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

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Asleep At The Wheel Ford Motor Companys
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

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I will build a motorcar for the great
multitude.-Henry Ford
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Case Overview

• Ford Chief Executive Officer, Jacques Nasser
• A History of Diversity at Ford
• Nassers Diversity Crusade
• Nassers 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

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Jacques Nasser
He is a very polarizing figure . . . People have
strong emotions about him one way or the other.
Hes a compelling guy. - David E. Cole
Director of Automotive
Studies University of Michigan
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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 Detroits head of operations in 1996
  cuts costs by 3 billion.
• Declared Automobile Industries Man of the Year,
  1999 and is named CEO.

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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.

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Nassers Diversity Campaign

• 1999. Ford makes 30 of its new hires minorities
  and raises minority managers to 15.
• 2000. Fortune magazine rates Ford the countrys
  30th best company for minoritiesno other
  automaker makes the top 50.
• 2001. Minorities and women constitute 47 of
  Fords total workforce African Americans account
  for 19 and Latinos 3.

Greater inclusion of minorities is a priority
for two reasons. Its the right thing to do.
Its also good business. -Jacques Nasser
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Nassers Performance Management Process (PMP)

• Modeled after GE and Microsoft
• Used to rank Fords 18,000 managers
• Stated that managers bonuses hinged on diversity
  goals

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Nassers Performance Management Process (PMP)

Definition
Actions
A
B
C
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Older Workers Sue
Two high-profile age discrimination lawsuits were
brought against Ford by older workers as a result
of Nassers 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.

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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 arent going
  to do that by pleasing everybody, by having some
  kind of consensus. We know we are going to upset
  some people. Maybe they shouldnt be a part of
  Ford Motor Co.
• David Murphy, Human Resources Vice-President

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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

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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
• 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 individuals age
• 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 individuals age or
• to reduce the wage rate of any employee in order
  to comply with this Act.

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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

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Ford Settles and Moves On
Recent Accomplishments

• The Gay Lesbian Alliance Against Defamation
  awarded Ford the Fairness award.
• DiversityIncs June/July 2004 issue ranked Ford
  the number three company in the U.S. for
  diversity.

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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.

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Discussion Questions

• What mistakes did Jacques Nasser make in
  developing his plan to diversify Fords
  workforce?
• 2. How can Ford restore its good reputation for
  promoting diversity?
• 3. What were the problems with Fords PMP
  evaluation system?
• 4. What changes should be made in creating a new
  evaluation system?

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Discussion Questions

• 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?