Ford Motor Company

1
Ford Motor Company

• Jacqui Deegan
• Chris Corey
• Matt Higgins

2
Ford Motor Co.

• In 1999, Jacques A. Nassar became the new CEO of
  Ford Motor, Co.
• Hailed as the industrys newest auto baron
• Ford was leading its competitors and held a large
  portion of the market.

3
FordWhy Its Worse Than You Think

• A few years after Nassar became CEO, quality and
  safety concerns are surfacing as an issue at
  Ford.
• A year early, Ford incurred the disaster with the
  Explorer and Bridgestone/Firestone Inc. and was
  still feeling severe ramifications.
• The tire scandal is only the most public crisis
  confronting Nassar. Ford is suffering from a
  series of embarrassing quality glitches, costly
  product delays and declining productivity.

4
Problems Ford Faces

• Internal
• Cultural changes
• Extreme overhauling
• Removing automatic promotions and seniority
• Low employee morale
• Transforming Ford from a global auto maker to a
  global company
• Nassar losing support of employees, trust of
  consumers and confidence of Wall Street.

• External
• Slowing economy
• Decreasing market share
• Industrial trends

5
Problems Ford Faces Cont.

• Originally well positioned
• Firestone crisis
• Suspended share buyback
• Lawsuits and lost sales
• Decreasing margins and market share
• Internal quality issues

6
Examples of Fords Poor Quality

• of recalls
• Ford Focus 6
• Ford Escape 5
• Ford Explorer 2
• Ford Mustang Cobra had to cancel entire 2000
  model

7
Qualitys Cost

• Lousy Quality results in
• Sales suffer if car perceived as unsafe
• Higher warranty costs
• Less resale value
• Ford has a huge cost disadvantage compared to
  competitors
• Toyota - 1800/car advantage because of greater
  efficiency

8
Possible Reasons for Poor Operations

• With Ford employees concentrating on adapting to
  Nassers fast paced cultural revolution, more
  errors have occurred
• Employee morale has suffered
• Emphasis on cutting costs caused Ford to lose
  experienced employees due to buyouts
• Open management positions
• filled by outsiders
• Evaluation system

9
What can Ford do to Improve its Operations?

• For Six Sigma to be implemented, time is required
• It is worth it for a product to spend extra time
  in production instead of recalling 53,000 SUVs
• Improve employee morale
• Change new employee
• evaluation system
• Committee to establish
• criteria to be promoted