different levels of government support and different cost structures. But we can’t worry about that. We have to attack our own problems.”
Text: Carla KalogeridisDate: 25 August 2006