Brazil is road map for U.S. rebound

Bryce G. Hoffman / The Detroit News

SÃO BERNARDO DO CAMPO, Brazil -- If Ford Americas President Mark Fields seems overly confident when he talks about the company's turnaround plan, it's because he has already seen it work -- in Brazil.

The Way Forward plan Fields unveiled last year in Dearborn is an outgrowth of the restructuring plan Ford Motor Co. developed to save its Brazilian operations. Five years ago, Ford was on the brink of pulling out of South America's most important market. Instead, it closed factories, bought out workers, consolidated its dealer network and launched a stream of home-run products.

Today, Ford has doubled its market share and become one of the most profitable automakers in Brazil. Its products are lauded by the local auto press and loved by consumers. Its biggest problem now is that its factories cannot keep up with the surging demand for its cars and trucks.

"It is essentially the same plan that Mark and the team have laid out for North America," CEO Alan Mulally told The Detroit News.

Said Fields: "It shows it can work."

Brazil's way forward

For much of the last century, Ford was a market leader in Brazil. But the 1980s brought a surprise invasion by overseas competitors -- in this case from Europe. The effect was the same as when Japanese automakers arrived in the United States. Unprepared and reliant on aging factories, Ford was pummeled by the newcomers.

As it lost market share, Ford sought help from another longtime South American manufacturer -- Germany's Volkswagen AG. In 1986, the two companies combined their South American operations to form Autolatina, but the alliance fell apart in 1994, the victim of clashing cultures.

Ford emerged from the Autolatina debacle hemorrhaging cash. Its share of the key Brazilian market was down to just 6 percent. A few years later, financial crises in Russia and Asia triggered a collapse of the entire Brazilian auto industry.

"By 2002, we had around 42 or 43 percent idle capacity in Brazil," recalled Rogelio Golfarb, director of government affairs and public relations for Ford do Brasil. "We were losing money. The brand was weak. The dealer network was suffering from lack of profitability. And our products did not appeal to the customers. We were in a very difficult situation."

Brazilian business journalists were already writing Ford's obituary, and most expected the automaker to pull out of the country within a year.

"We knew we needed to change our business model," said Dom DiMarco, head of Ford's South American division.

Ford closed its posh corporate offices in downtown São Paulo and moved into converted factory space at its main manufacturing facility here in an industrial suburb. The automaker also closed its main truck plant and consolidated those operations here, too.

Ford cut a quarter of its salaried work force. It eliminated or reassigned 3,600 factory workers, about half its hourly work force in the country. Those who lost their jobs were given buyouts. The automaker also consolidated its Brazilian dealership network and worked with franchise owners to remodel their stores.

If all this sounds familiar, it is.

In the United States, Ford has already idled four assembly plants and plans to close 16 factories by 2012. It has eliminated more than 10,000 salaried positions and cut more than 20,000 hourly jobs since the end of 2005. And it's consolidating its U.S. dealer network.

Project Amazon

When Ford launched its Brazil turnaround, most of the cars and trucks it sold were older models that had not kept pace with Brazilian consumers' increasingly sophisticated tastes. The company knew it needed better products to drive its recovery. So, even as Ford moved to close older factories, it invested millions in a new plant and new products as part of its top secret "Project Amazon."

The plant, completed in October 2001, was built in Camaçari, in the rural northeastern state of Bahia, where labor was cheap and government incentives rich. It is one of the most advanced auto factories in the world, leaner and more flexible than any other Ford plant.

"It's very critical in terms of delivering what we needed to deliver in terms of products, quality and costs," said Marcos Oliveira, president of Ford do Brasil. "It brought our manufacturing in Brazil to a different level."

Its first product was a new version of the European Ford Fiesta, modified to better match local tastes. It was an early example of the global product development strategy that Mulally is trying to extend throughout the company.

The first one rolled off the new assembly line in April 2002, and was an instant hit. Ford followed it up with a sedan version that became the segment leader in Brazil the first month it went on sale.

