Ford just announced today that it's "Way Forward" restructuring plan will eliminate 30,000 jobs and close 14 plants.
It might better have been called "The Way East" plan, for despite shrinking market share here in North America, both Ford and GM had an outstanding year in China. The Geely 71751 CK exhibit and Ford's -- as well as GM's -- success in China, appear to me, at least, to be the handwriting is on the wall -- unless arrested by political events -- that more and more parts and eventually finished cars sporting Ford and GM badges are going to be "Made in China".
But moving to cheap labor markets is hardly the kind of innovation that Bloomberg columnist Doran Levin said Ford needs to implement or "die". Long ago, I suggested -- somewhat tongue-in-cheek at the time -- that Ford ought to consider building wind turbines, in part to offset the greenhouse gas emissions of its SUVs and pickups. In the current light, the idea isn't all that outlandish. Consider that during the Second World War, Ford converted its plants to building everything from Jeeps to B-24 bombers.
But just building cheaper cars isn't going to solve beleaguered U.S. car company problems. Someone else will always build them for less. If and when Asian labor costs get too high, there's always impoverished Africa.
So, maybe its time to start thinking beyond the automobile. Writes Friedman, "green energy-saving technologies and designs - for cars, planes, homes, appliances or office buildings - will be one of the biggest industries of the 21st century."
When it comes to innovation beyond the car factory, Honda has to be the model. Besides cars, it builds off-road vehicles, motorcycles, boat motors, generators, robots, corporate jets and now its getting into solar photovoltaic. Toyota even has a home building unit in Japan.
For a company like Ford -- or GM -- that kind of innovation won't be easy, of course. Old Henry Ford tried to break into the emerging technologies of his time, with little lasting success. Douglas DC-3s made Ford Trimotors obsolete, and Ford farm tractors didn't keep pace with the national shift away from an agrarian society to a suburban one after World War Two. There were fewer, but larger farms requiring ever-bigger machines. The 160 acre, quarter section farm, for which the Ford tractor was ideal, was gradually becoming a thing of the past.
Neither Ford nor GM have the financial resources to make many more missteps. This much seems certain, the age of the highly-profitable, fuel-hungry SUV is past. Ford's new cross-over Edge is designed around that assumption. It's Reflex diesel-electric hybrid concept car also strongly hints at the direction of its strategic thinking.
People and goods will always need to get around safely, quickly and affordably, but given the profound shifts that a post-petroleum world will force on the world in the 21st century, Ford's future may lay beyond the legacy of Bill Ford's great grandfather, who experimented with hemp-based body panels and rubber extracted from goldenrod.
Instead of "Quality Is Job One", Ford's new motto is likely to be "Innovate or Die".