What Does A
Failing Company Have To Do To Impress?
bloated, money-losing, overcommitted, market-share-losing dinosaur
companies just can’t impress anyone. Poor Ford.
What is a
bumbling behemoth supposed to do, exactly? It announces plans to “idle”
upwards of a dozen plants. It eliminates its five-cent-per-share
dividend. It gives the boot to 10,000 white-collar employees. It decides
to offer buyouts to every single one of its 75,000 hourly
employees. The whole thing is designed to save $5 billion by the end of
So. Is Wall
Street impressed? Are you kidding? The Ford family owns the Detroit
Lions, you know. You think Lions fans get excited every time a new coach
or quarterback is introduced? Did you hear the one about the Lions fan
who couldn’t sell his two tickets, so he left them under his windshield
wiper and went for a walk? When he returned, there were four tickets.
has had it up to here – look way up – with Ford and its
restructuring, retooling, really-the-disaster-is-over-this-time plans.
Merrill Lynch shoved Ford over from a “neutral” to a “sell.” Goldman
Sachs declared itself skeptical that a smaller Ford would do any better
than the big, dumb Ford we’ve all come to know and, well, know – and
said it would make no sense to invest in it.
David Healy of Burnham Securities gauged the likelihood that Ford would
be able to please investors with any plan whatsoever as “basically
What’s with these analysts?
it could be this: Ford announced as part of its restructuring blueprint
that it would next be showing a profit in 2009. That’s management’s
projection. You know management. They’re the ones who give you the rosy
scenarios. Even they don’t see the company making money until the first
year of the Barack Obama administration.
Ford! Maybe we’ll make money some day. At least we would have some of
And in the
meantime, while they’re not making money, that means they’re losing
money. How much? They’d rather not say. I bet. They’d rather not think
about it, either. They might lose a little less money if they were
willing to sell the major money-losing division known as Jaguar, but
that option is not on the table.
the analysts groan. Granted, quite a few of them probably drive Jaguars,
but buying the car is one thing. They wouldn’t touch the company that
makes them with a 10-foot pole.
guessing a pretty good percentage of those 75,000 hourly employees are
starting to feel the same way. These are folks who have gotten
accustomed to good wages, incredible benefits and generous vacation
packages, all courtesy of union negotiators who know when they’re
dealing with a company that will do absolutely anything to achieve labor
does it do you to be making a great wage and great benefits from a
company that has basically told you, “We can’t afford you anymore, so
what will it take to get you to leave?” The company hasn’t disclosed the
nature of the buyout offer, but what if all 75,000 hourly workers
decided to take “Ford’s” up on its offer and skedaddle?
saving serious money! You no longer have to pay any wages. Of course,
you still have to pay all the overhead on all those buildings you idled,
and you still have to pay all your white-collar people and middle
management, and you still have to pay your marketing department, and you
still have to pay your lawyers, and you almost certainly have to
continue paying health benefits to all 75,000 of your recently departed
only way you can get money to pay for any of this is to sell cars. And –
oops! – there’s no one left to build them for you. You just paid them
all to leave.
to believe Wall Street isn’t impressed by this company. Next
thing you know, they’ll be finding fault with General Motors.
© 2006 North Star
Writers Group. May not be republished without permission.
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