But the best was yet to come

Before the new factory even opened, work already had begun on a new model that would be designed and built in Brazil. It was the EcoSport, a subcompact sport utility vehicle that would offer true off-road capability in the sort of economical package the Brazilian market demanded.

"In Brazil, there is no room for Navigators," Golfarb said. "And there is no money for them either. It had to do something with the Ford DNA. It had to be affordable. We had the Explorer, too, but it wasn't affordable."

Golfarb was on hand when the design team presented the first drawings. It looked like a pint-sized version of the Explorer -- smaller than the Ford Escape, but still looking like it was ready for anything. It was essentially approved on the spot.

The EcoSport not only created a new segment in South America, it dominated it. It became the icon of a resurgent Ford and sent competitors scrambling to catch up.

Elaine Brezolin, a 50-year-old lawyer and accountant from São Paulo, is a typical EcoSport owner. She likes the car for the same reasons that make compact SUVs popular in the United States: the commanding seating position, the car-like ride and the knowledge that she can take it off-road if she has to. "The EcoSport is the car every woman wants to have," Brezolin said. "All of my friends say, 'I want an EcoSport.' My cousin offered to trade me her Corolla for my EcoSport. I said, 'No! No! No!' "

Ernesto Geraldi said he hears comments like that all the time at his Ford dealership in São Paulo -- and not just about the EcoSport, but all of Ford's products. He even has a 30-day waiting list for the entry-level Ka, a car Ford has been producing in Brazil without a major redesign for 10 years.

"The demand is more than production" -- particularly for the Fiesta and EcoSport, Geraldi said. "Our margins are increasing. Our products are desirable, and our market share is increasing."

This from a dealer who was seriously thinking about getting rid of his Ford franchises just a few years ago.

"In every segment, we have a desirable product," Ford's Oliviera said. "Once you understand the market requirements and the demand, you tailor your solutions to the particular needs of the market. I think Ford is starting to do that in the States with the Fusion and Edge."

Taking it to the street

Even with hot products, it took a massive marketing effort to convince Brazilian consumers to give the Blue Oval a second chance.

Jorge Chear Neto took a job as a marketing executive at Ford in 2000 because he relished a challenge. "It was one of the weakest brands I ever saw in my life," he recalled.

A year later, the company launched a new advertising effort to coincide with the rollout of its new Project Amazon vehicles. The message was simple: "Let a Ford surprise you."

Ford did not stop there. It offered to pay prospective buyers 100 reais -- about $50 -- to test drive a Ford product. If they bought a Ford, that money went toward the purchase price. If they bought a competitor's product, they got the cash. "We really challenged customers to come to the dealers," Neto said, noting the campaign was a huge success.

Marketing is one area where Ford's North American turnaround effort has so far fallen short. Its "Bold Moves" campaign fizzled when the automaker failed to match those words with any concrete actions.

But here, too, executives in Brazil say there is reason for optimism. That is because Barry Ingle, the man responsible for the test drive promotion and other marketing successes in Brazil, recently headed north to lead Ford brand marketing in the United States.

Ford's biggest problem today is that it does not have enough capacity in South America, let alone Brazil, to keep up with demand. In fact, Ford lost a point of market share last year simply because it could not make enough vehicles fast enough.

Still, its share of the Brazilian market has soared from just 6.6 percent in 2001 to nearly 12 percent today. The automaker peaked at 12.4 percent in 2005 and hopes to regain that by the end of this year.

Ford now is the fourth largest automaker in Brazil, and one of the most profitable. As of last month, Ford had posted 14 consecutive quarters of profit in the country. All of its plants are running at or above 100 percent manned capacity, and Ford plans to invest nearly $1 billion in Brazil over the next four years to make sure they can keep up.

Will it play in Detroit?

Ford's North American turnaround has produced much more modest results. The company did swing back to a profit in the second quarter this year, but Mulally and other executives have been quick to warn that the rest of 2007 promises more red ink.

DiMarco says it took more than a year to see results in Brazil, too. "When we first started coming out of this, we still weren't profitable. But people were starting to notice our products and say, 'hey, that's a Ford.' It started to build on that. I see that in the U.S. as well. I see that fly wheel starting to turn."

