Tuesday, September 05, 2006

Ford CEO Bill Ford steps down, retains chairmanship

Bill Ford, current CEO and Chairman of Ford Motor Company, has decided to step down as Ford's CEO. He will maintain his position as Chairman. Alan Mulally, former EVP / President at Boeing, will become president and CEO of the poorly-run Ford.

It's about time. Bill Ford has overseen a total disaster while heading Ford. Now, it's not all his fault. But every time there is a problem of the magnitude that Ford, and Chevy and Chrysler, has experienced, it can be attributed to management: Lack of vision, foresight, or planning, or stupidity.

I don't know which it is in this case (probably a few of the above, if not all), but clearly Ford lost its way. Unfortunately, these "cyclical" businesses always experience tragic lows before management figures out what to do to get back in the game. I think these businesses are cyclical in part due to management losing its way, rather than just the economy.

If I were to tell you that in 4 years, there would be a protracted recession, wouldn't it behoove you to plan for it? Or, like the automakers, would you continue your wayward path? If I were to tell you that oil would spike from $12 to $70, would that not make you think that big honkin' SUVs were a bad business to plan your entire company strategy around?

I know, these things aren't entirely predictable, at least in terms of timing. But one thing we know: External events, like oil supply and demand increases and/or decreases, occur periodically, as do booms and busts. And the longer a boom goes, or the longer that a bust doesn't manifest itself, the worse the resulting bust will be, sometimes in terms of severity, sometimes in terms of duration, sometimes in both.

Every business leader with the financial enormity of a Ford or General Motors should be hog-tied and dragged about town when they cry about their plight. They could see it coming. And they should have planned for it.

It's becoming clearer that big business really is like the government. When things are going great, there's beer and wine running down the street. Don't save anything. We've repealed the business cycle. But when the shit hits the fan, "Oh my God, please bail us out! How dare OPEC raise prices."

The calamity. The horror. Just shut up and run your business as if it mattered.