Ford brings Deere CEO John May to board


Ford Motor Co. has added John May, CEO of Deere & Co., to its board of directors, and analysts say the move illustrates the automaker’s commitment to new technologies in the fierce race to dominate electric vehicles. and autonomous.

The fact that Deere has just resolved a six-week UAW strike, its first in 35 years, is “the icing on the cake,” said industry observer John McElroy, host of the podcast and the Autoline After Hours webcast.

“Deere pioneered some of the earliest, if not the earliest, autonomous tractors,” he said. “They are adept at introducing new technologies into globally competitive agricultural equipment. Deere dominates the segment. And companies like to have board winners. If you’re a global manufacturer getting into high tech, like Ford, you want a board member who has that background under his belt. ”

Moline, Illinois-based farm equipment and construction company has already hit a record 2013 profit of $ 3.5 billion with three months to go this year despite supply chain challenges .

Still, labor relations are a key issue with Ford, which has turned one of the most violent relationships with union organizers into an industrial model.

The Dearborn automaker and its executives often publicly recognize the UAW, an acronym for what was once the United Auto Workers and changed years ago to United Automobile, Aerospace and Agricultural Implement Workers of America.

It is therefore important that some 10,000 Deere workers in Iowa, Illinois and Kansas approved a six-year contract on November 17 after several contract refusals. UAW negotiators won with a deal that included a signing bonus of $ 8,500, a return to cost-of-living wage adjustments; a 20% wage increase over the term of the contract with 10% this year, increased pension benefits and health care coverage that requires no premium payment from workers.

While some observers might view any strike as a negative reflection on the direction of the company, history shows that Wall Street tends to reward executives who play hard with workers.

While May has been running Deere since November 2019, he has found a way to balance a series of professional and business challenges facing Ford, analysts said.

A spokesperson for the UAW declined to comment on the appointment to Ford’s board of directors.

Bill Ford said in a December 9 press release that “May’s experience helping transform Deere into a smart industrial company is relevant to Ford’s own ambitious transformation and brings additional valuable information to Ford’s board of directors. “.

Supply chain strategy

“The CEO of Deere secured a seat on Ford’s board of directors due to Deere’s competitive success in the marketplace and his skills in managing a complex, highly computerized manufacturing operation,” said Harley Shaiken, a labor expert based at the University of California at Berkeley.

“Ford has shown an ability to solve problems without a strike, so I suspect he’s not looking for Deere’s new approaches in this area. After all, Ford’s approach has been to solve without a fight rather than a fight. and solve. It’s cheaper, “said Shaiken, whose grandfather worked on the Rouge factory chain for decades after fleeing persecution in Russia.

According to Marick Masters, professor at the Mike Ilitch School of Business at Wayne State University in Detroit, it will be critical for Ford to put the changing tech landscape into perspective and how to navigate the “disruptive” transition to electrification. which requires fewer auto workers per hour. .

Perhaps more importantly, he said, “Both companies rely on a supply chain that they will need to manage more effectively on a global scale to meet pressures from consumers and others. Experience, focus and success are the driving forces behind such a meeting.

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May’s appointment brings Ford’s board of directors to 15 members. Typically, Ford’s board members receive a six-figure compensation for their oversight role, which includes providing strategic vision and leadership as needed.

Gender balance

Ford choosing not to add a woman to the board of directors actually “surprised” McElroy.

“Look, American and European companies are under pressure to increase the diversity of their boards of directors, especially with women,” he said. “GM has a 50-50 split, the best in the industry. Ford doesn’t like being presented by GM in any way. I really thought that one of the things they might be looking for was to ‘try to increase the number of women on the board. “

Ford has 15 board members and four or 27% are women. GM has 13 board members and seven or 54% are women.

Ford executive chairman Bill Ford said at annual meetings of shareholders in recent years, when asked, the company has made a commitment to promote qualified women to leadership positions.

Bill Ford, executive chairman of Ford Motor Company, stands next to Linda Zhang, chief F-150 engineer after Ford unveiled the electric F-150 Lightning at its global headquarters in Dearborn on May 19, 2021.

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The May addition seems like a natural fit, said Melissa Bradley, a business professor at Georgetown University who follows Ford Motor Co. and other automakers as they enter the tech arena.

“Jim Farley has placed a big bet on the future of the company. He thinks long term in terms of performance, products and profits. John May is no different,” she said.

“The recent agreement between Deere and the UAW indicates that workers can benefit from performance pay, which was not possible before. This indicates that the two men are committed for the long term and recognize that the commitment of engaged and dedicated employees is the key to the success of the company, ”said Bradley.

In other news: Lobbyist retires

Meanwhile, as Washington launches a comprehensive review of public policies and infrastructure financing that have a direct impact on the auto industry, Ford saying goodbye to its main Washington, DC lobbyist Mitch Bainwol on December 31.

For the past three years, he has led interaction with government officials and agencies in the markets around the world where Ford operates. Bainwol, 62, joined Ford after serving as CEO of the Alliance of Automobile Manufacturers for eight years, where he spoke to 12 automakers from the United States, Europe and Japan on safety issues, environment and technology.

“Partnering with governments is key to constantly simplifying, advancing and accelerating what we do, so that we always give customers and society the value they deserve,” Farley said in a press release. “Mitch and his team have done a great job in making these relationships possible and productive, putting Ford at the heart of important political discussions.”

Mitch Bainwol, who started at Ford as Director of Government Relations on March 1, 2019, is stepping down on December 31, 2021. He began his career at the US Office of Management and Budget as a Budget Analyst under Administration Reagan.  He later served as chief of staff for the Republican National Committee, CEO of the Recording Industry of America, and CEO of the Alliance of Auto Manufacturers.

Bainwol and his team played a “pivotal role in establishing a historic framework with California and, in turn, 16 other states and the District of Columbia to reduce vehicle emissions and encourage a single national standard.” Ford said in a press release.

In addition, Bainwol worked to define and execute “the political process behind Ford’s US site selection in October 2021 for a new F-Series electric truck and three BlueOval SK joint venture battery factories.”

Steven Croley, who oversees Ford’s legal, government relations, sustainability, environment and safety engineering functions as director of policy and general counsel, will oversee government relations until a successor be announced.

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Contact Phoebe Wall or 313-618-1034.Follow her on twitter@phoebesaid. Read more on Ford and subscribe to our automotive newsletter.

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