Layoffs and plant closings won't save the No. 2 automaker.

I guess it's better not to assume that everyone in the world has the same taste in automobiles and has the same needs, but on the otherhand it's smart to share components that no one can see.

from www.cnnfn.com


Ford's fight for survival

Layoffs and plant closings won't save the No. 2 automaker.

Here's what analysts are looking for.

By Alex Taylor III, FORTUNE senior editor
January 20, 2006: 10:27 AM EST


NEW YORK (FORTUNE) - When Ford Motor announces its North American restructuring plan on Monday, the headlines will be about the number of plants closed -- as many as ten -- and the number of people who will lose their jobs -- up to 30,000 over the next five years -- if published reports are correct.

But the layoffs and the plant closings are just the beginning of a needed overhaul at Ford.

To begin with, those cuts are merely a reflection of a reality that already exists. Ford needed to get smaller yesterday. It has been losing market share for ten years, and sales of some of its most popular vehicles from the past like Taurus and Explorer have slumped so alarmingly they will probably never recover.

Analysts and others will try to peek below the surface to see what else the automaker is doing to stem the need for more downsizing in the future. Here's one effort already underway that has gone unnoticed: Ford is making significant changes in its global organization and product engineering that should make new model development far more efficient and economical.

What's happened is that Ford has almost completely reversed the shifts made in the radical reorganization a decade ago called "Ford 2000." The brainchild of former chairman and CEO Alex Trotman, Ford 2000 attempted to adjust to the increasing globalization of the auto business by eliminating regional organizations in Europe, Asia and South America and replacing them with five vehicle centers. Each of the five centers would be charged with developing a single class of vehicles -- large rear-drive sedans, small front-drive econoboxes -- and marketing them around the world.

Ford 2000 looked good on paper but really messed things up. A lot of local market knowledge disappeared with the elimination of the regional organizations, and lots of experienced managers went out the door too. Then, under Trotman's successor, Jac Nasser, the vehicle centers stopped sharing common components like air conditioners and shock absorbers and began developing their own, causing an explosion in costs.

Now Ford has recentralized product development and engineering to enforce an economical sharing of platforms and components across product lines. So engineering for a new small car platform known as C1 will serve as the underpinnings for cars marketed by Ford, Volvo and Mazda.

Observers will also be watching for signs of increasing responsibility being handed to 44-year-old Mark Fields. Fields, whose French-cuff shirts and doo-wop haircut set him apart from the company's other executives, was given the keys to North America just four months ago after stints in Europe and Japan.

Yet Chairman and CEO Bill Ford has left him virtual carte blanche to devise the North American turnaround plan despite his lack of experience. Jim Padilla, Ford's ostensible number two executive and the man to whom Fields reports, has stayed out of the way, too.

Whatever else he is good at, Fields has proved himself a gifted phrase maker. His turnaround plan has been dubbed the "Way Forward," and Fields describes the company's new car philosophy as "red, white and bold."

"Bold" certainly couldn't be said about Ford's vehicles in the past. Despite internal complaints that its new models were boring and looked too much like their predecessors, everything coming out of Dearborn looked like it had been warmed over, not redesigned. The 2005 Ford Five Hundred was so nondescript that it almost vanished from sight, while the 2006 Ford Explorer looks almost identical to the older model it replaces.

Finally, observers will be looking hardest for some sense of plan, direction and persistence from Chairman and CEO Bill Ford. The company has seemed almost rudderless over the past five years with numerous management changes -- Field's job seems to turn over on an annual basis -- and a sense that even lumbering old General Motors was moving more smartly and aggressively in the marketplace.

Earlier in January, Bill Ford declared that it was time for Ford to stabilize its market share after its long decline. Monday will be the first chance for him to demonstrate that he actually means it.

It's sooo easy for us all to armchair QB these companies like Ford and GM, but the real truth is that it is a very touchy and sensitive thing to do. Wrong calls can cost Billion$ - with a B. It's risky, and there are not many 2nd chances at getting things right.

The one thing I will most staunchly agree will help both Ford and GM get out of their financial conditions is better product - period. If one car company offered the 2006 Z06, C6, Mustang GT, GT500, 300C, Charger, Cobalt, Fusion, Tahoe, Explorer, Escape, CTS, and Focus... there would be no competition - it would be like a Wal-Mart of auto suppliers that would kill opposition at will because they control so much of the sales market.

If Ford and GM will simply put out more "gotta-have" vehicles, the money will come back. Then, they have the chance to earn loyalty from the market by making those vehicles dependable, durable, and reliable along with good customer service. Hence, the return customer.

If the decision for the customer is bland with good quality versus bland with a shady past.... we all know which appliance the customer will choose.
I just hope we see some more risky, head-turning, insirational designs from Detroit and Dearborn in the next few years. DCX seems to have found that out already.

Funny to think that about five years ago, many analysts were saying that Ford was doing so well that it was poised to overtake GM as the world's top automaker.

It's scary how fast things can change.

Automakers need to realize the the "BOLD" designs don't sell cars, but attactive ones do. In reality the Aztek was BOLD but it was ugly and it didn't sell and thats true for alot of things.


BOLD is a nice double-speak PR term that makes it sound like you are saying something when you are really not. If they actually came out and said they need to design attractive cars they would be inadvertantly admitting that their current ones are either ugly or so boring they might as well be ugly.

Number 2?

I thought the current lineup as of a year or two back was GM > Toyota > Ford?

