The New York Times-20080125-At Ford- Chief Intends to Get Its Units in Sync
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At Ford, Chief Intends to Get Its Units in Sync
At a town hall meeting with employees on Thursday at the Ford Motor Company headquarters in Dearborn, Mich., Alan R. Mulally, the chief executive, pulled out a laminated card emblazoned with the words One Ford and the company's blue oval logo.
Who's got theirs? he asked the group, according to two people in attendance. Right on cue, the audience reached into pockets, purses and wallets and held them high.
The cards, passed out to employees last week at the start of the Detroit auto show, are Mr. Mulally's idea to help focus his company on what he says is its next big priority: simplifying the fleet of vehicles it sells around the world, and better integrating its far-flung divisions.
Much of his focus since joining Ford 16 months ago has been on cutting costs and jobs. And more buyouts were announced on Thursday, when the company reported that it had narrowed its overall losses in 2007 to $2.7 billion, a major improvement after its wrenching $12.6 billion loss in 2006.
But with the shrinking of Ford's core United States business nearly done, Mr. Mulally is eager to get its global operations hitting on all cylinders.
The real work at Ford going forward is that we continually integrate the four companies around the world, he said in an interview on Thursday.
Mr. Mulally is modeling his One Ford idea on his former employer, Boeing, as well as on Toyota's vaunted product-development system. A self-proclaimed admirer of Toyota, Mr. Mulally said the company could cut costs further by copying the Japanese automaker's strategy of building differently styled vehicles on similar basic chassis structures.
Toyota grew up as a global company, he said. They tailored their vehicles for unique regions of the world, but the fundamental platforms are the same.
Ford's product development chief, Derrick M. Kuzak, said at an industry conference on Wednesday that the automaker would reduce its number of global vehicle platforms by 40 percent by 2012.
Mr. Mulally declined to specify how many platforms Ford had now or discuss its goal for consolidation. But he gushed at the savings the company could realize by spreading its costs over more international models.
Seventy percent of our total volume will be on eight platforms by 2012, he said. You can only imagine what a tremendous improvement that will be.
The first fruits of his efforts were displayed at the Detroit auto show, when Ford unveiled the United States version of its Verve subcompact car, which was designed in Europe.
The Verve will be introduced in various international markets over the next three years, with its likely United States arrival in the scheduled for 2010.
Ultimately, he said he hoped it would sell a million Verves a year worldwide, rather than 200,000 in just one market. Then you are really going to be competitive, he said.
General Motors, the largest of Detroit's Big Three, is also in the midst of an intense effort to integrate its global engineering, design and assembly functions.
Ford's international divisions have behaved independently for the most part ever since Henry Ford first established stand-alone operations in Britain and France in 1911.
Previous attempts to develop a world car at Ford have suffered from bureaucratic infighting and cost overruns.
But as an industry outsider, Mr. Mulally was stunned by the autonomy of the international units from the day he arrived at Ford in September 2006.
One of his early meetings was with a longtime Ford designer, James M. Morgan, who had co-written a book about Toyota's product expertise. At Mr. Mulally's request, Mr. Morgan brought along designs of all the different hoods used on Ford models worldwide.
I said, 'They're all different,' Mr. Mulally recalled. Do they need to be all different?
In the past, Ford executives would privately demean the chances of a full-scale integration of the company's far-flung international units.
But Mr. Mulally, brandishing his One Ford card, seems determined to make this plan stick, since it will be an important part of his strategy to tighten Ford's cost structure and return to profitability in 2009.
Ford still posted a pretax loss of $3.5 billion in its North American market, despite slashing 32,800 hourly jobs through buyouts and retirements.
The automaker, which lost its No. 2 ranking in United States vehicle sales to Toyota in 2007, said on Thursday it would offer buyouts to its remaining 54,000 unionized United States workers.
While the company declined to say how many more jobs it hoped to reduce, analysts said the cutbacks are a critical component of Ford's Way Forward reorganization plan. It's one of the few areas of Way Forward that appears to be tracking, said Peter Nesvold of Bear Stearns.
Ford's other global operating units, however, are producing solid results.
For the year, Ford reported pretax profits of $1.2 billion in South America, $997 million in Europe, and $40 million in its Asia Pacific and Africa division.
[Illustration]PHOTOS: Ford's subcompact Verve, designed in Europe, will be sold worldwide.(PHOTOGRAPH BY JONATHAN LURIE/BLOOMBERG NEWS)(pg. C1); Alan Mulally, the chief executive of Ford, spoke Tuesday at the Automotive World Congress in Detroit. Ford reduced its losses. (PHOTOGRAPH BY JEFF KOWALSKY/BLOOMBERG NEWS)(pg. C7)