Wednesday, November 18, 2015

FORD IN SERIOUS TROUBLE: CONTRACT IN JEOPARDY

Louisville Politics - It appears that Ford UAW members will vote DOWN the contract offer from Ford. At the very least it will be one of the closest contract votes in history at worst. Currently the vote sits at roughly 52% - 48% against. Here in Louisville the numbers are even worse and that is the one thing Ford could not afford.

Ford is in serious trouble. Again.

As everyone knows by now Ford is embroiled in federal investigations that they have worked very hard to keep quiet. Unfortunately for them, I am not a quiet guy so they have been exposed anyway.

Anyone who has ever worked a union job understands one simple thing. In contract years, consumers get nervous and that creates a short term problem for an auto manufacturer. How do you maintain market share, that you need to pay the new contract obligations, while the consumer is now questioning the quality of your product?

It is always a tight rope.

Last quarter Ford had great sales and that is normal in a contract year. Consumers who want your product will typically buy it BEFORE the contract negotiations start. It is not unusual to see a spike in sales in the period prior to the negotiations.

Why? Simple really.

Consumers do not want to take a chance on quality problems. Right before contract negotiations start a typical auto purchaser thinks that quality will be better because employees will be driven to put out the best product they can to justify their contract requests. There is much truth in that assumption.

As a former Ford employee I can tell you firsthand that while Ford uses the slogan that "Quality is Job 1," trust me that isn't exactly the normal case, but it most certainly is when it is time to discuss contracts.

When a company is in fear of having a contract turned down the consumer typically believes that quality will suffer because employees are angry, and no one wants to buy a car from someone whose employees are angry, they worry about quality.

Trust me they should.

I could write a book about what really goes on inside the Ford manufacturing plants that would make everyone worry, I may do it anyway, but not yet.

However, Ford now has a two pronged problem that will hurt them long term and they may never fully recover.

They have faced unrecoverable problems in the past, and still haven't apparently learned. I briefly touch on Firestone in this article, Firestone is a great example of what happens when people begin to question your integrity and your product. Ford should have learned from that but have not. The Firestone debacle almost put them out of business and they apparently learned nothing from it.

Greed, arrogance, and egos are the downfall of many and Ford is no exception..

Their two pronged problem now is this:

1. With multiple federal investigations ongoing regarding alleged insider trading, potential collusion in a cover up that may include Mayor Greg Fischer and Reverend Kevin Cosby, also including a potential cover up by the Ford family itself, Ford messed up. They have worked overtime, and spent countless dollars, trying to to keep it quiet, but have been unsuccessful. It makes consumers question their integrity and their truthfulness. After all if you believe someone lied about one thing, why would you believe  they wouldn't lie about another?

Spending thousands of dollars on a vehicle is one of the most serious purchases you will ever make. You must have faith that the quality of the product is above reproach. When the manufacturer has questionable integrity and their ethics are suspect, do you trust them to follow through on the promise of a quality product? You have to believe that the manufacturer is truthful.

After Firestone, Ford lost major market share and that market share dropped from about 25% to about 15% overall. 40% of their market share gone, almost overnight. It is a market share they have never recovered from. That cost them billions.

Additionally, Ford's lies about not taking government money during the crisis are exposed as well. They really don't have a great track record of truthfulness to a lot of people, myself included.

2. With all the trouble trying to get this contract passed, most people see this as a major problem between the company and the employees. How does quality suffer? Most know that when an employee isn't happy they don't do as good a job as when they are. The smallest mistake can lead to maximum damage when you deal with manufacturing cars. Consumers have a right to question quality in that situation, and rightfully so.

Ford asked the UAW employees for concessions and they gave them, when Ford needed it. They were supposed to be temporary, but now that Ford is making record profits they expected to get those concessions back. This contract does not do that.

I could bore you with details, and may later, but based on a surface glance at this proposal, the UAW has a right to be angry. Ford shorted them by up to $2.3 Billion over a 4 year contract period, by my own calculation admittedly, and that can never be acceptable.

Ford in my opinion does not understand a basic concept that most understand and live by.

Don't bite the hand that feeds you. The arrogance and egos are what hurts the Company and that will play out once again publicly. Once again jeopardizing market share and jobs.

Ford's problems are always self inflicted because their integrity is always in question. They have never learned that integrity and honesty are what matters most, and it will haunt them once again. Just as it has through Firestone, countless prior recalls, and more to come soon,

The federal investigations that are ongoing are one more example of that.

Instead of doing the right thing and treating former Ford employee Jay Morgan fairly, they chose to begin a game that led to their potential downfall. This game allegedly includes our own Mayor Greg Fischer and Reverend Kevin Cosby.

To what extent the feds will find out. They always do.

In the meantime, rumor has it that while Louisville UAW members were set to vote on the contract Tuesday, Ford legal staff showed up in Louisville Monday and stayed overnight at the Seelbach for clandestine meetings. Rumor also has it they met with Greg Fischer and company before flying back Tuesday.

Ford officials would not be caught dead near a plant that is voting on a contract. They know better.

So if the rumors are correct, Ford was more concerned about the investigations going on than that of the employees they depend on to keep them rich.

Wonder why the UAW members are so angry?

Ford continues to show them that they simply don't care about them. They have ignored them. Employees have proven their loyalty by giving back when it was asked of them. Ford has shown they simply don't care. At the same time, Ford has jeopardized jobs because of their arrogance and ego trying to destroy one man.

Whatever happens, it is the fault of Ford, and Ford alone.

Don't worry folks there is much more to fill you in on. Stay tuned.................


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