July 16, 2006. Exerpts from the article "Is Ford Running on Empty?"

Weak future predictions.
Mr. Ford’s challenges are extraordinary. His company reported losses of $1.6 billion in North America last year and lost $1.2 billion worldwide in the first quarter this year. On Thursday, Ford halved its quarterly dividend to a nickel to preserve cash, and analysts expect the company to report tepid second-quarter earnings this week. Many are already forecasting a third-quarter loss. With analysts speculating that the dividend cut means that Ford’s fortunes are worsening, Mr. Ford issued a statement noting that “the headwinds we faced at the beginning of 2006 have only become stronger.”


Too Little, too late.
As Mr. Ford tries to stem a slide that has taken his company from 25 percent of the American market in 2000 to about 18 percent now, he must preserve his family’s legacy, fight off Asian automakers’ ferocious assault on Detroit and somehow realize his ambition, as yet unfulfilled, to make Ford the environmental leader among American auto companies.

Me, Myself and I.
A casual and ebullient man, Mr. Ford personally owns 6.3 million Ford shares, making him the company’s largest individual holder. The extended Ford family as a whole, which reasserted itself five years ago when it led the ouster of Jacques Nasser as chief executive and replaced him with Mr. Ford, owns all the shares of a special class of supervoting stock, giving it 40 percent control of the company. Ever since Mr. Ford assumed Mr. Nasser’s mantle, there have been doubts, some only thinly veiled, among analysts, investors and employees that he has the chops for the job.


Finger pointing, weak character
BUT while Mr. Ford has partially streamlined Ford’s bureaucracy and become its public face during his tenure, some of his instincts have not born fruit. A devoted environmentalist, he still bowed early on to the wishes of Ford’s entrenched middle managers and senior executives who wanted the company to keep churning out very profitable but gas-guzzling sport utility vehicles and pickup trucks during a period when oil prices were dirt cheap.

Too family oriented
As the entire American auto industry comes to grips with challenges that threaten to permanently eclipse its dominance at home and abroad, and as uncertainties about Ford’s future stir anxieties within his family, Mr. Ford asserts that he and his company are responding to the monumental shifts that are shaking the foundations of his business.

Lack of definition.
Not fast enough, say some. The stark reality, which Ford as well as General Motors need to accept, analysts say, is that the companies’ fates now hang in the balance.
“Both these companies could fail,” said John Casesa, a veteran auto industry analyst who runs his own consulting firm. “That’s how fundamental the problems are in Detroit.”

No salary and poor jugement.
Mr. Ford will need that firmness of mind if he intends to preserve three things he says are of paramount importance to him at Ford: the company itself, his family’s legacy and a clean environmental record. He has foregone a salary over the last year and said he intended to keep it that way until he successfully revived Ford’s fortunes.

B.S. and camouflage.
As Mr. Ford watches G.M. entertain a potentially historic alliance with a French automaker, Renault, and a Japanese automaker, Nissan, he says he will not rule out a similar path for his company, which already has management control of another Japanese auto company, Mazda. But Mr. Ford said he had more pressing concerns. “Regardless of any deal that we might envision,” he said, “the fact is that we have to fix our North American business.”

Ford now one man show.
The company’s North American operation is hamstrung by lackluster product lines, heavy losses that have delayed new vehicle development and, until recently, constant executive turnover that forced underlings to wait until new bosses came on board. Mr. Ford has to tackle all of these problems while overseeing a potentially backbreaking combination of jobs.
MR. FORD said his biggest challenge is time management, as well as a constant switching of corporate roles. In one moment, he occupies Ford’s conceptual role as chairman; in the next, a strategic role as chief executive; and in the next, the nitty-gritty management role of overseeing daily operations. “I can’t delegate to anybody,” he said.

Finger pointing blame
Associates say Mr. Ford endured years of condescending behavior by subordinates who considered his wealth and interest in social causes no match for the years they had toiled in the company’s trenches, even though Mr. Ford himself spent more than 20 years in a variety of lower-level jobs. They also say that other executives, who spent as much time managing their careers as they did managing the company, saw Mr. Ford as a roadblock to the top and tried to undermine him. Yet, others see these complaints as excuses for actions that Mr. Ford did not take.

Lack of proper strategy and hesitation.
Mr. Ford vowed to slow and then reverse the company’s market-share slide and to return to profitability by 2008. Yet much about his approach remains unclear, particularly where his devotion to the environment is concerned. Although Ford has promoted its commitment to hybrids in television commercials featuring Kermit the Frog, last month it backed off plans to build 250,000 hybrid vehicles a year by 2010. Instead, Ford said it would double the number of flexible fuel vehicles it produces, to two million a year by 2010, while continuing to develop hybrid vehicles.
It was the second time during Mr. Ford’s tenure in the senior ranks that the company had reneged on an environmental promise. In 2000, when he was chairman, it pledged a 25 percent improvement in the fuel efficiency of its S.U.V.’s by 2005. But the effort was set aside in 2002, because Ford did not have the technology to achieve it, Mr. Ford told shareholders in an environmental report.

Lack of vision
Ford’s lineup includes two hits: the Mustang and the Fusion, one of three midsized cars that the company rolled out in the last year. Thanks to this pair, Ford’s car sales are up this year even though its overall sales and market share are down from 2005, continuing a decline that began around the start of the decade. Ford’s overreliance on pickup trucks and S.U.V.’s has hurt it. The latest version of the Explorer, long its best-selling sport utility, made its debut last fall just as gas prices began soaring; sales of the vehicle have slumped.
But most of Ford’s new cars are less distinctive. Embracing a trend started by Toyota in the mid-1990’s, Ford is rushing to bring out more crossover vehicles, like the Edge, an S.U.V. built on a standard automobile platform. Analysts say those vehicles are by nature utilitarian and likely to inspire little lust in buyers’ hearts.

No plan structure.
“There is no evidence of a huge product offensive,” said Stefano Aversa, chief operating officer at Alix Partners, a firm that specializes in corporate restructuring. “I’ll be pleasantly surprised if I see 10 new products. I don’t see any of them coming yet.”

Move to equal or expect customers anticipation and satisfaction.
Ford also has to overcome a reputation for turning out merely serviceable products, said Brian Moody, a road test editor at Edmunds.com, a Web site that dispenses car-buying advice. Vanilla-flavored cars might work fine for Toyota, which honed its reputation for quality over decades, and a conservative approach might have been acceptable in an earlier era, when Detroit companies dominated the American market, he said. But with Detroit’s market share reaching all-time lows, Ford needs to exceed customers’ expectations in order to keep up with Japanese and Korean carmakers, which are increasingly attracting Ford’s loyal, largely middle-class customers.
“If the car isn’t good, if the truck isn’t good, people aren’t going to buy it just because it’s a Ford,” Mr. Moody said.

Time should be more structured.
“There should be signals,” Mr. Aversa said. “When things go well, you can take your time and plan for the long term. But when things go rough, you have to execute and do things with a sense of urgency.”
Last week’s dividend cut may be one such signal, but whether the Way Forward is the plan and Mr. Ford the right executive to carry it out remain topics of debate among analysts. “Either you intensify this plan and look at the whole business model brutally or you get someone else to do the job,” Mr. Casesa said.
For his part, Mr. Ford said he heard the clock ticking, aware that his family’s legacy was in danger of slipping away with every passing second. “I’m impatient, too,” he said. “I have no patience for wasting time.”