Back in the '70s,Motor Co. had a grand idea: Engineer the upcoming 1981 Escort as a "global car" for Europe and the United States.
But engineers on both sides of the Atlantic had their own priorities, and their own way of doing things. By the time the cars arrived on the market, there was almost nothing in common except their basic styling. The result: A costly blunder.
In the early 1990stried it again with the new CDW27 program. Europeans did the basic engineering and produced the Mondeo for their home markets. It was an instant hit. A year later the car moved into production at Ford's Kansas City, MO, plant, emerging as the Contour and Mystique. They've done OK, but not spectacularly.
Although Mondeo had to be modified to meet U.S. standards and customer preferences, it was as close as the No.2 automaker had ever come to engineering a common platform for global production. The totally revamped 1999 Mercury Cougar will be built on the CDW27 platform in Flat Rock, MI, sharply reducing Ford's investment by extending the use of existing engineering and hardware. That's what global engineering is all about.
Armed with what it learned from CDW27, and three years into the Ford 2000 global product-development scheme, Ford is now gearing up to launch an all-new replacement for Escort in Europe and the U.S. for 1999.
The current Escorts are unique. The European model was engineered there; the U.S. version was engineered byMotor Corp., Ford's 35.4%-owned affiliate.
In contrast to the '81 and more recent iterations, Ford says that this time everything is in sync, and that the European and U.S. cars will share nearly all components and modules, except those necessary to meet local regulations and buyer tastes.
They also will get a new name, reportedly "Ikon." The current U.S. Escort will continue in production while Ford ramps up the new model.
Going global is hardly a new idea for American automakers, of course. They've been "global" in many respects throughout this century: exporting and/or assembling and engineering cars and trucks in foreign territories. That's different from developing basically the same vehicles that can be built and sold across international borders, however.
As Ford's stuttering steps suggest, their attempts at such "global cars" have been far from successful.
Corp. engineered a common model, the J-car, in the early '80s - built in six countries but never tried again. Instead, GM has relied on selective forays using U.S. and German designs or those of its Japanese affiliates, Motor Corp., Motor Co. Ltd, and SAAB.
Corp., primarily via acquisitions, mounted a global strategy in the '60s and '70s, but retreated and sold off most of its overseas operations during its escape from bankruptcy in the '80s.
The world, of course, has changed. It's a world where, under relentless competitive pressures, wasted time and cash simply can no longer be tolerated; where buyer preferences are coalescing; where computers and communications like the Internet are breaking down barriers to international product development programs; and where commonality in processes and products is vital to leveraging resources - and ultimately to the bottom line.
Each of the Big Three U.S. automakers is taking a distinctly different approach to global engineering. At Ford, it's one-size-fits-all - with some sensible exceptions. At GM it's more a tailored approach - fitting the pieces together where it seems to make the most sense. And at, it's a fortress America strategy, with engineering centralized at its Auburn Hills, MI, Technical Center.
First, let's look at Ford.
Ford Gets 'Common'
Ford's global engineering strategy is complex, but it's based on some fairly simple principles: abundant technical resources and economies of scale.
If there's a single jump-start, it's the CDW27 program, which proved that despite big obstacles, Ford could engineer and build a car that could be marketed worldwide.
Simultaneously, the company was forging ahead with its Ford 2000 globalization strategy, which gave birth three years ago and included setting up specific vehicle development centers in Europe and the U.S. It also included much more, such as sharply reducing platforms and engines (see chart p.38).
Jacques Nasser, elevated to president of Ford Automotive Operations 15 months ago, led Ford's global product development (PD) in the early going under Ford 2000. In January one of his chief lieutenants, Richard-Parry Jones, who had headed the small-car PD center, assumed his boss's old job.
A 46-year-old British native with 28 years at Ford, Mr. Parry-Jones is a bright, articulate hands-on executive with an acute sense for detail. In a lengthy WAW interview, his first since assuming his new post, Mr. Parry-Jones puts it succinctly: "The skeleton hasn't changed; the frame hasn't changed." Rather, what Ford's doing, he says, is adding "texture," and that means taking a hard look at the modules that go into Ford vehicles in developing them for world markets - reducing the number of component sets, in the process matching them to meet specific vehicle requirements and local conditions.