Number 2?

I thought the current lineup as of a year or two back was GM > Toyota > Ford?

Yeah, thats what I thought as well.

Number 2?

I thought the current lineup as of a year or two back was GM > Toyota > Ford?
My understanding was that not all the commercial ends were counted on the Ford side and there-for made Toyota look larger numbers wise versus Ford. Don't know about for 2005 though.

That's too bad. I hate to see either GM or Ford doing poorly. :( With Ford, this was a long time coming I'm afraid. GM got all the press last summer with the talk of bankruptcy, since Delphi claimed bankruptcy. Ford was under the radar, but I was wondering how they really were doing, since I felt they were worse off than GM.

Dan

If the decision for the customer is bland with good quality versus bland with a shady past.... we all know which appliance the customer will choose.
I just hope we see some more risky, head-turning, insirational designs from Detroit and Dearborn in the next few years. DCX seems to have found that out already

:bow:

Though Ford 2000 is getting alot of the blame in this story, nothing is ever that simple or straightforward. Consider these items:

1. Ford Panther chassis is archaic. Ford hasn't even been serious about redesigns on the chassis since GM killed the B-body. The current Crown Vic carries the same body that started off as the Grand Marquis over a decade ago (CV had a 6 window greenhouse). Ford is simply collecting a paycheck on these cars.

2. Alot of damage happened under Jac Nasser's reign. Botched introductions, hideous customer service (cut warranty work hours estimates), concious plan to kill Mercury, emphasis on diversifying instead of focusing on cars and trucks, focusing valuable cash on premium brands of the PAG (ie: Jaguar, Rover, etc...) at the expense of Ford's core vehicles, mishandling the Explorer-Bridgestone debacle costing Ford billions in the end.

3. Finally, simply having a pretty dull lineup and being too late and too cash strapped to fix it as fast as is needed. Mustang, Explorer, and F-series trucks (despite being down in sales) were carrying the company till the Milan-Zephyr-Fusion came out. Ranger hasn't had a serious restyle since my boy was born (he'll be 18 this year). Focus' restyling was lame. Thunderbird never got the promised supercharger. LS was never redesigned despite being around 7 years!

It takes alot to bring down a car company. There's alot of clues and a whole lot of assets between good times and locked doors. Puny AMC took a decade, Studebaker took 16 years. GM is going to come around within a couple of years. It also takes radical action to spark a turnaround at a car company. Chrysler proved it more times than anyone can remember. GM's showing it now.

Ford seems to not only have gone conservative, it also doesn't seem to have it's old snap in bringing products out almost as quick as Chrysler used to.

I really hope Ford is doing more and better than it seems from the outside. :(

Man.....I had no idea there was such a dark cloud over Dearborn...

That's too bad. I hate to see either GM or Ford doing poorly. :( With Ford, this was a long time coming I'm afraid. GM got all the press last summer with the talk of bankruptcy, since Delphi claimed bankruptcy. Ford was under the radar, but I was wondering how they really were doing, since I felt they were worse off than GM.

Dan

Here's the thing...
They DID lose volume, they DID lose sales, and they DID lose the #1 brand title, they did slide 28% on SUV sales, and so on...
BUT...
They are making a PROFIT!!!!
Ford posted $1.9-billion in profit for the first 3 quarters of 2005.
That ain't too shabby. :no:

The financial community seems to have more of a fatalistic view of things than the company itself does. Kinda like GM having $20-billion in cash reserves, but everyone was saying "bankruptcy". I never have, nor do I at this time, think that GM would file bankruptcy. Likewise, Ford is not going out of business tomorrow either. What alarmed me about GM was Kerkorian buying up controlling interest and busting the company apart for profits. Since the Ford family already holds controlling interest in Ford, and I think they would have the company's best interest in mind, I don't share the concern for hostile takeover.

They have some cash in hand, and have some good product to build from, but just like GM, it will take time. Good plans are a good first step, but I firmly insist that good products will do more to turn things around than plant closings, layoffs, and "consolidations".

Lastly, I really wish financial advisors would dry up and blow away. They cause more grief than they are worth. Just like bean-counters that negate all the great work of engineers and designers when they strip all the quality, style, and essence of a car in the name of saving a buck.:rolleyes:

Ford will be here in 2008 - let's just see if they can undo some of the past mistakes (several itemized by Guy above) that are costing them sales today.

Ford had the # selling small pickup with the Ranger, then gave it right away to the Toyota Tacoma and Chevy Colorado. They are taking the ranger name and doing to it what they did with the Tuarus.

Five Hundred is a great car in a bland package.

2006 Explorer look like a 2002 Explorer with a new chrome grill to the avg. person on the steet dispite being the safest midsize SUV on the street and getting a Mustang GT V8

at least they are beating out GM in the race to 5 & 6 speed automatics

Here's the thing...
…I really wish financial advisors would dry up and blow away. They cause more grief than they are worth. Just like bean-counters that negate all the great work of engineers and designers when they strip all the quality, style, and essence of a car in the name of saving a buck.

Car enthusiasts like to blame “financial analysts”/“bean counters” for the demise of their favorite car and/or product that isn’t quite as good as it could be (in their opinion). The truth is, manufacturers need those bean counters just as much as they need designers, engineers and factory technicians…to say one should always rule over the other is shortsighted and would doom any automaker to failure.

