DETROIT –Motor Co.’s global B-car program will utilize a large amount of shared components, as the auto maker attempts to leverage its global scale to drive down costs, a top executive says.
in August launched production of the Fiesta B-car in Cologne, Germany, and plans to roll out the subcompact in world markets in the coming years.
Tony Brown, senior vice president-global purchasing, says the Fiesta will be a true global car, as 78% of its components will be the same no matter where the vehicle is built and sold.
In comparison, when Ford began work on its CD3 global platform in 2003, it had only 38% common parts.
Brown says the common-sourcing level could have been higher had the Fiesta been planned as a global car from the beginning. At the outset, the Fiesta was not slated for North America, but consumer demand for small cars due to escalating fuel prices caused Ford to change its plans.
“The B-car wasn’t all sourced at once, so it’s not all the way there,” Brown tells Ward’s during a recent interview. “It was sourced in waves. But now we don’t source in waves, we source it once, so that will drive that (common-sourcing) percentage up in the future.”
Outside of Europe, production facilities for the Fiesta will be in Nanjing, China; Rayong, Thailand; and Cuautitlan, Mexico. Those plants will begin producing the car for their respective regions between late 2008 and early 2010, Ford says. Fiestas for sale in North America will be sourced from Cuautitlan.
By utilizing common sourcing, Ford is able to demand lower prices on parts due to the sheer volume in which they are produced by key suppliers, most of which are part of the auto maker’s Aligned Business Framework program.
The ABF, launched in September 2005, is designed to strengthen relationships and collaborations between Ford and its suppliers. Additionally, the program will cut Ford’s key supplier base in half while growing business with select parts makers.
Although Ford is working hard to increase its common-sourcing percentage, it won’t always be possible to utilize the same suppliers for every component across the globe, Brown says.
However, the auto maker’s goal is to “commonize” every part for the B-car and other upcoming programs, he says. If an engineer or purchasing official attempts to deviate from Ford’s sourcing strategy, they will have to receive approval from either Brown or Derrick Kuzak, group vice president-global product development.
“There are only two people in the company they have to go to get a deviation approved,” he says. “And I’m thinking Derrick’s deviation pen is working like mine – not very well.”
All global programs now will adhere to the common-sourcing strategy, Brown says, noting the policy not only is good for Ford but for its suppliers, as well.
“As you bring those portfolios together there’s a lot of complexity that will come out of the system,” he says. “So now, from our suppliers, we need to see the value proposition from them, because frankly they’ve got to do the same thing to their business models. They have to flush that complexity through.
“If we can take the level of complexity in our business to them and reduce (it) to help make them a more efficient producer, we all become successful,” Brown says.
In some cases, the global sourcing strategy may require suppliers to establish new facilities closer to Ford assembly plants, he says. “There will be some new supplier facilities, because not everything is shippable from one location.”
With the B-car program well on its way, Brown and his team are working on a C-car platform that will result in the debut of a global Ford Focus small car and other vehicles that, combined, are expected to account for 2 million units of production annually by 2012.