Some analysts, among them George Peterson, president of AutoPacific Inc. in Tustin, Calif., say it makes sense for Ford to import its Brazilian strategy to the United States.

"It's a good starting point," he said.

But there are important differences between the situations Ford faces in the two countries.

Its turnaround in South America coincided with a regional economic boom and resurgence of the entire Brazilian auto industry. In the United States, Ford is struggling to turn around its business against the backdrop of an uncertain economy and sagging auto sales that hurting even the strongest brands.

"Fortune was with Ford in Brazil," said Bradley Rubin, an analyst with BNP Paribas.

More importantly, he said, Ford has little liability for pensions and health care in Brazil. Rubin said those costs are crippling the company in the United States, making the restructuring actions outlined in Field's Way Forward plan of secondary importance to the labor talks now going on between Ford and the United Auto Workers.

"It's all about the contract now," he said. "You've got to get those legacy costs off the books."

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com.

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Fired ACORN Board Member Karen Inman Speaks Out

We somehow missed an excellent news report from CNN on the ACORN embezzlement scandal earlier this month. (I must have been too busy playing Super Obama World.) In the Nov. 13 report CNN reported that terminated ACORN national board member Karen Inman said it’s time to bring in “the sheriff” to investigate the group’s crooked financial dealings. (See previous blog post on Inman’s dismissal.)

Inman was dismissed from the ACORN board for daring to ask for financial records pertaining to the covered up embezzlement of close to $1 million by Dale Rathke, brother of ACORN founder Wade Rathke. CNN reports that ACORN has asked the law firm of Sidley Austin to look into whether ACORN exposed itself to legal liability in connection with the coverup. http://canadafreepress.com/index.php/article/6494

$3.5-million bailout preceded Gorbachev’s celebrated arrival in America to the Presidio

Gorbachev among first to pounce on an America in Distress

It didn’t take former Soviet leader Mikhail Gorbachev the proverbial New York minute to pounce on an America in distress.

Gorbachev came forward last week advising that the Obama administration needs “far-reaching `perestroika’ reforms to overcome the financial crisis and restore balance in the world.

The former Soviet leader has been trying to put wings on his dream for a worldwide-adopted Perestroika as far back as 1990, when he attended a Forum in Moscow with then-U.N. Secretary-General Javier Perez de Cuellar.

The Forum was sponsored by the Supreme Soviet and the International Foundation for the Survival and Development of Humanity, along with the Temple of Understanding and the U.N. Global Committee of Parliamentarians on Population and Development. 
 It was there that Gorbachev stated that “Perestroika has changed our view of ecology; only through international efforts can we avert tragedy.”

He called for each nation to produce state-of-the-environment reports on the 1992 U.N. Conference on Environment and Development in Rio de Janeiro.  He reiterated an earlier call for a U.N. “green cross”, an international emergency task force that could be rushed to the scene of an ecological disaster.

Transportation to the Forum was provided to invited participants—free of charge by Aeroflot--and local expenses were paid by the host country.

Less than a year ago, rumours about Gorbachev’s sudden “secret conversion” to Catholicism were reported as fact by the international mainstream media.

The rumours began circulating after Gorbachev and his daughter, Irina visited the Basilica of St. Francis in Assisi (Italy), home to the saint’s relics.  Italian daily La Stampa called the event a “spiritual perestroika”.

“Over the last few days some media have been disseminating fantasies—I can’t use any other word—about my secret Catholicism, citing my visit to the Sacro Convento friary, where the remains of St. Francis of Assisi lie,” Gorbachev said.  Instead he insisted that he undertook the trip, not as a pilgrim, but as a “tourist”.

“In the past he visited Orthodox monasteries in Russia and abroad, Catholic and Protestant churches, synagogues in Israel and mosques in Arab countries as well as Buddhist monasteries, but “nobody related me to this or that belief during all these years.  To avoid misunderstandings I would like to say—I was atheist and I stay atheist.” (Christianpost.com, March 24, 2008).

