By Grant Yoxon
It may not be “a chicken in every pot and two cars in every garage,” Herbert Hoover’s famous Depression promise, but the Ford Motor Company’s plan to put a new computer in the homes of Ford employees world wide could well turn out to be the new deal of the decade.
And not just for Ford employees, but for working people every where. Within hours of the announcement last week several companies, including Delta Airlines with 72,000 employees, announced they would follow Ford’s lead and help their employees purchase computers and access the Internet.
Eligible Ford employees world wide will receive a Hewlett-Packard computer with a 500-megahertz Intel Celeron processor, 64 megabytes of RAM, a 4.3-gigabyte hard disk, a CD-ROM player, a 15-inch monitor, speakers, a modem, a color printer, Internet access and an array of software. And all for only $5 per month.
It’s not a perk. And even though Ford is immensely profitable – earning US$7.2 billion on revenues of $163 billion in 1999 – the estimated $310 million expenditure wasn’t made because Ford doesn’t know what to do with all that money.
“It is clear that individuals and companies that want to be successful in the 21st century will need to be leaders in using the Internet and related technology,” Ford Chairman Bill Ford said in a statement accompanying the announcement. “That’s what this program is all about.”
More to the point, the Ford Motor Company has very quickly put in place a type of Intranet that stretches right into the homes of it employees. Ford’s workforce will connect to the Internet through a portal site developed specifically for the Ford program. This gives Ford the ability to communicate with its employees and their families every time they fire up that new Hewlett-Packard, through e-mail and through content developed for the Web.
The computer deal is the latest in a series of steps designed to connect Ford electronically to all its stakeholders – employees, consumers, customers, shareholders, dealers and suppliers.
This is e-business and, according to Ford president Jac Nasser, it is “an integral part” of Ford’s strategy to remain one of the world’s biggest automakers.
Typically, big car companies like Ford and General Motors are likened to dinosaurs fending off extinction, but if their approach to e-business is any indication, nothing could be further from the truth. These are companies that, once they realize the potential of a new technology, embrace it wholeheartedly and implement it rapidly throughout their organization.
Take for example the supplier auction sites recently built by both Ford and General Motors. In the Fall, GM announced that it would develop its auction site, GM TradeXchange, for suppliers to bid on GM contracts. Three months later, in mid-December, the site launched with its first auction. In January, GM announced it would incorporate business-to-business supply chain services into the site so that it could move its global supply chain – an $87 billion business involving 30,000 suppliers – to the site. Ford developed its competing marketplace, Auto-Exchange at the same time.
Echoing the Internet mantra, GM’s group vice president of Worldwide Purchasing, Harold R. Kutner said, “the agreement (with supply chain service company i2 Technologies) is another step in GM’s transformation into a fast global unit that’s driving electronic technology into every facet of the Company.”
And it is every facet. Anyone who surfs the Web knows how the big three use the Internet to market their cars and to build recognition of their brands. Their banner ads are everywhere and their web sites are some of the most sophisticated to be found anywhere.
But the car companies are using the Web not only to market their products, but to research the market and to establish long term relationships with customers. Ford has entered into strategic agreements with community sites like iVillage, the leading online women’s site, Digital Entertainment Network, targeted at the Generation-Y audience, Bolt.com, one of the largest teen destinations on the Internet, Yahoo!, MSN CarPoint and even all-makes auto site, carclub.com, in which it took an equity stake.
The Yahoo agreement allows Ford to mirror its virtual owners community – ownerconnection.com – on one of the Web’s most traveled sites, while the new cars.bolt.com site will provide Ford with information on the vehicle interests and needs of more than 3 million teens who visit the site daily.
Meanwhile, the automakers are spending millions on their own web sites, to entertain and to connect with potential new customers. Much more than electronic brochures, these sites offer visitors streaming videos and 360 degree virtual reality tours of new cars and trucks, and the ability to configure a new vehicle with the available options, connect to a local dealer for a quote and apply for finance and insurance. The only thing you can’t do is order the car directly from the factory and have it delivered to your door.
But judging by how quickly the automakers have embraced Internet technologies, that day may be coming sooner than later.