The WSJ has run several pieces recently on Ford's new problems.
First, the recent vehicle recalls. Then, the doubling of recent quarterly losses. While not good news, it's probably fair to say these problems involve past events which can only be ameliorated now, rather than prevented.
Finally, we have the hiring of ex-Goldman Sachs investment banker Ken Leet to do what Bill Ford and his staff already get paid to do- evaluate strategic options in the current dire situation.
What's going on here?
Didn't Chairman Bill (Ford) just tell us earlier this year that he and his aides had developed the company's "Way Forward?" What happened to that plan? Is it out the window already?
My mentor at Chase Manhattan Bank, its SVP of Corporate Planning & Development, Gerry Weiss, also a GE veteran from the '50s through '70s, taught that competent management only hires consultants for two reasons: for information to which the consultant is privy, and the company is not, and the consultant can legally and ethically convey to the company, and/or; for special skills, such as negotiation, purchase or sale of unusual assets, etc, that would be of little value to retain on staff, but are required for some current purpose. Beyond that, he said, either the managers under employment are inept, or the consultants are redundant, or, possibly, the reverse. But you can't logically claim to need garden-variety 'evaluation' skills from consultants for your own sector's businesses, when you have deep staffs of employees to do that very task.
Thus, I am very sceptical of Leet's retainer by Ford. If Leet is really necessary, then it suggests that Bill Ford's "Way Forward," and the people who developed it for him, are wrong, and will ruin the company in short order. And it's doubtful that one outside consultant can magically fix the management problems of Ford's entire senior executive group. If Leet is unnecessary, why hire him? Either way, it doesn't say anything good about what shape the company is in.
More than anything, I think it suggests that Bill Ford, and maybe his board, doesn't have any confidence in Ford's own staff. Everything I've read that Leets is supposed to do- undertake strategic evaluations of options for Jaguar, Volvo, Aston Martin and Land Rover, plus Ford Credit- would seem to be well within the purview of the firm's own strategy and planning staffs. Certainly investment banks will be happy to call on the firm with ideas, gratis, on what to do with these units.
Why retain an expensive outsider? Perhaps it's just the latest inept maneuver of a genuinely motivated descendant of a proud family, desperately trying to save the company whose name he shares.
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