Engineers don’t go to school to learn how to deal with financial issues and as such, they usually don’t see that they have any responsibility to consider costs…with that attitude left unchecked, a GM design engineer would design and build the best car in the world…it would never crash, and if it did crash no one would ever be hurt and it would never be beaten in any performance contest or measurement of any kind; the problem is, not more than two or three people on the planet could afford to buy it.

Building economy cars and family sedans (“appliances” as some like to call them) and selling lost of them at a profit are what keeps manufacturers in business and able to produce those “must have” cars we all like. But the “must have” cars will never sell enough to keep the factory doors open. Likewise, even the “must have” cars have to make some concessions to economics or they simply can’t and won’t be produced (or won’t last long if they are).

Besides, if every manufacturer made perfect cars that we would never want to add our own personalities/improvements to, what would happen to the aftermarket? :)

Engineers don’t go to school to learn how to deal with financial issues and as such, they usually don’t see that they have any responsibility to consider costs…with that attitude left unchecked, a GM design engineer would design and build the best car in the world…it would never crash, and if it did crash no one would ever be hurt and it would never be beaten in any performance contest or measurement of any kind; the problem is, not more than two or three people on the planet could afford to buy it.


Maybe it's just the engineer in me talking but, I hear people say that all the time and I wholeheartedly disagree with that statement. Sure, if you gave Engineers no restrictions, that *may* be the case, but if you just had a bunch of engineers and said "build a car that sells for $20,000 they'd do just fine.

Imho, engineers have a much better grounding in reality than the beancounters, who swear that if you make it out of dirt filled plastic and foam and with a beam axle suspension that no-one will ever notice. When the beancounters have too much power, this is the case. You still end up with a car that sells for $20,000 (but not for long, because people figure out what it's made of real quick).

Also, don't confuse engineers for "car guys" because there is a big difference. Many engineers are car guys, but the majority would be just as happy designing toasters or airplanes. If the car guys were totally running the show, then it would be bad news (for most people, anyway). Nothing but two seat v8 roadsters as far as the eye can see... :think:

Engineers don’t go to school to learn how to deal with financial issues and as such, they usually don’t see that they have any responsibility to consider costs…with that attitude left unchecked, a GM design engineer would design and build the best car in the world…it would never crash, and if it did crash no one would ever be hurt and it would never be beaten in any performance contest or measurement of any kind; the problem is, not more than two or three people on the planet could afford to buy it.I'd say, after working with several engineers for a couple of years, your wrong.
They highly consider the price, seeking out the best materials that will meet their criteria in both performance and cost. The problem is, beancounters sometimes think they can "save" the company even more money, as if it's their job to "save" the company. And even lower the standards that need to be met per engineering, in performance and/or endurance.
While I do believe both are needed, their needs to be a heavier weight on performance, NOW, as in endurance etc, more than ever. There needs to be a strong cooperation and communication between the two. Cost cannot be the ONLY consideration.

I'd say, after working with several engineers for a couple of years, your wrong.
They highly consider the price, seeking out the best materials that will meet their criteria in both performance and cost. The problem is, beancounters sometimes think they can "save" the company even more money, as if it's their job to "save" the company. And even lower the standards that need to be met per engineering, in performance and/or endurance.
While I do believe both are needed, their needs to be a heavier weight on performance, NOW, as in endurance etc, more than ever. Their needs to be a strong cooperation and communication between the two. Cost cannot be the ONLY consideration.

Not to discount your experience, but working with a few engineers over a coupel of years is not necessairly representative of the whole.

And, performance being the primary goal wold work only in a world where the majority of buyers go and buy because of performance...they dont.

The value of the Corvette to Chevrolet, has little to do with the relatively small amount of profit involved (from GM's prespective) Oh I'll admit, the guy may drool over the Corvette but he buys the Impalla or mini-van; at least until such time as he can afford both.

You are right, cost cannot be the only consideration but it is just as important as engineering perfection.

Maybe it's just the engineer in me talking but, I hear people say that all the time and I wholeheartedly disagree with that statement. Sure, if you gave Engineers no restrictions, that *may* be the case, but if you just had a bunch of engineers and said "build a car that sells for $20,000 they'd do just fine.

Imho, engineers have a much better grounding in reality than the beancounters, who swear that if you make it out of dirt filled plastic and foam and with a beam axle suspension that no-one will ever notice. When the beancounters have too much power, this is the case. You still end up with a car that sells for $20,000 (but not for long, because people figure out what it's made of real quick).

Also, don't confuse engineers for "car guys" because there is a big difference. Many engineers are car guys, but the majority would be just as happy designing toasters or airplanes. If the car guys were totally running the show, then it would be bad news (for most people, anyway). Nothing but two seat v8 roadsters as far as the eye can see... :think:

It isn't the responsibility of the financial analyst to decide to do the beam axle...that's the job of management...my point is, no one speciality is more important than another; it's up to the management of the company to make sure they all work together for the good of the company.

Not to discount your experience, but working with a few engineers over a coupel of years is not necessairly representative of the whole.

...but a blanket statement saying that they don't understand financial responsibilites is? :think:

Engineers don’t go to school to learn how to deal with financial issues and as such, they usually don’t see that they have any responsibility to consider costs…with that attitude left unchecked, a GM design engineer would design and build the best car in the world…it would never crash, and if it did crash no one would ever be hurt and it would never be beaten in any performance contest or measurement of any kind; the problem is, not more than two or three people on the planet could afford to buy it.


