In turn, Mr. Ford has looked to what is tantamount to a political solution to resolve his own cognitive dissonance (i.e. the love-hate quandary mentioned above). As many political leaders believe socialism and capitalism can be blended to form a more perfect nation, Bill Ford feels that having Ford Motor Company adopt Green Socialist dogma will somehow transform Ford Motor into a company “with the best set of social values.” In turn, Mr. Ford believes this appearance of “social responsibility” will somehow help Ford Motor sell more vehicles. Indeed, this company has become nothing more than a “third-way” corporate experiment to satisfy Bill Ford’s social conscience.

My assertion that Bill Ford is a Green Socialist is supportable. First of all, please be aware that he served as the chairman of Ford Motor Company’s Environmental and Public Policy Committee from 1997 until 1999, when he became chairman of the board of directors for Ford Motor Company. Upon becoming chairman of the board, Mr. Ford launched his “green revolution” under the nebulous guise of “corporate citizenship.” Under Bill Ford’s direction, Ford Motor undertook the following initiatives:

1. Environmental Management, which includes the following:

     • Climate change/global warming initiatives
     • Protecting and renewing ecosystems infringed upon by Ford Motor’s office

     • Developing uses for recycled materials in Ford’s vehicles
     • Cutting water use in manufacturing
     • Reducing the use of “chemicals of concern”

2. Protecting human rights
3. Increasing diversity within Ford Motor Company
4. Contributing to a safer and healthier world

All of the above-mentioned information can be found in Ford Motor’s “2000 Corporate Citizenship Report.” Clearly, Ford Motor’s leftist initiatives reflect William Clay Ford’s “greenness.” However, the following quote from Mr. Ford should remove all doubt:

I believe there is now more than enough evidence of climate change to warrant an immediate and comprehensive — but considered — response. Governments will have a role to play in the change process. I’m not dismissing global treaties and their potential to generate action, but I believe there’s a better way. Transparency, stakeholder engagement, and accountability with real performance measures and standards will be the real regulatory tools of the 21st century, and consumers will be the real regulators.

Before delving into these costs, let’s look at how Mr. Ford is melding capitalism with self-imposed accountability to the Green movement. The following quote, from the 2000 Corporate Citizenship Report, was penned by Mr. Ford himself and reflects his faith in his own “third-way” philosophy of corporate governance:

Discussions about business tend to fall into two categories. Most rely on the obvious financial indicators, gauging success in ways that have been in use for most of the last century. Nearly all of these standard indices look backward at what has been achieved.

A small but growing approach to assessing business focuses on corporate responsibility, or citizenship, gauging whether or not a company is meeting new, broader definitions of its roles and responsibilities. This view relies heavily on openness, transparency, and engagement with outside stakeholders to determine whether or not a company is meeting these new expectations. It can identify emerging marketplace issues because it involves dialogue about expectations and potential along a wide range of issues. It looks forward at what needs to be done.

The differences of these approaches are apparent in many ways. For example, financial markets have difficulty measuring the economic value of citizenship efforts. The absence of effective measurement tools can lead them to discount these issues. And, while activists are beginning to see that a company’s financial performance is critical to citizenship efforts, there is a tendency to say that a focus on shareholder value means the company is pursuing profits over principles.

Our corporate citizenship report is an attempt to address these evolving standards of conduct. It adds measurement mechanisms for corporate citizenship to the more established measurements of corporate finance. The next step is to merge these two methods of examination because, from my perspective, there is danger in separation and opportunity in connection.

However, at Ford Motor Company, it isn’t called “third-way experimentation,” it is called “sustainable capitalism” (I’m not kidding, just read 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. In an October 4, 2001 msnbc.com article, Ford Motor Company admitted that its production costs per vehicle “have 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.” Ford Motor’s representative goes on to blame these higher costs on write-downs of e-commerce initiatives and growing costs of sales incentives and other marketing initiatives. These explanations are simply not believable considering that Ford’s competitors are heavily engaged in competing for customers via the very same sales incentives and heavy promotions that Ford is blaming for its own uncompetitive cost structure. A key to Ford’s loss of a competitive cost structure can be attributed to the expensive third-way initiatives mandated by Bill Ford himself.

Ford’s high cost structure is particularly alarming considering its fragile financial condition as reflected in its June 30, 2001 10-Q. The following points illuminate several disturbing financial weaknesses:

A. Working capital stood at a $8.06 billion deficit.
B. Ford had 36 cents of cash and marketable securities for every dollar of

Quite frankly, Ford Motor does not have a balance sheet that will survive a recession. Granted, on October 22, 2001, Ford “priced” a $9.4 billion bond offering, which should improve working capital and cash flow. Nevertheless, this is still tantamount to rearranging the furniture on the Titanic.

By now, it should be obvious that Ford Motor Company is a lemon of a company. Perhaps it is more appropriate to describe Ford Motor as a watermelon of a company, just like the Green Socialist at its helm. In other words, Ford has become “green” on the outside yet is now “red” in the inside. Perhaps all of Ford Motor’s cars should have this color scheme as a tribute to Bill Ford’s third-way business experiment; that is, turning green money at the top-line into red ink at the bottom-line. Ford has lost $385 million through September 30, 2001.

Unless Ford Motor can eventually access the U.S. Government’s printing press through a third-way bail out, Bill Ford will preside over one of the world’s most spectacular bankruptcies. At this point, the heat Mr. Ford will be feeling will not come from that environmental bogeyman called global warming, it will come from shareholders and creditors. Don’t let the October 30, 2001 removal of Jacques Nasser fool you; Bill Ford and his Green Socialism will be the culprits behind Ford Motor Company’s demise. 

Mr. Eric Englund, earning a MBA from Boise State University, is a surety bond underwriter in Bellevue, Washington, USA. Ole Bear met Mr. Englund through the email, after the Ole Bear had read Social Decay and the Federal Reserve at www.lewrockwell.com. Mr. Englund writes essays and analyses that cover a wide range of subjects in his Renaissance Global Markets Research, based on his education, geographic location, bond underwriting, and knowledge of the global markets. The Ole Bear is very proud to present "The Internet Collection" of Mr. Englund's work to date, on this special homepage here at www.pgtigercat.com.
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MONEY: Ye shall have honest weights and measures, by James E. Ewart.
Creature from Jekyll Island, by G. Edward Griffin
The Law, by Frederic Bastiat
Financial Terrorism, by John F. McManus
Money and Freedom, by Hans F. Sennholz
The Mainspring of Human Progress, by Henry Grady Weaver
Masters of Seduction, by Jeri Lynn Ball
What Does Mr. Greenspan Really Think? by Dr. Larry Parks