Ford Motor Co. has added to its board of directors John May, CEO of Deere & Co., and analysts say that move illustrates the automaker's commitment to new technology in the cutthroat race toward electric and autonomous vehicle dominance.
The fact that Deere just resolved a six-week UAW strike, its first in 35 years, is "icing on the cake," said industry observer John McElroy, host of "Autoline After Hours" podcast and webcast.
"Deere has pioneered some of the first, if not the first, autonomous tractors," he said. "They're adept at bringing new technology into agriculture equipment that competes on a global basis. Deere dominates the segment. And companies like to have winners on the board. If you're a global manufacturer that's moving into high tech, like Ford, you want a board member who has that experience under their belt."
The Moline, Illinois-based agricultural and construction equipment company already broke a record profit of $3.5 billion set in 2013 with three months left to go this year despite supply chain challenges.
Still, labor relations is a key issue with Ford, which turned one of the most violent relationships with labor organizers into an industry 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.
So it matters that some 10,000 Deere workers in Iowa, Illinois and Kansas approved a six-year contract on Nov. 17 after multiple contract rejections. UAW negotiators claimed victory with a deal that included an $8,500 signing bonus, a return of Cost of Living wage adjustments; a 20% increase in wages over the lifetime of the contract with 10% this year, increased retirement benefits and health care coverage that requires no premium payments from workers.
While some observers might view any strike as a negative reflection on company leadership, history shows that Wall Street tends to reward executives who play hardball with labor.
While May has been running Deere just since November 2019, he has found a way to balance a series of labor and business challenges that Ford faces, analysts said.
A spokesman for the UAW declined to comment on the Ford board appointment.
Bill Ford said in a news release Dec. 9 that "May's experience helping to transform Deere as a smart industrial company is relevant to Ford’s own ambitious transformation, and brings additional valuable insight to the Ford board."
"The Deere CEO was given a seat on the board at Ford because of Deere’s competitive success in the market and its skill in managing a complex highly computerized manufacturing operation," said Harley Shaiken, a labor expert based at the University of California, Berkeley.
"Ford has shown an ability to resolve issues without a strike, so I suspect it’s not looking for fresh approaches from Deere in that area. After all, Ford’s approach has been to resolve without a fight rather than fight and resolve. It’s less costly," said Shaiken, whose grandfather worked on the factory line at the Rouge for decades after fleeing persecution in Russia.
Bringing perspective to the changing technology landscape, and how to navigate the "disruptive" transition to electrification that requires fewer hourly autoworkers, will be essential to Ford, said Marick Masters, a professor at the Mike Ilitch School of Business at Wayne State University in Detroit.
Perhaps most importantly, he said, "both companies rely on a supply chain that they will need to manage more effectively on a global scale to meet consumer and other pressures. Experience, focus, and success are the driving forces behind such an appointment."
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May's appointment expands the Ford board to 15 members. As a rule, Ford board members earn six-figure compensation for their oversight role, which includes providing strategy insight and leadership, as needed.
Ford choosing not to add a woman to the board actually "surprised" McElroy.
"Look, American companies and European ones are under the gun to increase the diversity of their boards, particularly with women," he said. "GM has a 50-50 split, the best in the industry. Ford doesn't like to be shown up by GM in any way, shape or form. I really thought one of the things they could go after is trying to increase the number of women on the board."
Ford has 15 board members and four or 27% are female. GM has 13 board members and seven or 54% are female.
Ford executive chair Bill Ford has said during annual shareholder meetings in recent years, when asked, that the company is committed to promoting qualified women to leadership positions.
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Adding May seems like a natural fit, said Melissa Bradley, a business professor at Georgetown University who follows Ford Motor Co. and other automakers as they move into the technology arena.
"Jim Farley has placed a big bet on the future of the company. He is thinking long term in terms of performance, product and profits. John May is no different," she said.
"The recent agreement struck between Deere and the UAW notes that workers can enjoy performance pay, which was not possible before. This signals that both men are in this for the long haul and recognize that the engagement of committed and dedicated employees is key to the success of the company," Bradley said.
Meanwhile, as Washington launches a dramatic review of public policy and infrastructure funding that directly impacts the automotive industry, Ford is saying goodbye to its top Washington, D.C. lobbyist Mitch Bainwol on Dec. 31.
For the past three years, he has directed interaction with government officials and agencies in markets worldwide where Ford does business. Bainwol, 62, moved to Ford after being CEO of the Alliance of Automobile Manufacturers for eight years, where he gave voice to 12 carmakers from the U.S., Europe and Japan on safety, environment and technology issues.
“Partnering with governments is critical to constantly simplifying, advancing and accelerating what we do, so that we’re always giving customers and society the value they deserve,” Farley said in a news release. “Mitch and his team have done a great job making those relationships possible and productive, putting Ford in the middle of important policy discussions.”
Bainwol and his team were "pivotal in enabling a landmark framework with California and, in turn, 16 other states and the District of Columbia to reduce vehicle emissions and encourage a single nationwide standard," Ford said in a news release.
Also, Bainwol worked to define and execute "the political process behind Ford’s October 2021 selection of U.S. sites for a new F-Series electric truck and three BlueOval SK joint-venture battery plants."
Steven Croley, who oversees Ford’s legal, government relations, sustainability, environment and safety-engineering functions as chief policy officer and general counsel, will oversee government relations until a successor is announced
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Contact Phoebe Wall Howard: firstname.lastname@example.org or 313-618-1034. Follow her on Twitter @phoebesaid . Read more on Ford and sign up for our autos newsletter .