Coincidence? Ford’s Adventure in DEI Coincided With Its Disastrous Drop in Quality

I won't bore you by rehashing the ruinous consequences for certain companies when they go woke in public — let's just say Dylan and Disney, and leave it at that. But out of the public eye, there is also the insidious internal effect that prioritizing “diversity” can have on a company.

When a business decides to embark on a course to "diversify" its workforce by incorporating a DEI regimen, it hurts itself in three primary ways:

It wastes money on annoying woke gobbledegook;
It squanders staff time and attention on tiresome, divisive "trainings;" and
It prioritizes meaningless immutable characteristics over competence when hiring and promoting employees, resulting in a less effective workforce.

Did those second two aspects of the woke agenda damage one of America's great automakers? I'm not one of those people who thinks correlation implies causation, but if it happens enough times, a trend emerges. Today's case study is the Ford Motor Company.

Ford was an American hero back in 2009, when it was the only major U.S. automaker that did not take Obama’s $80 billion bailout money. (Chrysler and GM took the government loans and the Democrat strings that came with them — shareholders got screwed while unions got bailed out. It was very similar to what we saw under Biden with the government bailout of Silicon Valley Bank and Signature Bank a year ago. But I digress.)

At any rate, Ford has “gotten its head right” since its racist-sexist-bigot-alphabet-phobic days of competent management. "In October 2018, Ford joined the CEO Action for Diversity & Inclusion Pledge which aims to rally the business community to advance Diversity and Inclusion within the workplace by working collectively across organizations and sectors," the company brags on its website. "The CEO Action pledge outlines specific actions companies participating [sic] can take to cultivate a workplace where diverse perspectives and experiences are welcomed and respected."

Ford wasn't done signing onto DEI-themed time and resources-sucks with that one, either. "Women are significantly underrepresented in the tech industry which is why we have partnered with different organizations such as MARC (Men Advocating Real Change). MARC is an immersive program focused on engaging men in the inclusion conversation, in order to raise awareness and increase women [sic] advocacy," the woke website goes on.

There's more, but you get the idea: Ford wanted to be one of the cool kids.

At the same time Ford was striving to ~~discriminate illegally against white males~~ diversify its workforce, it took its eye off the ball as far as the business of making cars is concerned. Remember — this is the company that once operated under the tagline "Quality is Job #1" (hat tip to Chris Queen).

Those were the days. So, what happens when companies instead proclaim DEI to be Job #1?

"Ford Motor Co. CEO Jim Farley on Thursday admitted the automaker would be 'much stronger' today had he more quickly focused on fixing the company's longstanding quality issues and other operational inefficiencies when he assumed the top job in 2020," reports Automotive News.

"I wish I had the same laser-focus on transforming our industrial system" as on other parts of the business, Farley said at the Wolfe Research Global Auto Conference in New York. "The capability atrophy in engineering, supply chain and manufacturing at Ford — [CFO] John [Lawler] and I talk about this every day — needed a much more fundamental reset than I had realized. I think we all have regrets, and that's a big one for me. It's a humbling thing."

Along with his CEO Action for Diversity & Inclusion Pledge responsibilities, Farley claims he was focused on international restructuring during that period. Too bad he didn't have enough bandwidth left over for making cars that work.

"In 2022, Farley bemoaned having left about $2 billion in unrealized profits on the table over what he termed 'dysfunctionality' within Ford," says Automotive News. "[CFO John] Lawler at the time said Ford was not working as productively as it needed to and that the company had an $8 billion cost disadvantage compared with its legacy rivals from inefficiencies in how it sourced, designed and built vehicles." These losses stemmed from leading the industry in the number of recalls and repairs.

Farley is focusing on the problem now:

One way Ford is working to fix quality issues, Farley said, is by tying employee bonuses to improved scores. When he became CEO, he noticed a vast majority of managers received full bonuses even after the company led the industry in recalls — a U.S. record Ford has held now for three consecutive years. He quickly changed that.
"You have to set up a culture shift — a performance reward system where every engineering manager, purchasing component manager and plant manager is fully accountable for the quality and cost of their work," he said.

Of course, Ford already was busy setting up a culture shift; it was just a stupid culture shift. Now it looks as though the storied car company is shifting its culture — and compensation — to a merit-based system.