Transcript Asleep At The Wheel: Ford Motor Company’s Exclusion of the

Asleep At The Wheel:
Ford Motor Company’s Exclusion of the Older Worker
Power Point to accompany Opportunities and Challenges of Workplace Diversity by Kathryn A. Cañas and Harris Sondak
Prepared by Levi Baker, Kathryn A. Cañas, and Harris Sondak
“I will build a
motorcar for the
great multitude.”
-Henry Ford
Case Overview
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Ford Chief Executive Officer, Jacques Nasser
A History of Diversity at Ford
Nasser’s Diversity Crusade
Nasser’s Performance Management Process (PMP)
Older Workers Sue Ford for Discrimination
The Age Discrimination in Employment Act
Ford Settles Lawsuits and Moves On
Case Conclusions
Discussion Questions
Jacques Nasser
“He is a very polarizing figure . . . People have
strong emotions about him one way or the other.
He’s a compelling guy.”
- David E. Cole
Director of Automotive Studies University of Michigan
Jacques Nasser
Professional Achievements
• Accepted position as financial analyst at age 20 with Ford Australia.
• Worked in Ford Thailand, Venezuela, Argentina, and the Philippines.
• Held for 3 days as a political prisoner in 1985 at Argentina facilities.
• Returned to Ford Australia in 1990; increased productivity by 40%.
• Hired as Detroit’s head of operations in 1996; cuts costs by 3 billion.
• Declared Automobile Industries Man of the Year, 1999 and is named CEO.
A History of Diversity at Ford
• In 1913 Ford pays the then-high wage of 5 dollars a day attracting
thousands of immigrants and African Americans; Ford credited with
helping to create the black middle class.
• By 1916, Ford employed people who represented 62 nationalities and
more than 900 people with disabilities.
• In 1919, Ford hired many veterans with disabilities returning from World
War I, thus “making the automaker one of the first companies to hire
people with disabilities and to adapt work environments to their specific
needs.”
Nasser’s Diversity Campaign
• 1999. Ford makes 30% of its new hires minorities and raises
minority managers to 15%.
• 2000. Fortune magazine rates Ford the country’s 30th best
company for minorities—no other automaker makes the top 50.
• 2001. Minorities and women constitute 47% of Ford’s total
workforce; African Americans account for 19% and Latinos 3%.
“Greater inclusion of minorities is a priority for two reasons.
It’s the right thing to do. It’s also good business.”
-Jacques Nasser
Nasser’s Performance
Management Process (PMP)
• Modeled after GE and
Microsoft
• Used to rank Ford’s
18,000 managers
• Stated that managers’
bonuses hinged on
diversity goals
Nasser’s Performance
Management Process (PMP)
%
A
B
C
10
80
10
Definition
Top performers
Actions
Potential for
advancement
Split into B1 and B2.
B2 employees seen
as less productive
B1 eligible for pay
increases and
bonus. B2 received
fewer benefits
Low performers
If no improvement
after two years,
employee could be
demoted or fired
Older Workers Sue
Two high-profile age discrimination lawsuits were brought against
Ford by older workers as a result of Nasser’s PMP initiative.
Streeter vs. Ford Motor Company
• The plaintiffs consisted entirely of white males.
• The plaintiffs claimed “reverse discrimination” based on
race and sex but later dropped this claim to focus on age.
Siegel vs. Ford Motor Company
• The plaintiffs consisted of employees of both sexes and
multiple ethnicities.
• The suit was given national recognition when it was
supported by the AARP.
• The plaintiffs claimed that management was attempting to
eliminate older salaried workers.
Older Workers Sue
Key quotes by Ford top executives increased the perception that Ford
was discriminating against older workers:
“We are in the middle of transforming
one of the biggest companies in the
world. You aren’t going to do that by
pleasing everybody, by having some
kind of consensus. We know we are
going to upset some people. Maybe
they shouldn’t be a part of Ford Motor
Co.”
–
David Murphy, Human Resources Vice-President
Older Workers Sue
Key quotes by Ford top executives increased the perception that Ford
was discriminating against older workers:
“We are trapped in a mono-cultural
environment that is dominated by old white
males. We need to change. We need more
employees who are more reflective of our
consumer base.”
–
Richard Parry-Jones, Product Development and Quality Vice-President
The Age Discrimination in
Employment Act
US Department of Labor
The main argument in the lawsuits against Ford was that they
violated the Age Discrimination in Employment Act:
It shall be unlawful for an employer:
1.
to fail to hire or to discharge any individual or otherwise discriminate
against any individual with respect to his compensation, terms,
conditions, or privileges of employment, because of such individual’s
age;
2.
to limit, segregate, or classify its employees in any way which would
deprive or tend to deprive any individual of employment opportunities
or otherwise adversely affect his status as an employee, because of
such individual’s age; or
3.
to reduce the wage rate of any employee in order to comply with this
Act.
Ford Settles and Moves On
• Pays $10.5 million to
settle the two suits
• Drops the PMP moniker
• Ranks employees as “top
achievers,” “achievers,”
and “improvement
needed” instead of
10/80/10
Ford Settles and Moves On
Recent Accomplishments
• The Gay & Lesbian Alliance Against Defamation
awarded Ford the “Fairness” award.
• DiversityInc’s June/July 2004 issue ranked Ford the
number three company in the U.S. for diversity.
Conclusions
• Ford maintains that diversity is a “distinct
advantage” and that diversity is one of their “top
corporate priorities.”
• With such serious claims of diversity comes the
responsibility of valuing the knowledge and
experience of the older worker.
• The Ford case provides an example of top
management attempting to promote corporate
diversity but failing in the process by
discriminating against older workers.
Discussion Questions
1. What mistakes did Jacques Nasser make in
developing his plan to diversify Ford’s
workforce?
2. How can Ford restore its good reputation for
promoting diversity?
3. What were the problems with Ford’s PMP
evaluation system?
4. What changes should be made in creating a new
evaluation system?
Discussion Questions
5. How did Ford appear to violate the ADEA?
6. What should management do when promoting
one dimension of diversity seems to require
diminishing another?
7. How should businesses adapt to the aging of the
US workforce?
8. How much does it matter that top management be
as diverse as the workforce?