Operations

Ford Announces New Initiative to Simplify its Vehicles

LCT Staff
Posted on January 30, 2008

DETROIT — At a town hall meeting with employees last week at the Ford Motor Company headquarters in Dearborn, Mich., Alan Mulally, the chief executive, pulled out a laminated card emblazoned with the words “One Ford” and the company’s blue oval logo.

The new campaign is part of Mulally’s plan 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 recently announced, 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.

“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.

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, 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.

Ford’s product development chief, Derrick Kuzak, said at a recent industry conference that the automaker would reduce its number of global vehicle platforms by 40% by 2012.

“Seventy percent of our total volume will be on eight platforms by 2012,” said Mullaly. “You can only imagine what a tremendous improvement that will be.”

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.

SOURCE: New York Times

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