Comments on: Penny pinching at Ford?

By: Don't sacrifice security for frugality

Don't sacrifice security for frugality — Fri, 27 Mar 2009 16:42:33 +0000

Sacrificing security in the name of frugality seems like a dumb trade-off. While you may question whether there should be actual security concerns for a particular person in question, let’s not downplay security as somehow contradicting stated intentions of frugality. After all, if your child were traveling to a big city, would you rather have him/her pay more to stay in a nicer hotel in a safer part of town, or have him/her save you some money by staying in a cheap motel in the downtrodden part of town?

And, yes, the company may be selling the company plane, but they can still hire private jets to fly someone around. Ever hear of NetJets? A lot of companies (and individuals) that don’t have their own planes use these kinds of services for private travel, which I think can be justified. No reason to have your Chairman, CEO or CFO stuck sitting by the gate waiting for a delayed flight, or having to rearrange their schedules if a flight is canceled, when they could be conducting business during that time.

By: Sonya Hubbard

Sonya Hubbard — Thu, 26 Mar 2009 20:56:36 +0000

Mr. Monty: Thank you for the clarification.

Mr. Duprey: We concur with your wish for Ford’s ultimate success.

By: Rich Duprey

Rich Duprey — Thu, 26 Mar 2009 20:05:22 +0000

Mr. Monty,

While you are indeed correct that the press release says that Mr. Mulally would work for $1 a year if Ford should have need to access the government line of credit, it was couched in a bit of obfuscation. The exact sentence runs thus:

“In addition, Ford CEO Mulally announced that, should Ford need to access funds from a potential government bridge loan, he would work for a salary of $1 a year – as a sign of his confidence in the company’s transformation plan and future.”

If Ford needed to tap that line of credit, then that would mean its “transformation plan” wasn’t working out all that great so I’m not quite sure what sort of show of confidence that would offer.

Our business is falling apart, we had to relent and take cheap government financing, but our boss is going to work for just $1 a year to show things are going great! I’ll assume that if Ford does have to borrow the taxpayer’s money, Mr. Mulally will be returning whatever salary he had been earning to the company.

So, yes, Ford is doing as it said it would, but let’s also agree that the additional verbiage at the end clouds the issue. A true show of confidence in turnaround plan would have had Mr. Mulally working for $1 from the get-go without the need for any ambiguity.

With that said, I hope Ford continues to build on its strength and ultimately succeed.

Rich Duprey

By: Scott Monty

Scott Monty — Thu, 26 Mar 2009 18:49:09 +0000

FYI, the $1 salary was promised only if Ford had to take government loans. To date, the company has not done so, nor is it our intention to do so unless there’s a catastrophic event in the industry or the economy worsens.

Scott Monty
Global Digital Communications
Ford Motor Company

By: Sonya Hubbard

Sonya Hubbard — Thu, 26 Mar 2009 18:38:36 +0000

I wasn’t suggesting that Messrs. Mulally or Fields travel by car. In fact, there are options to travel by air that do not require either private jets or first-class airfare.

However, the larger point is that Ford’s PR spin (that it has become a frugal company) does not square with how it continues to spend its money. That point seems especially relevant when a company seeks wage concessions from employees and stops contributing to their 401(k) accounts in the name of “necessity.”

By: JimBob

JimBob — Thu, 26 Mar 2009 16:29:21 +0000

You need to listen to what Warren Buffett (you know, the great flagrant spender) says about the use of corporate jets or chartered flights. When you are a CEO of a company and you make $x million per year, do you think shareholders (who own the company) really think he/she should be wasting their time by traveling in a car? Granted, I don’t care about his family or why they should ride in the jet or why he should be flown to his home in Florida, but it is very shallow to think that someone who leads a billion dollar company, in any industry, should have to waste their time thumbing for a ride.