That's different, he says, from a "supermarket" where Ford teams would be limited to "shopping" for generic items. If beefed up brakes, specific lamps or heavy-duty air conditioning systems are required, Ford takes into account these differences in engineering the components and modules in the first place.
Take courtesy lamps, for example. Ford has narrowed down the number of sets available to three worldwide that are produced in local markets and thus readily available. The idea is to reduce shipping costs and gain advantages of scale and still meet interior lighting requirements.
Although Ford must engineer the ductwork, outlets and other parts of each vehicle's heating-ventilation-air conditioning (HVAC) system, the HVAC module itself can be the same in many cases. "You don't engineer it for an Escort in North America and an Escort in Europe, because the performance centers are the same, The major difference is the installation rates (nearly 100% in the U.S., only 10% in Europe).
Differences in fuel costs and performance also require tweaking basically the same engines used in Europe and the U.S., he says. Cam timing in Ford's Duratec V-6 was changed to maximize power in European models, for example, while in the U.S. version variable timing is used on the exhaust cam of the 2L 4-cyl. to get the best "balance of emissions, performance and economy, he says."
Ford has yet to introduce a fuel-stingy, high-performance turbocharged direct-injection diesel (TDI) to compete with a number of TDIs from automakers such asAG and GM's Adam Opel AG. But the TDI technology it has developed "will be deployed shortly, as you will see," from a new facility in Brazil, says Mr. Parry-Jones.
Jaguar andalso are an integral part of Ford's pursuit of commonality - but only up to a point. Jaguar is using Ford components, but none that are evident to buyers, he says. And Jag will continue to have its own engines, the new V-8 introduced last year and possibly a V-6 spinoff for small Jags coming early in the next century.
"You can go too far in using common hardware," he observes. Nor does Ford plan to tinker too much with Mazda's engines, some of which are totally unique to the Japanese automa-ker such as its celebrated Miller-cycle powerplant. While the two companies are moving forward in com-monizing platforms and drivetrains for turn-of-the-century models, "It ain't going to happen overnight, because both companies have large assets already deployed on existing architectures and platforms," he says.
Now that Ford is managing the Japanese company, a Mazda Advisory Board comprised of senior management from both companies has been organized. Meeting four times yearly, the group looks for joint opportunities and how each can become more efficient, he says.
Despite its focus on commonality, Ford naturally must configure vehicles to meet local conditions. The difference these days is that the work is done up-front in product development. Thus "It took a very low level of engineering change" to adapt Ford vehicles built in Brazil, he points out. Among the changes in the Ranger pickup that recently went into production there: calibration for Brazil's ethanol fuel, ride height, tires and retuned suspensions for gravel roads.
Cultural differences naturally still exist in Ford's far-flung engineering operations, but Mr. Parry-Jones says when engineers from Dearborn, Great Britain and Germany get together, discussions focus on core issues such as reliability, "which doesn't know national boundaries."
Beyond that, "the great thing about engineering ... is the common language that binds our culture is physics. The physics don't change, the fundamentals don't change. And we've arranged things so that the skills we have in each country are complementary rather than duplicated."
GM's New Vehicle 'Alliances'
Although not widely reported, GM a year ago formed global car and truck "alliances" aimed at developing and producing vehicles worldwide by linking together its huge three product development centers in Warren and Pontiac, MI, and Russelsheim, Germany. Supporting them are eight regional engineering centers located in Oshawa, Ont.; Shanghai; Melbourne; Trollhattan, Sweden, Port Elizabeth, South Africa; Fujisawa, Japan; Sao Paulo, Brazil; and Toluca, Mexico.
Thomas Stephens, vice president of engineering for the GM Truck Group based in Pontiac, is one of four senior executives in GM's North American Operations (NA) that form a new executive design and engineering council dovetailing with International Operations (IO) based in Russelsheim.
Under the new setup, Mr. Stephens coordinates truck engineering on a global basis. His partners in the U.S. are GM engineering executives responsible for Powertrain, also based in Pontiac, and the Car Group and GM staff engineering located at the GM Technical Center in nearby Warren.
What the three big engineering "campuses" - two in Michigan and one in Germany - are charged with is "strategically running the engineering of the corporation," says Mr. Stephens.
