"Free Advice for Ford"

Tuesday's and Wednesday's editions of the Wall Street Journal featured incredibly good pieces about Ford.

The first piece, written by Charlie Hughes (former CEO of Land Rover) and William Jeanes (former editor in chief of Car and Driver), succinctly pares suggestions for Ford's new CEO, Alan Mulally, down to three.

First, they recommend that Mulally's main objective be to make "the Ford brand the most successful brand in the world." Toyota, they believe, is Mulally's "new Airbus." A simple, compelling objective on which to focus the beleaguered firm.

Next, they advocate combining, divesting and eliminating the company's car brands to leave just the three remaining, and then put the full force of the company's efforts behind those brands. The brands they recommend retaining are Ford, Volvo and Jaguar. There is a sense to this, because those three, together, cover a maximal spectrum of customer segments, while being few enough in number to allow each brand to have similar products, but without any real chance of product/market overlap.

Finally, they suggest that Mulally has to create a new culture at Ford, to have any chance of success. They posit, reasonably, that a combination of years of careerist management, with a recent drumbeat of failure, has left the company bereft of much chance of success in its current condition.

I found their article elegantly reasonable, powerful and simple in its messages. Of course, much quantitative work will be required, whatever direction the new CEO takes, in order to have any hope of turning Ford around. But Hughes and Jeanes articulate a nice combination of suggestions which touch on problems involving customer confusion with overlapping and/or unprofitable brands, the company's own cultural malaise, and an objective which is, they write, "noble."

Yesterday, on the heels of that editorial, came Holman Jenkins' very different approach to offering welcoming advice to Alan Mulally. I like it equally well.

Holman focuses on Mulally's isolation at his new employer. Not only does Mulally have no troops with him from Boeing, obviating his ability to dismiss unwanted existing staff, but the "old king" still reigns. Not an enviable position.

Then Holman goes off on a truly inspired track. To those who doubt the viability of a private equity buyout at Ford, he notes that one was just done in the semiconductor sector of similar size. The difference, he notes, is the Ford family's intransigence at acknowledging reality. So long as the Fords insist on control, nobody else will use fresh money to bail them out. A condition for their rescue is to surrender control. After all, who got Ford into this mess in the first place?

The overall impression one gets from Mr. Jenkins' piece, especially its discussion of Ford's labor woes, and Mulally's background, is that Ford's new CEO may have his biggest impact not on the firm's strategy, or operations, but on the structure of the firm going forward. Perhaps privately owned, perhaps with significantly different labor dynamics.

Taken together, I find both pieces extremely candid and reasonable regarding Ford's, and Mulally's, options in the near term. Neither necessarily thinks Ford will survive, or independently and publicly. But they highlight some very valid concerns for the ailing auto maker's new CEO.