As recently as October 23, 1996, Gorbachev appeared on the popular Charlie Rose PBS television program, where he said:

“We are part of the Cosmos…Cosmos is my God.  Nature is my God… l believe that the 21st century will be the century of the environment, the century when all of us will have to find an answer to how to harmonize relations between man and the rest of Nature…
We are part of Nature…”

And of course it would be unlikely that someone in partnership with Maurice Strong to change the 10 Commandments of Moses for the Earth Charter would be a sincere Christian.

Held in awe by dint of having won a Nobel Peace Prize, Gorbachev became an America basher in his adopted country.

“America is intoxicated by its position as the world’s only superpower.  It wants to impose its will.  But America needs to get over that.  It has responsibilities as well as power,” Gorbachev told Times Magazine writer Sally B. Donnelly in an interview for his then new book, To Understand Perestroika.

“Who is Gorbachev, who made a soft landing in America after the collapse of the Soviet Union and who would have had nothing without the United States, to criticize it?” Canada Free Press (CFP) asked on April 3, 2006.

It was the Carnegie Endowment for International Peace, the Ford Foundation, the Rockefeller Brothers Fund and the Pew and Mellon Funds that provided the soft landing before Gorbachev even set foot in America as his chosen place to live.

Indeed, a $3.5-million bailout preceded Gorbachev’s celebrated arrival in America to the Presidio, after a fundraiser was held in his honour at the posh Waldorf-Astoria.

In April of 1993, Mikhail S. Gorbachev became the first civilian tenant at the prestigious Presidio in San Francisco.  In a dedication ceremony, the former Soviet President and his wife were given the keys to a Coast Guard officer’s house by a three-star American general, where they were to run the Gorbachev foundation.  The mission of the Foundation was to conduct research on global political and environmental issues.

“For two centuries, the Presidio has stood as a sentinel for the San Francisco Bay area,” Lieut. Gen. Glynn Mallory Jr., commander of the Sixth Army, said at the ceremony.  “It is only fitting for the leader of a peace foundation to be welcomed by a soldier, showing that the defenders of the Golden Gate have been a success.” (The New York Tines, May 18, 1993).

The Presidio was one of more than 90 military installations being closed under the Base Realignment and Closure Act of 1988, an initiative launched by some of Gorbachev’s Democrat friends.

Ironic that the former Soviet leader who said in a 1987 speech to the Politburo, “Our purpose is to disarm the Americans and let them fall asleep” got to pitch up at the Presidio.

Even as the recipient of a $3.5 million bailout, Gorbachev was crying poor when Donnelly reached him for an interview.  Asked by Donnelly, “Are you enjoying life?” Gorbachev responded, “Yes, but there are some difficulties.  Traveling is physically hard.  And my (government) pension is only 40,000 rubles a month (about $1,400).

In advising the adoption of Perestroika for Obama, Gorbachev told Italy’s La Stampa that “The world is waiting for Obama to act.”

“This is a man of our times, he is capable of restarting dialogue, all the more since the circumstances will allow him to get out of a dead-end situation. Barack Obama has not had a very long career, but it is hard to find faults, and he has led an election campaign winning over the Democratic Party and Hillary Clinton herself.  We can judge from this that this person is capable of engaging in dialogue and understanding current realities.”

“Former Russia oligarch Mikhail Khodorkovsky, founder of the now defunct Yukos oil giant, who is in prison on fraud and tax evasion charges, also used the word perestroika in discussing the future course of the Obama administration. (newzeal.blogspot.com, Nov. 11, 2008.) “He said that, “being a liberal himself, he thinks that the world will take a left turn”, and that “a global perestroika would be a logical response to the global crisis.

“The paradigm of global development is about to change.  The era inaugurated by Ronald Reagan and Margaret Thatcher 30 years ago is over.”

Meanwhile, even as the far left celebrated the arrival of Gorbachev on American soil, he was working with the global elite to take down the U.S. from the inside.

