by Maryfran Johnson

IT Fuels Ford’s Dramatic Turnaround

Aug 31, 2010
Car Tech

Ford’s unified vision, facilitated by IT, is bringing the company back to profitability without a bailout.

No one will ever accuse CIO Nick Smither of wasting a good crisis.

When he arrived to run IT at Ford Motor Company four years ago, the beleaguered automaker had already cut more than $10 billion and dropped half its brands. A few months later, CEO Alan Mulally arrived to launch the “One Ford” makeover plan with its goal of designing cars globally for worldwide consumption.

In the most wonderfully British understatement, Smither allows that he came into the CIO job at the number-two U.S. automaker with “a sense that there were going to need to be some changes.” (See our cover story by Senior Editor Kim S. Nash, “How a Global IT Revamp Is Fueling Ford’s Turnaround.”)

Fast forward to 2010, and Smither is leading an IT-business collaboration at the heart of an astonishing reversal of fortune. Ford recently completed its fifth straight profitable quarter, rebounding after a decade of steady losses.

Some corporate turnarounds are the stuff of business-school legends and bestselling books. The Ford story, with its extreme makeover elements, could be one of them. No bankruptcy protections. No federal bailout money. Just an arduous climb back to profitability, fueled by an IT organization that transformed itself from order-taker to integrated business partner.

Later this year, as the 2012 Ford Focus goes into production, an American car company will be producing a global car—80 percent its parts are the same no matter where it’s built.

“It’s a different company now,” says Smither, who reports to the CEO and takes part in his top-level weekly business plan reviews. “My work is focused around making sure we integrate Ford globally so that we’re profitably moving forward.”

CIOs across every industry will spot the classic elements in this turnaround tale. A severe financial crisis threatens the company’s survival, sparking motivation for urgent change. New leadership arrives with a unifying vision. Company culture begins, haltingly, to change and adapt.

“I have always [said] a career in IT is a career in change management,” Smither notes. “But no one could have anticipated this level of change.”

What’s refreshing about this story—aside from the novelty of good news from a bad corner of the economy—is the clear case it makes for the powerful business impact and competitive advantage of a CEO-CIO partnership.

Read it and rejoice.

Maryfran Johnson, Editor in Chief, CIO Magazine & Events