Liberal Talk Radio

I continue to be fascinated with former Boeing exec Alan Mulally’s new reign at Ford. Business Week’s excellent article on the new CEO shows just how rotten Ford had become from within:

Personal ties with the Ford family, always important at the company, sometimes trumped genuine performance in promotion decisions. So ambitious managers focused increasingly on kissing the right rings instead of racking up results. It became “something of a palace atmosphere,” says Gerald C. Meyers, a professor at the University of Michigan School of Business. Some critics also blame the family, which has many members who depend on dividends as their main source of income, for encouraging a focus on current profits rather than long-term planning over the decades.

Here’s another great anecdote:

When Mulally was reviewing the company’s 2008 product line last September, for example, he was told that Ford loses close to $3,000 every time a customer buys a Focus compact, according to one executive. “Why haven’t you figured out a way to make a profit?” he asked. Executives explained that Ford needed the high sales volume to maintain the company’s CAFE, or corporate average fuel economy, rating and that the plant that makes the car is a high-cost UAW factory in Michigan. “That’s not what I asked,” he shot back. “I want to know why no one figured out a way to build this car at a profit, whether it has to be built in Michigan or China or India, if that’s what it takes.” Nobody had a good answer.

Very interesting.