Now I know beyond any shadow of doubt that you are not an engineer, who has gone through any ABET-accredited engineering program and earned a degree.

ALL engineers are required to take a series of engineering economics courses that are geared towards bringing financial responsibility into design. My program required 2 specific courses on top of the 2 regular courses required for general college. You learn everything from line-item cost accounting methods, to amortization and depreciation schedule calculations.

Back to the meaning of my comment, I have seen too many times in my career, an engineer develops a great design that will do the job well and last a long time, only to have a bean-counter come along and ask if there is another material, another way to build, etc that will reduce cost. I have also seen bean-counters kill a design that has curb appeal and go with a more conservative design that costs less but looks like turd. Engineers and designers typically put function, fit, and form first (to coin a term), whereas the bean-counters put total costs and profits first.

I am not saying there is no use for accountants at all. I AM saying that they should not be allowed to have such authoritative decisionmaking power so as to decide what designs go through and what designs are nixxed based on cost alone. Throughout history, we have had companies started by engineers and creative minds that became wildly successful, only to go to pot when beancounters took over (typically after the founding engineer died). Research General Electric, Edison Electric, Duke Power, AMP Inc, PPG Industries, Texas Instruments, Apple Computer, Microsoft, IBM, and oodles of others to see what can happen when an engineer makes their own decisions about where to invest his/her money in their company. NONE of those were started by a bean-counter... and for good reason too.

Here's my thought about financial advisors...
To me, they are nothing but exotic leeches. They are able to produce NOTHING for themselves, and must resort to studying other people's work and motives to have a saleable entity (which is "data"). They are only able to make money by convincing other people (with money) that they know something, and it will cost them to get at it. SOME talent.:rolleyes:

Lastly, there were engineers and designers in this world LONG before any financial analysts or accountants. Thank Heavens. If there had been an accountant looming over the guy that invented the wheel, we'd only have the wood axle because it costs too much money and time to chisel the wheel itself from stone:alert:

its comes down to foreign vs. domestic double standards.

Now I know beyond any shadow of doubt that you are not an engineer, who has gone through any ABET-accredited engineering program and earned a degree.

ALL engineers are required to take a series of engineering economics courses that are geared towards bringing financial responsibility into design. My program required 2 specific courses on top of the 2 regular courses required for general college. You learn everything from line-item cost accounting methods, to amortization and depreciation schedule calculations.

Back to the meaning of my comment, I have seen too many times in my career, an engineer develops a great design that will do the job well and last a long time, only to have a bean-counter come along and ask if there is another material, another way to build, etc that will reduce cost. I have also seen bean-counters kill a design that has curb appeal and go with a more conservative design that costs less but looks like turd. Engineers and designers typically put function, fit, and form first (to coin a term), whereas the bean-counters put total costs and profits first.

I am not saying there is no use for accountants at all. I AM saying that they should not be allowed to have such authoritative decisionmaking power so as to decide what designs go through and what designs are nixxed based on cost alone. Throughout history, we have had companies started by engineers and creative minds that became wildly successful, only to go to pot when beancounters took over (typically after the founding engineer died). Research General Electric, Edison Electric, Duke Power, AMP Inc, PPG Industries, Texas Instruments, Apple Computer, Microsoft, IBM, and oodles of others to see what can happen when an engineer makes their own decisions about where to invest his/her money in their company. NONE of those were started by a bean-counter... and for good reason too.

Here's my thought about financial advisors...
To me, they are nothing but exotic leeches. They are able to produce NOTHING for themselves, and must resort to studying other people's work and motives to have a saleable entity (which is "data"). They are only able to make money by convincing other people (with money) that they know something, and it will cost them to get at it. SOME talent.:rolleyes:

Lastly, there were engineers and designers in this world LONG before any financial analysts or accountants. Thank Heavens. If there had been an accountant looming over the guy that invented the wheel, we'd only have the wood axle because it costs too much money and time to chisel the wheel
itself from stone:alert:

I am not an engineer nor have I ever claimed to be so I’m not sure why you say that as if it’s a revelation.

By the way...I think enough about engineers to use the term "engineer"...perhaps you could stop using derogatory terms for accountants/financial professionals such as "bean counters"??? Of course, given your now very evident hostility toward financial professionals I'm surprised you stop at just calling them bean counters.

My original statement was perhaps too broad but taking a couple of accounting courses while in an engineering program does not give an engineering student a true appreciation for financial analysis any more than taking the Richard Petty Driving Experience makes one a NASCAR driver.

True, most companies are not started by accountants but then again, "engineering" is not the real issue there anyway; I would suggest that entrepreneurship is. However, no company will survive the long term if it ignores the financial side of the equation…that’s something an engineer should be able to appreciate…successful business IS an equation of many elements that must be balanced and work together as a whole. Any one of them allowed to overpower the others will doom a company.

It IS part of the accountant’s job to ask if there is another material or another way to produce the product that would cost less and provide more profit…and as I’ve already said, which some seem to be conveniently ignoring, it is the managers and directors and the vice-presidents and CEO’s jobs do decide which direction the company takes (or what material is used or what production process is chosen). An engineer shouldn’t fear the questions.

Your statement that “…there were engineers and designers in this world LONG before any financial analysts or accountants…” seems far more fanciful than factual nor does archeological research support it. In fact, it has shown us that financial records/financial concerns existed even in the earliest days civilization.

