Newcomer Mulally to Drive a Streamlined Ford News that Ford Motor Co. will close 16 plants and drastically reduce its workforce comes shortly after the arrival of former Boeing executive Alan Mulally as the carmaker's new president and CEO. Can Mulally work wonders at Ford?
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Newcomer Mulally to Drive a Streamlined Ford

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Newcomer Mulally to Drive a Streamlined Ford

Newcomer Mulally to Drive a Streamlined Ford

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This is WEEKEND EDITION from NPR News. I'm Scott Simon. Coming up: want to improve your performance? Hold the oxygen.

But first, Way Forward is what the Ford Motor Company calls its restructuring plan, which calls for shrinking the company way down. The automaker is offering all 75,000 of its assembly line workers buyouts in an attempt to cut costs. Ford also plans to close 16 factories in the United States and Canada by 2012. The company's announcement comes after similar cutbacks at its chief rival, General Motors.

Our friend from the world of business, Joe Nocera - writes a column for the New York Times - joins us from member station WFCR in Amherst. Joe, thanks for being with us.

Mr. JOE NOCERA (Columnist, New York Times): Thanks for having me, Scott.

SIMON: Any time a company has to offer buyouts to 75,000 people, is that - is that an admission of defeat?

Mr. NOCERA: Oh, defeat's a little strong. And obviously they don't want all 75,000 to take the buyouts, because if that happens they have no workforce left. Basically General Motors, Ford - and I'll bet you that Daimler Chrysler will be heading in the same direction shortly - are all coming to terms with the fact that their labor costs are way too high and they make too many cars that don't make money. And we are at a point now where they are losing so much money - Ford was probably going to lose nine billion dollars this year - that the situation's become untenable. And the real question now is whether these companies that are being slimmed down will in fact be able to turn a profit three or four years from now.

SIMON: And what does that entail? I mean, some people have been very nice to give Ford free advice and most of it boils down to don't try and sell so many models of cars; concentrate on making a breakthrough with a few.

Mr. NOCERA: Well, the big U.S. auto companies have been able to postpone their day of reckoning by having two profitable forms of vehicles. One is trucks and the other is SUVs. They've basically been losing tons of money on passenger cars. That was always a losing strategy, ultimately. And now that the price of gasoline is three dollars, or thereabouts, suddenly, you know, SUVs are a losing proposition for many consumers.

And so the answer is not only do you have to slim down and not only do you have to acknowledge the reality, but also you're going to have to build cars that speak to the marketplace. You know, fuel efficient cars, smaller cars: all the stuff that Detroit turned its back on a decade ago, now they need to come back to.

SIMON: This company's chief executive officer, Bill Ford, Jr., stepped aside two weeks ago, and the new CEO is Alan Mulally, who comes from Boeing, which obviously is not in the auto industry. What does he bring to this position?

Mr. NOCERA: Well, first of all, it's so rare that someone outside of the auto industry becomes an auto industry chief executive. It never happens. So the first thing he brings is a signal to the world, and to the Ford labor force and white collar workers, that this is going to be different this time.

Mulally has been a terrific head of the aircraft division at Boeing. And the truth of the matter is he brought Boeing itself back from the brink five or six years ago when it was in terrible trouble. It needed to completely rethink the way it built aircraft and it needed to design an aircraft that customers wanted. And son of a gun, that's what he's done.

The problem for him, Scott, is Ford is already in terrible trouble. He's walking into a very, very difficult environment. And so, you know, the question is, can he get up to speed fast enough or has the train already left the station?

SIMON: Why is it so hard in this day and age of focus groups for a major American automaker to come up with a car that a lot of Americans want to buy?

Mr. NOCERA: That's a good question. One classic example, Scott - and this is actually worth, really worth thinking about - Bill Ford views himself as an environmentalist. If Bill Ford had stuck to his environmental guns and said, we want to be out front in hybrids, they might not be in the position that they're in today.

SIMON: Joe Nocera, business columnist for the New York Times, speaking with us from Amherst. Joe, thanks very much.

Mr. NOCERA: Thanks a lot, Scott.

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