- The Washington Times - Monday, June 16, 2003


F ord Motor Co., which turns 100 today, has rarely seen such trying times. As it starts its second century in business, Ford’s stock price sits at around $10 a share, $20 below where it was four years ago. Foreign automakers threaten its market share, adding new models and manufacturing capacity in North America.

One respected analyst says Ford could be forced into Chapter 11 bankruptcy within a decade.

Chairman and Chief Executive Bill Ford Jr. remains upbeat. In a recent interview with national automotive journalists, Mr. Ford said his job has been brutal, but he’s confident the company is on track to return to a profit.

Mr. Ford, the great-grandson of founder Henry Ford, said he and other senior managers are planning beyond the restructuring now under way. But the key for now is to remain focused on cutting costs and producing high-quality vehicles, two areas where the company struggled not too long ago.

Some analysts say Ford must emerge even leaner from its turnaround effort, now 18 months old. Mr. Ford acknowledges that he’s not as concerned with keeping the title of “world’s second-largest automaker” as he is with running a company that’s competitive and profitable.

“No one gives up anything willingly, but I think we’ve seen in the past that being big isn’t necessarily best,” Mr. Ford said. “I’m much more concerned with us doing everything well and being seen as doing everything well.”

Mr. Ford considers the fundamental business much unchanged from the days his great-grandfather ran the company in the ‘20s and ‘30s: Assemble vehicles in factories, and sell and service them through a network of dealers. But it’s hard to believe that even a visionary like Henry Ford could have imagined the scope of today’s industry.

Ford Motor Co. has grown from a business started with $28,000, some tools and a few designs to a $163 billion global enterprise with 350,000 employees. The company that began with 10 employees assembling cars in a converted wagon factory in downtown Detroit operates in more than 200 markets on six continents.

Henry Ford changed the business forever when he developed the assembly line in 1913. His love was the Model T, which he considered the perfect car and helped make motoring accessible to the masses. Not much for styling, he might flip if he saw some of the notable vehicles Ford has produced: the Lincoln Continental, Thunderbird, Edsel, Mustang, Pinto and Explorer among them.

In 2003, Ford is coming off two years in which it lost a total of $6.4 billion, faced the disastrous Firestone tire recall and ventured into a variety of consumer services that analysts say took its focus off the core job of producing cars and trucks.

Despite Ford’s slumping stock price, an uninvited takeover would be nearly impossible because of the way the family established its ownership stake when the company went public in 1956. The family controls a 40 percent voting stake through its ownership of special Class B stock.

Since replacing the ousted Jacques Nasser as CEO in October 2001, Mr. Ford has concentrated on slashing expenses and beefing up the product offering.

Mr. Ford’s goal is to improve profits by $9 billion by mid-decade, and part of that effort is to trim expenses by $500 million this year.

But skeptics remain.

UBS Warburg analyst Saul Rubin says either Ford or rival General Motors Corp., the world’s largest automaker, could go into Chapter 11 bankruptcy in the next five to 10 years because of heavy debt and dwindling opportunities.

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