1. Hope when it’s needed most
2. An Explosion of Green Lies
3. Fed Bails Out Rich Arabs in Citigroup Deal
4. MEDIA REFORM TELE-EVENT
5. CNN’s Hypocritical Disregard for Employee Rights
6. Gorbachev among first to pounce on an America in Distress
7. A Contribution to the Climate Debate
8. We’re not scared anymore, Mr. Gore
9. Homeland Security: Billions Invested in DHS Programs Lack Adequate Oversight
10. What a Single Nuclear Warhead Could Do
11. The Doubts of a Saint
12. Ho-hum; another report blames crime on racism
13. I can’t prove this happened—But I’ll bet something close to it did.
14. Race in the Third Millennium
15. The New Messiah: Workout versus Worship
16. Charity Convicted in Terrorism Financing Trial
17. Cholera spreads like veldfire across Zimbabwe
18. A memorial to a murderous socialist thug in the heart of the heart of capitalism:
19. Islamic fighters vow to rescue hijacked Saudi tanker
20. Cost of Rebuilding U.N.’s Palace? A Billion Dollars
21. Holiday Greetings to Citigroup and General Motors
22. Obamessiah to Usher in New Era Of Global Equality
23. Give Thanks that Che Guevara is Dead
24. Why Did Our Founders Want Only Qualified Citizens to Vote?
25. Lighten Up – With Color
26. On Palin’s Celebrity, AP Reminds She’s A Failed Candidate… Over and Over and Over
27. Nadler Needs to Read the Constitution
28. Fired ACORN Board Member Karen Inman Speaks Out
29. Soros Holds Franken Recount Fundraiser
30. Bridge Loans To Nowhere
31. Coming To A Neighborhood Near You… Or Else
32. The Mainstreaming Of Liberal Bigotry
33. CAIR Sued by Former Clients for Racketeering, Fraud, & Breach of Fiduciary Duties
34. The UN Celebrates “Palestinians”, Hates Jews
35. Barack Obama is the Best Thing to Ever Happen to Expose Black Genocide
36. The new world devised by Maurice Strong and George Soros
37. Let the Big Three AND The UAW Die!
38. Somali Piracy or Terrorism?
39. So it Really was a Reactor in Syria
40. Global Warming? Bring it On

The election of Barack Obama has opened the floodgates to a deluge of propaganda by the many Green groups seeking to advance their various agendas

An Explosion of Green Lies

If you think you’ve been hearing and reading more and more Green lies about global warming and a whole range of other Green scares, you’re right. The election of Barack Obama has opened the floodgates to a deluge of propaganda by the many Green groups seeking to advance their various agendas.

The mainstream news media folk who have not yet figured out that their credibility has long since gone into the toilet keep pushing this stuff and with exquisite irony—no doubt lost on these geniuses—NBC nearly killed one of its Today Show anchors in a stunt that dispatched all them to the far corners of the globe to prove that global warming was happening.

At the very same time, it announced that it was firing the staff of its Weather Channel’s environmental unit! That’s right, while the famed anchors were trudging up mountains, hanging out on glaciers or snorkeling reefs, the entire staff of “Forecast Earth” was laid off halfway through NBC’s “Green Week.” In all, some 80 people were cut, but it was the Forecast Earth staff that existed solely to spread global warming lies despite the fact that the real Earth has been in a cooling cycle since 1998.

Meanwhile, on Mount Kilimanjaro in Tanzania, Ann Curry and more than a hundred local Masai porters were experiencing a dangerous condition called High Altitude Cerebral Edema in order to prove that global warming was causing the mountain’s ice cap to melt. Everything about this idiot stunt was wrong from the gitgo.

If anyone on the Today Show had bothered to do any research, they would have known that the mountain’s ice cap had been receding for years due to deforestation. In the October 2003 edition of Nature Magazine it was pointed out that, “Without the forest’s humidity, previously moisture-laden winds blew dry. No longer replenished with water, the ice is evaporating in the strong equatorial sunshine.” Sunshine! On the Equator!

A June 2007 study published in American Scientist revealed that the melting of Kilimanjaro’s icecap had been occurring for at least a century as forests were cleared for farmland. Indeed, most of the melting had occurred prior to 1953!