...but a blanket statement saying that they don't understand financial responsibilites is? :think:

Good point...obviously, broad, sweeping statements are always dangerous to make and of course, therw are almost always exceptions.

its comes down to foreign vs. domestic double standards.

Do you think you could elaborate just a bit more??? :confused:

Do you think you could elaborate just a bit more??? :confused:
No. :) Red made a post about it a while back.
Mostly showing that foreign automakers don't get taxed as much, and get more benefits.

Here's the thing...
They DID lose volume, they DID lose sales, and they DID lose the #1 brand title, they did slide 28% on SUV sales, and so on...
BUT...
They are making a PROFIT!!!!
Ford posted $1.9-billion in profit for the first 3 quarters of 2005.
That ain't too shabby. :no:

The financial community seems to have more of a fatalistic view of things than the company itself does. Kinda like GM having $20-billion in cash reserves, but everyone was saying "bankruptcy". I never have, nor do I at this time, think that GM would file bankruptcy. Likewise, Ford is not going out of business tomorrow either. What alarmed me about GM was Kerkorian buying up controlling interest and busting the company apart for profits. Since the Ford family already holds controlling interest in Ford, and I think they would have the company's best interest in mind, I don't share the concern for hostile takeover.

They have some cash in hand, and have some good product to build from, but just like GM, it will take time. Good plans are a good first step, but I firmly insist that good products will do more to turn things around than plant closings, layoffs, and "consolidations"..

I don't think Ford's going anywhere. I failed to mention that Ford's plan is to focus on the bottom line, and despite a loss in sales and market position, they are in better financial shape than they have been in awhile. But at the same time, Ford has gone far more conservative than they have since I can remember, and they risk becoming what AMC was in the early 70s. Profitable and safe, but without any intrestingly designed vehicles to keep momemtum going.

I stronly suspect I'm wrong in some ways, because J. Mays seems to be ready to take more chances with exterior design than the F-series, large SUVs, Five Hundred, and Fusion bodies seemed to show. And it also is starting to look like I may have been a little premature in bashing Lincoln in discontinuing the superb LS when I felt a redesign would do.

But Ford used to have the ability to have cars materialize out of nowhere, and end up better thought out than Chrysler did. I see why Ford's no longer doing this (screamish about having a botched introduction) but Ford needs to get their old snap back IMO. :)

No. :) Red made a post about it a while back.
Mostly showing that foreign automakers don't get taxed as much, and get more benefits.

That half-truth, propped up by innuendo, is mostly a fabrication of the UAW as a way to ensure the continued existence of the union and to avoid addressing the real problems facing the domestic nameplates. But thanks for clearing up where you are coming from.

Here's my thought about financial advisors...
To me, they are nothing but exotic leeches. They are able to produce NOTHING for themselves, and must resort to studying other people's work and motives to have a saleable entity (which is "data"). They are only able to make money by convincing other people (with money) that they know something, and it will cost them to get at it. SOME talent.:rolleyes:

/signed - took the words out of my mouth!

I am not an engineer nor have I ever claimed to be so I’m not sure why you say that as if it’s a revelation.
I never said you did claim to be an engineer. I simply stated that it was obviouse to me (after your comment) that you were NOT an engineer, and you know nothing about what it takes to earn such a degree. Simple observation - nothing more. If I offended you, I apologize. Obviously, you must hold engineering in high regard, and perhaps you aspire to become one someday.:bow:

By the way...I think enough about engineers to use the term "engineer"...perhaps you could stop using derogatory terms for accountants/financial professionals such as "bean counters"??? Of course, given your now very evident hostility toward financial professionals I'm surprised you stop at just calling them bean counters.
So let's call it a draw... I'll stop at bean-counters and not get any worse than that! ;)
You can call engineers whatever you like... doesn't break any of my bones.

Seriously, I wouldn't say I have "hostility" towards them, but I do have major problems with the level of authority they carry in business these days. I have been in industry for over 20 years now, and I have yet to meet any "accountant" that brought value or tangible benefit out of the office and onto a manufacturing floor. They can watch the books, but do not belong in a decision-making role when it comes to manufacturing. They can - and should - be on the team, but NOT calling the plays IMO.

My original statement was perhaps too broad but taking a couple of accounting courses while in an engineering program does not give an engineering student a true appreciation for financial analysis any more than taking the Richard Petty Driving Experience makes one a NASCAR driver.
OK - likewise, for an accountant to take a course in physics does NOT make him/her qualified to propose material changes to a part to save money, or to tell a designer that any given design is not optimal.
So we're back to your first statement and my first rebuttal... "accountants" need to cook books, make payrolls, and divy out profitsharing, and let the properly-trained engineers and designers produce goods.

True, most companies are not started by accountants but then again, "engineering" is not the real issue there anyway; I would suggest that entrepreneurship is. However, no company will survive the long term if it ignores the financial side of the equation…that’s something an engineer should be able to appreciate…successful business IS an equation of many elements that must be balanced and work together as a whole. Any one of them allowed to overpower the others will doom a company.
Most companies are not started by accountants FOR A REASON!!! They have nothing to sell!!!
To insinuate that an engineer would "ignore" the financial side of a company is ludicrous. The point to entrepreneurship is to bring something marketable to the people and sell it to them for profit... be it making power, making shoes, or making dinner. The recent development of paying advisors 2-5% of your gains because they "know" where to put your money is goofy to me. And to let them run your business based on financials and predictions alone is downright absurd.

