The Competitive Enterprise Institute’s Steven Milloy has just published another great column. In “Green CEOs Bad for Business,” Milloy singles out the two worst corporate executives in the here and now: Bill Ford – who was just dumped, this week, as Ford’s CEO – and John Browne of BP. Both Browne and Ford actually despise the products they churn out. Or rather, they play to the environmentalists while they publicly denounce their respective companies and the market roles they play. The anti-SUV and anti-consumerism hooks played by Ford may have created the perception of good public relations, however, it was disastrous for the business overall as Ford decimated shareholder value continuously while he ran the company.
Ford’s entire reign was disastrous and ill-advised. Eric Englund, in fact, had him nailed long ago when he stated that Mr. Ford’s green policies were the very antithesis of what his shareholders had the right to expect. As Eric points out:
To me, it is mind-boggling that Ford Motor Company’s board of directors has allowed Bill Ford to take Ford Motor Company down this bizarre “green” path. Perhaps he has the board of directors buffaloed into believing that eventually Ford Motor Company will be richly rewarded for being on the leading edge of “sustainable capitalism” (a term you will find on page 11 of Ford’s 2000 Corporate Citizenship Report). I will go on record right now stating that Bill Ford’s third-way management philosophy is not only unsustainable, it is incompetent and will lead to Ford Motor’s financial ruin.
As mentioned earlier, Bill Ford’s third-way initiatives do not come without real costs. Here is a concrete example. In an October 4, 2001 msnbc.com article, Ford Motor Company admitted that its production costs per vehicle had “â€¦ballooned an average of more than $1,000 a vehicle over the past five years, while product quality has plunged far below that of rivals.” An uncompetitive cost structure and poor product quality can put a company at a competitive disadvantage. Not surprisingly, during each of the three fiscal years (2002, 2003, and 2004) Mr. Ford has been CEO, Ford has lost money in its automotive operations.
I like Eric’s reference to Ford Motor Company’s 2000 Corporate Citizenship Report, wherein Bill Ford alluded to Ford Motor Company’s prospects of being richly rewarded for being on the leading edge of “sustainable capitalism” (a term actually used in the report). And since Eric wrote the article in 2005, Ford has continued along its calamitous downhill slide.