At the beginning of his tenure as CEO of Ford Motor, Jim Farley was ambitious to change the company. But three years later, he found himself hindered by a problem that had troubled Ford's leadership for decades: managing a large company, which was famous for its cultural isolation, and sometimes even appeared dysfunctional.

　　Image source: provided by enterprises

　　On March 2, last year, Ford Motor announced that it would separate its electric vehicle and diesel locomotive business and establish independent electric vehicle and fuel vehicle business units to accelerate the "dual transformation" of the traditional diesel engine business and the development of intelligent networked electric vehicles. Now, on the eve of the first anniversary, Ford's business spin-off plan is progressing slowly and quickly under the leadership of Jim Farley.

　　Poor operation

　　"These huge changes are not linear and completely predictable," Jim Farley said. I am happy that Ford's first-round electric vehicle and networked vehicle software have been welcomed, but I am frustrated that the long-term cost and quality problems have dragged down the company's business. He attributed the poor performance in 2022 to poor operation and execution.

　　Bill Ford, executive chairman of Ford Motor, said that such problems had occurred before. "In my career, this is an episode. Sometimes we make the right choice, and sometimes we make mistakes." He said, "I think we may be too concerned about the future, so now we may make changes and focus more on the present."

　　Jim Farley said that compared with traditional competitors, Ford has a cost disadvantage of US $8 billion in procurement, design and manufacturing. "Alan Mulally, the former chief executive of Ford, has largely cleared the internal obstacles, but a similar situation has occurred later," Jim Farley said.

　　"We can quickly cut costs and personnel," Jim Farley said

　　cost disadvantage

　　John Lawler, Ford's chief financial officer, said that about half of Ford's financial disadvantage was due to the high material cost. In addition, the vehicle warranty business is a $1 billion headache, although the warranty cost last year is basically the same as that in 2021.

　　Jim Farley promised to solve Ford's quality problems, but only last week three new problems appeared: the F-150 electric pickup truck stopped production and stopped shipping for several weeks after the battery caught fire; The Louisville assembly plant was shut down due to the software problem of the new generation of wing tiger pre-production model; And stop selling 10-speed automatic transmission that affected many nameplates, because the bolts may be loose.

　　According to the data of the U.S. Highway Safety Administration (NHTSA), Ford has been the company with the largest number of vehicle recalls in the U.S. automotive industry in the past two years.

　　Jim Farley said that in the future, the company plans to redesign the manufacturing process to reduce the parts that workers must install. He said that he hoped to reduce the number of automobile fasteners by half and shift to larger castings with fewer parts, like Tesla.

　　But it has proved that it is not easy to achieve this goal. "People have great prejudice against our way of doing things and think that we will never reach the 8% profit margin of electric vehicles." Jim Farley said, "We must design cars in a completely different way, and produce, purchase and sell them in a completely different way. This is a huge change."

　　Cultural differences

　　Separating the business of traditional fuel vehicles and electric vehicles will bring certain challenges to Ford, including maintaining the enthusiasm of all teams. Last year, it was reported that the layoffs would start from traditional business, resulting in a blow to the morale of the department. In the end, Ford cut staff in several departments.

　　"In terms of culture, we must always ensure that everyone feels equal and that no part of the enterprise is more popular," said Bill Ford "Jim and I spent a lot of time on this matter, because in the early stage of my career, I also experienced such things. If you are not in a new business field, you will not be considered as a promising person, which is destructive to the company culture. I think the team and the organization are united. But there are always whispers, and I understand that this really exists. But Jim and his team have done very well, making this Become an equal cause. "

　　As the head of Ford's electric vehicle department (Model e), Doug Field tried to maintain cooperation by recognizing the different working styles of the two teams, because many of the personnel of Model e came from newer, technology-focused companies, and the operation mode was different from that of traditional automobile manufacturers.

　　"One of the principles is' don't try to average '," Field said

　　Full of confidence

　　Despite many problems, Bill Ford still fully believes that Jim is the right person to solve the problem. "I think this is the best leadership team in my memory," said Bill Ford. "Jim is an excellent CEO. He has formed an all-star team." Since taking office at the end of 2020, more than half of the management team led by Jim is new.

　　Bill Ford said that Jim could manage the company at multiple levels. He said, "Most CEOs have deviations in operation or strategy, but Jim has achieved a good balance. According to my experience, this is very rare. Jim has a lot of things to do, and now he basically runs three different companies."

　　Bill Ford believes that splitting the company is the right decision, and Jim and his team need to continue to act quickly. He said, "Jim's job may be the most difficult among the CEOs I have ever met, but he is also the only person qualified to do it."