I think engineers have FAR more appreciation for the finances in a given project that the typical accountant has for the engineering-side. Go blow smoke on the accountants to take 16-20 hours of core engineering courses, then come back and talk to me.

It IS part of the accountant’s job to ask if there is another material or another way to produce the product that would cost less and provide more profit…and as I’ve already said, which some seem to be conveniently ignoring, it is the managers and directors and the vice-presidents and CEO’s jobs do decide which direction the company takes (or what material is used or what production process is chosen). An engineer shouldn’t fear the questions.
NO, it is not OK to ask if there is another material or way to produce!!! THAT statement alone stereotypes the attitude of the modern bean-counter!!! They are encroaching into areas where they are not qualified to make assertions. Simply asking the question is both insulting to the engineer who did his job correctly, and wasteful to all parties because of the trivialities it brings forth. It's like me asking a brain surgeon if there is another way into the brain besides cutting the skull.:rolleyes:
You let me do my job, and you go do yours. Frankly, I don't have the time to do my job, AND have explain every little aspect of it to some ding-dong sitting behind a boardroom table.

Your statement that “…there were engineers and designers in this world LONG before any financial analysts or accountants…” seems far more fanciful than factual nor does archeological research support it. In fact, it has shown us that financial records/financial concerns existed even in the earliest days civilization.
Ummm... no. I don't buy it. Bring me some evidence, or let this one go.
Personally, I'm quite sure that cave men were MORE concerned about making tools to survive than how many gold shillings they had stashed in a cave somewhere.

Whats even more distressful than this casual debate about the role of beancounters in modern business, is the fact that they don't see themselves as doing anything wrong in any way.

Did engineers get Enron in trouble, or beancounters?
(HINT - "Former Enron finance chief Andrew Fastow and his wife have agreed to plead guilty for their roles in a massive accounting scandal that brought down the energy giant in 2001." LINKY (http://www.cnn.com/2004/LAW/01/13/enron.fastows.ap/))
Were engineers imprisoned over Tyco International's fraud, or beancounters?
(HINT - "TYCO CEO Kozlowski gets up to 25 years and Mark Swartz, former Tyco CFO, also gets 8-1/3 to 25 for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate." LINKY (http://money.cnn.com/2005/09/19/news/newsmakers/kozlowski_sentence/))
Did engineers creat the fiasco at AOL/Time/Warner, or beancounters?
(Hint - "Steve Case is not ashamed of taking the fall for the merger of America Online and Time Warner, perhaps one of the greatest failed deals in corporate history." LINKY (http://news.com.com/2100-1030_3-5534519.html) )
Did engineers run Arthur-Anderson accounting firm into the ground, or beancounters?
(HINT - "Andersen Guilty - Once grand accounting firm now faces five years probation, $500,000 fine and possibly its own end." LINKY (http://money.cnn.com/2002/06/13/news/andersen_verdict/) )

Why don't you show me some good multi-million dollar scams and scandals that were masterminded by ENGINEERS?
You know, typically it is the engineer that has the conscience, wanting to do right at any cost, and ends up being the whistle-blower. Remember the Challenger shuttle - it was an engineer who said "don't go" and a program manager who said "go anyway, our budget is tight". More recently, engineers said the armored vests made with Zylon would degrade if exposed to UV and moisture, but front office execs at Second Chance Body Armor, Inc decided to go ahead and sell them to LEAs and the government anyways.
It's really not hard to find engineers wanting to do a good job.
It's also not hard to find corruption in business that involves beancounters.
Go figure. :blah:


I digress. I don't have time to waste explaining this further... I have to figure out a way to produce my products cheaper so I can afford to pay all the MBA's and MSBA's that are running my board of directors who, by the way, want to ship MY job to India where they can get it done for LESS MONEY. (Again, it's not the big-wig money-mongers at the top who are the problem, it's the expensive engineer that enables them to make a product but gets paid oh, maybe 20-30% of what they do annually. :rolleyes: )

Thanks for the discussion! :thumb:

ProudPony,

It's very easy to make an argument when you ignore obvious intent or twist words. However, there really isn’t any point in engaging in a long, drawn-out discussion with you because in the overall scheme of things, I don’t really care.

I also don’t care that you find it insulting if a “bean counter” asks you questions…that IS his/her job whether you like it or not and it is a company’s management that has the responsibility for making the decisions. I didn’t and never will say an accountant should pretend to be an engineer and start doing design work…what I said is that they should ask the questions - again, it’s the company’s management that has to decide what course to take. If you happen to work for a company where there are poor decision makers in place and you are that angry about it then go somewhere else…Wal-Mart and McDonalds are likely hiring.

You have convinced me of one thing - I now know that no engineer has ever been arrested for anything, let alone found guilty; they are the epitome of moral conscience and obviously, all criminals are accountants - thanks for clearing that up!

Ford is doing ok as a company overall. They beat 4th quarter earnings, made $2 Billion, and Ford stock is up 8% this morning

ProudPony, It's very easy to make an argument when you ignore obvious intent or twist words. However, there really isn’t any point in engaging in a long, drawn-out discussion with you because in the overall scheme of things, I don’t really care.

You have convinced me of one thing - I now know that no engineer has ever been arrested for anything, let alone found guilty; they are the epitome of moral conscience and obviously, all criminals are accountants - thanks for clearing that up!