How does it work? In the case of the Truck Group, engineers travel to GM regional centers in Mexico and Brazil and to itsMotor Co. Ltd. center in Japan to map global strategies. "We get together six times each year and work on issues from A to Z" to optimize the design and development of trucks worldwide, he says.
"It's a huge challenge because there are so many different governments and no unified standards," he emphasizes. One major focus: A full understanding of what each nation's or region's requirements are. "We have to understand that so we don't design 100 different ways but only once," he says.
Take, for example, local conditions. GM is mapping the world, checking off items such as temperature variations, dust and roads. It's also cataloguing emission standards, fuel prices and so forth.
This alone already "has saved us countless engineering hours" by avoiding duplication and pushing common processes, components and module designs, Mr. Stephens underscores.
"We are getting very good, very fast and our competitors should take note. GM is not just a series of loose confederations anymore; it will be 'Corporate GM' from now on," he vows .
Lingering turmoil in Opel's ranks notwithstanding, Mr. Stephens notes that the German subsidiary previously would have had to engineer for varying regional emission standards, but no longer. GM has a small group with expertise on worldwide standards that Opel can use as a resource. A central safety center specializes in that area for all GM operations.
"Now we can develop five or six emission packages instead of hundreds," says Mr. Stephens, bringing down costs and boosting quality, both essential to compete in world markets.
Just as importantly, engineering rationalization is driving down GM's product cycles - the so-called "speed-to-market" mandated these days to keep up with the competition. Mr. Stephens won't say how long it takes GM to get an all-new vehicle into production, conceding that "we're still not the fastest." Even so, he figures GM has slashed development time by 30% in the last five years.
He attributes part of that to increased computer capabilities and a common computer system throughout its operations. "You can't move fast without math-based systems. You can do a lot of optimizing on the tube before you build expensive hardware," he observes.
Mr. Stephens reveals that GM already has designed an entire new vehicle via computer. He won't say what it is, but it will bow in 2001. "We've done it without clay. Our confidence level is much higher now that we're going to be right and won't have to build it, break it and fix it like we've always done," he adds.
Sorting out who does what, and where, is the key ingredient in GM's global scheme. Isuzu is tied closely to the truck side, Opel to cars. And Mr. Stephens says cultural differences aren't big barriers. "We are all just people trying to do a job. First off, it's using common sense. We're looking at where our strengths are and how can we share in every major area of the business. We have experts that can tell us what's available, where it's available or where it can be acquired. It all ties together."
Chrysler Goes it Alone
Chrysler has manufacturing and assembly tie-ins with several companies including Beijing Jeep in China, Steyr (minivans and Jeep Grand Cherokees) in Austria and(engines) in Brazil.
But unlike Ford and GM, engineering and product development are centralized in the U.S.
"We're in a little different situation," says Chris P. Theodore, vice president for platform engineering. "We're growing in global markets and we've got a fresh start; we're not tied to old baggage. All engineering is centralized in the States, but we use this to get our engineers to understand what we need globally. We go out to Europe or wherever and look at duty cycles, usage and other requirements. We're starting to design cars and trucks to meet the most demanding requirements rather than those in a single market."
Take brakes, for example. European demands for performance and pedal feel "far surpass what North American customers require, so we're probably better off meeting the toughest standards than tweaking them for the U.S. You can save by not changing."
Richard A. Winter, general manager for international product planning and service and parts, says Chrysler's overall strategy is to remain an American car company with American products for global markets.
"We don't want to go into other countries and say, 'Hey, we're.' We are selling American cars," he says.
But to be successful, Chrysler is filling in pieces of the puzzle by tailoring its U.S. vehicles for sale in foreign markets. Thus, diesels are offered in selected European models, and modifications are made in performance, handling, tires, wipers, headlamps and other systems.
"They do more high-speed driving in Europe, so if you develop a wiper system for that market, you can use the same basic design for the U.S.," says Mr. Winter.
Chrysler also studies diverse weather, road and driving conditions, and puts those into its engineering planning hopper.
"If you have trouble in Phoenix (where Chrysler has a hot-weather proving ground nearby), then you're going to have trouble in the Middle East" and other hot climates, he says.
And what Chrysler is learning is being engineered into new vehicles. The revamped 1999 Neon, for example, was designed at the outset to meet global requirements.
That's the way the world is spinning.