Curry, age 52, aborted the trek up the mountain that was intended to announce something that an NBC page spending a half-hour on Google could have told her was not just a waste of time, but a complete and total lie.

As the Obama administration makes ready to assume power, the Greens are going crazy with campaigns denouncing coal as “dirty” and demanding an end to the use of all plastic bottles, claiming that a life-threatening component exists. If this is so, don’t you think we would know about it by now? Plastic, of course, is made from oil and that too has been stigmatized for decades by the Greens. The plunge of global oil prices has been about the only good news that consumers have had in weeks.

The new big lie is that millions of jobs can be created from Green sustainable or “clean” energy in the form of solar and wind power, but even with vast government tax subsidies and other incentives, neither of these has gained a foothold because they both require back-up generation facilities when the wind isn’t blowing and the sun isn’t shining.

The notion that electric cars will replace those using the highly efficient gasoline powered automobiles and trucks has been around since the late 1800s and the problem now is the same problem as then; the batteries which must be so large and so frequently charged that they are impractical. A new electric auto from a company called Tesla will cost you $50,000 to purchase. Only demented Hollywood stars will be able to afford them.

There will be no explosion of jobs from so-called Green industries and the real industries, like auto industries, are just blowing smoke up your skirt when they trumpet how Green they are. It is a marketing scheme, not science, and frequently a costly waste of money that could have been spent more wisely to benefit their investors.

I keep telling people that businesses large and small exist to make a profit!

At some point, when the economy reaches a truly horrid low point, people will begin to shed all the nonsense they have been taught in America’s schools about the environment and start thinking about where the next rent or mortgage payment will come from. They will have noticed by then that, wherever they live, it is getting colder and the cold weather is lasting longer.

Over at the Weather Channel, the newly trimmed down staff will be tracking and talking about the latest blizzards burying cities and rural areas in snow.

1. Hope when it’s needed most
2. An Explosion of Green Lies
3. Fed Bails Out Rich Arabs in Citigroup Deal
4. MEDIA REFORM TELE-EVENT
5. CNN’s Hypocritical Disregard for Employee Rights
6. Gorbachev among first to pounce on an America in Distress
7. A Contribution to the Climate Debate
8. We’re not scared anymore, Mr. Gore
9. Homeland Security: Billions Invested in DHS Programs Lack Adequate Oversight
10. What a Single Nuclear Warhead Could Do
11. The Doubts of a Saint
12. Ho-hum; another report blames crime on racism
13. I can’t prove this happened—But I’ll bet something close to it did.
14. Race in the Third Millennium
15. The New Messiah: Workout versus Worship
16. Charity Convicted in Terrorism Financing Trial
17. Cholera spreads like veldfire across Zimbabwe
18. A memorial to a murderous socialist thug in the heart of the heart of capitalism:
19. Islamic fighters vow to rescue hijacked Saudi tanker
20. Cost of Rebuilding U.N.’s Palace? A Billion Dollars
21. Holiday Greetings to Citigroup and General Motors
22. Obamessiah to Usher in New Era Of Global Equality
23. Give Thanks that Che Guevara is Dead
24. Why Did Our Founders Want Only Qualified Citizens to Vote?
25. Lighten Up – With Color
26. On Palin’s Celebrity, AP Reminds She’s A Failed Candidate… Over and Over and Over
27. Nadler Needs to Read the Constitution
28. Fired ACORN Board Member Karen Inman Speaks Out
29. Soros Holds Franken Recount Fundraiser
30. Bridge Loans To Nowhere
31. Coming To A Neighborhood Near You… Or Else
32. The Mainstreaming Of Liberal Bigotry
33. CAIR Sued by Former Clients for Racketeering, Fraud, & Breach of Fiduciary Duties
34. The UN Celebrates “Palestinians”, Hates Jews
35. Barack Obama is the Best Thing to Ever Happen to Expose Black Genocide
36. The new world devised by Maurice Strong and George Soros
37. Let the Big Three AND The UAW Die!
38. Somali Piracy or Terrorism?
39. So it Really was a Reactor in Syria
40. Global Warming? Bring it On