Glad to be of help! :thumb:

Seriously, you can't expect people to understand things if they are not made aware of them. Painting the whole landscape with one big brush does not allow one to see the detail... I live in the detail. Every day. I answer the questions you speak of. I literally make decisions every day on equipment that could kill people. No stress. :rolleyes:
I have senior management wanting me to justify why I send parts to California to be heat treated EVERY TIME WE MAKE THE ORDER. And every time, I have to go to a meeting and explain that this is the ONLY shop in the USA that has an ethylene-glycol charged cooling tank big enough to do our parts, they have the reclamation system, and they know how to treat aluminum better than anybody else. Even Airbus in Europe flies parts over here to this shop to have work done. The bottom line is this... peoples' LIVES are at stake, this company knows it, they have made the investment to do this process the best way known to man, and they have never screwed up. They are WORTH $3/part more to get it right. ONE bad part, and we have a multi-million dollar lawsuit that we will NOT win, then what is $3/part worth at maybe 50-100k parts total. It gets more than frustrating - it gets down-right wasteful, and the queries and meetings to question these calls cost our company more than the additional cost of the parts do... I'm sure.

It's a daily thing for me, so I am probably more atune to it than most.
Sorry, but I care.

I apologize if you find my defense of the working engineers out here too staunch, but I think we get the short end of the stick way too often, and it's usually some ding-dong penny-pincher that is yeilding the stick. When we bash the cold, clammy interior of a 3rd gen, everyone says "engineering-this and designers-that". Rarely does anyone in the public surmise that the original design and engineer's proposals were FAR better than what went into production, but project leaders and execs limited the spending and forced production to reduce the quality and materials to what we actually get, because the edict was "take the reductions, or we will kill the project all-together."

Let's close this debate by stating that there are some dud engineers just like their are some dutiful and effective accountants, but to state that engineers are oblivious to financial aspects of a business is way off base.

ProudPony,

We probably agree more than we disagree.

As an outside observer, it seems to me your real issues lie with the company you work for...they sound more than bit obtuse to me (not that they've cornered the marked on that score by any means). :)

Thinking about this topic a lot today made me realize something about quality, materials and design.
*Take "blue-jeans", from hearing my kids talk; how many kids brag about the "brand R" from a company like Walmart, as compared to "brand N" from Macy's??
*Brand "R" costs much less, wears about the same, but feels rough and cheap and looks pretty plain.
*Brand "N" cost a lot more, but feels better, softer, more comfortable, and look "Hot" and trendy.
**How many people will gladly pay more for brand "N", b/c they know it's better quality, it will make the happy, and will last, and aren't ashamed to be seen in them??
**Answer: Ask people, look around, people WILL pay more for a QUALITY made product, that looks the part.
Ford (and GM for that matter) must learn this "All Over Again..."
Only this will SAVE them...
(And build America back up, by compensating people for what a job's worth, as in time and difficulty. We're going the WRONG WAY.)

ProudPony,

We probably agree more than we disagree.

As an outside observer, it seems to me your real issues lie with the company you work for...they sound more than bit obtuse to me (not that they've cornered the marked on that score by any means). :)

Actually, when talking about the auto industry, he's not all that far off...

It's nerve grating to spend 50% of your time having to "justify your decisions" to people who have no real understanding of what you're trying to do. You have to understand that "yes, it is the cheapest possible part" is not the answer these people will take. They want research. reports. proof...to the degree that it impairs your ability to get the job done in the first place. Proudpony must have to do this a lot to be so bitter about the whole thing. I can't say that I blame him.

Ford is doing ok as a company overall. They beat 4th quarter earnings, made $2 Billion, and Ford stock is up 8% this morning

The one thing that no one has considered with Ford's $2 Billion profit, is that it includes their sale of Hertz with a $1.3 Billion increase in fourth quarter results. The investors who purchased Hertz also assumed almost $10 Billion in debt, and paid Ford $5.6 Billion in cash.

ProudPony,

We probably agree more than we disagree.

As an outside observer, it seems to me your real issues lie with the company you work for...they sound more than bit obtuse to me (not that they've cornered the marked on that score by any means). :)

Actually, the same issues transcend all companies I have worked for (3) and industry as a whole. I am having some work done with an engineering firm out of Charlotte, NC right now who does fuel rod containers for Nuclear stations, tooling for Seimens/Westinghouse turbines, and paper machines for 3 large mill companies, and at lunch last Thursday, they said they see the same thing from everybody. It's not my company, it the modern business model.

More to the point of the thread - as an insider, I see this as one of the MOST IMPORTANT issues Ford needs to eliminate to become leaner, faster, and better as a manufacturing corporation. THIS IS SOME OF WHAT IS KILLING US IN THE USA TODAY.

ProudPony,
Actually, when talking about the auto industry, he's not all that far off...

It's nerve grating to spend 50% of your time having to "justify your decisions" to people who have no real understanding of what you're trying to do. You have to understand that "yes, it is the cheapest possible part" is not the answer these people will take. They want research. reports. proof...to the degree that it impairs your ability to get the job done in the first place. Proudpony must have to do this a lot to be so bitter about the whole thing. I can't say that I blame him.
Again, it's not just the auto industry - it's ALL manufacturing today in the US.
As for the justifications - you hit the nail right on the head. I do the research, and dot every "i", only to have to replay it over and over and over to rejustify it to every level of management as a project goes up through approval chains of command. It's like the next level up doesn't think you really did all the homework before you got to them.:rolleyes: And (as you said WERM), all of the time I spend re-stating and re-justifying these decisions COULD have been far better spent moving ahead on the next project instead.

Indeed, it is frustrating. You do the job once, relive it a dozen times explaining it to everyone under the CEO, then you struggle to convince the same management to keep your position and not eliminate your job because you are not productive enough for the salary you make.:(

And yes, it's a DAILY battle. If I didn't love the engineering itself, it wouldn't be worth it. But when you see one of your creations working in a plant or going down the street - it pays BIG dividends inside.

The one thing that no one has considered with Ford's $2 Billion profit, is that it includes their sale of Hertz with a $1.3 Billion increase in fourth quarter results. The investors who purchased Hertz also assumed almost $10 Billion in debt, and paid Ford $5.6 Billion in cash.
Good points. No doubt Ford has been juggling some assets.
I hated to see them sell Hertz, but swapping $10b in debt for $5.6b in cash wasn't a bad deal. And honestly, Ford should be in the business of BUILDING cars, not renting them.

Their announcements yesterday didn't shock me too bad. I ws surprised at how many people they had already eliminated from their 2002 plan. But 30k people over a 6 year period is really not too aggressive if you consider retirements, natural attrition, and the like. The plant closings will be the big hit to take because all that capital investment will be sitting idle.

I still go back to my original statement though... GOOD PRODUCT will do more to pull them out of the funk than any restructuring or global realignment project. I hope their new "Innovation" paradigm takes good root and grows fast.

Good points. No doubt Ford has been juggling some assets.
I hated to see them sell Hertz, but swapping $10b in debt for $5.6b in cash wasn't a bad deal. And honestly, Ford should be in the business of BUILDING cars, not renting them.

Their announcements yesterday didn't shock me too bad. I ws surprised at how many people they had already eliminated from their 2002 plan. But 30k people over a 6 year period is really not too aggressive if you consider retirements, natural attrition, and the like. The plant closings will be the big hit to take because all that capital investment will be sitting idle.

I still go back to my original statement though... GOOD PRODUCT will do more to pull them out of the funk than any restructuring or global realignment project. I hope their new "Innovation" paradigm takes good root and grows fast.
If I had a nickel for every time those guys said "innovation," I could bail Ford and GM out...

Actually, the same issues transcend all companies I have worked for (3) and industry as a whole. I am having some work done with an engineering firm out of Charlotte, NC right now who does fuel rod containers for Nuclear stations, tooling for Seimens/Westinghouse turbines, and paper machines for 3 large mill companies, and at lunch last Thursday, they said they see the same thing from everybody. It's not my company, it the modern business model.

More to the point of the thread - as an insider, I see this as one of the MOST IMPORTANT issues Ford needs to eliminate to become leaner, faster, and better as a manufacturing corporation. THIS IS SOME OF WHAT IS KILLING US IN THE USA TODAY.


Again, it's not just the auto industry - it's ALL manufacturing today in the US.
As for the justifications - you hit the nail right on the head. I do the research, and dot every "i", only to have to replay it over and over and over to rejustify it to every level of management as a project goes up through approval chains of command. It's like the next level up doesn't think you really did all the homework before you got to them.:rolleyes: And (as you said WERM), all of the time I spend re-stating and re-justifying these decisions COULD have been far better spent moving ahead on the next project instead.

Indeed, it is frustrating. You do the job once, relive it a dozen times explaining it to everyone under the CEO, then you struggle to convince the same management to keep your position and not eliminate your job because you are not productive enough for the salary you make.:(

And yes, it's a DAILY battle. If I didn't love the engineering itself, it wouldn't be worth it. But when you see one of your creations working in a plant or going down the street - it pays BIG dividends inside.

Every job has its frustrations and we’ve all spent time doing things for our management that we feel is unjustified, unneeded or wasteful. However; that frankly isn’t your (or my) call.

We all have the same choices…put ourselves in management so that we can make the decisions; quite and start our own company; or find a company that does it better and I would submit that they dont' all do it the same.

After having consulted with a few dozen companies in my career and worked as am employee for a few others, I can tell you that they DON’T all operate from the exact same business model – some do it much better than others.

Of course in the end, everybody answers to somebody. :cry:

After having consulted with a few dozen companies in my career and worked as am employee for a few others, I can tell you that they DON’T all operate from the exact same business model – some do it much better than others.

I would LOVE to go to work for Pixar Studios... but they don't need a mechanical engineer today.:(

Hershey's (as in the chocolate company) used to be the benchmark for East Coast employers, but they too have begun to crumble under the weight of Asian influence and cost structures. :(

My hope is that the pendulum swings both ways. Maybe again before I reach retirement age, America will have lots ethical and competitive businesses that have some shred of partiotic duty and minimal bureaucracy.
(A guy can dream, right?)

PS - How in the world RP stayed out of his one is beyond me!?!? I'da thunk he could offer up some good fodder about big companies and goofy management for sure. There again, I guess he needs his paycheck just like I do.:o

That half-truth, propped up by innuendo, is mostly a fabrication of the UAW as a way to ensure the continued existence of the union and to avoid addressing the real problems facing the domestic nameplates. But thanks for clearing up where you are coming from.


You obviously need to learn who "RED" is. :Owned:

You obviously need to learn who "RED" is. :Owned:

If you mean RedPlanet...I know who "RED" is...if you mean some other "RED" then please enlighten me.