Ford 2000 gets mixed reviews

Infinity may sound like the name of a worthy luxury competitor but it also can be a label for Ford 2000 -- the global, pedal-to-the-floor endeavor that aims to wrest world leadership from ancient rival General Motors Corp. and create annual savings of $3 billion by the end of the century. At the halfway point of its first full year, Ford 2000 is getting mixed reviews, if not outright hostility by some suppliers (see Editorial, p.5).

"Ford has been moving toward a global outlook for many years before its official start (Jan. 1, 1995) but there is no end to what we are doing because it is not an organization change," says Jacques A. Nasser, who heads product development under Ford Automotive Operations (FAO), which was formed under Ford 2000 to unite its vast international resources. "It is a mind-set change, an attitude change, a process change, a new way in how we manage the business."

The program, perhaps the greatest revamping in Ford history and certainly the most ambitious since Henry Ford II combined operations in Great Britain, Germany and France into one European entity nearly 30 years ago, is long on hype and hoopla but short on specifics. The reason? Any detail of what has occurred involves new platforms and fresh products, and no Ford executive is about to reveal the company's top secrets. Ford has 22 car and light truck platforms today, and there will be fewer in years ahead but Ford won't say how many.

The global approach calls for five vehicle centers (VCs)-- four in Ford's headquarters city, Dearborn, MI and one in the U.K., which includes the German operation. Europe has the say-so over small front-wheel-drive (FWD) vehicles such as the CDW27 (Contour, Mystique and Mondeo) and the Escort. The Dearborn VCs are responsible for large rear-wheel drive cars, large FWD vehicles, light trucks and heavy-duty trucks.

Complementing the five big centers is a vital section called Advance Vehicle Technology. Conceived by Robert H. Transou, group vice president for manufacturing, it has personnel in each vehicle center to coordinate systems and sub-systems with the vehicle platform teams.

It is believed that the $6 billion expenditure and the agonizingly long seven years it took to bring the CDW27 trio into production were the main driving forces leading to creation of Ford 2000. Mr. Nasser contradicts the criticism that Mondeo and its U.S. offsprings missed the boat. "To me, that Mondeo-Contour-Mystique platform is a success because it demonstrated what can be done with a common platform of engine, transmission, suspension and braking. It showed what can be done with plant efficiencies because we build that vehicle in Europe, the U.S., Mexico and we plan to build it in other parts of the world. Mondeo (which preceded the U.S. versions by more than a year) gave us the confidence we needed to go the next step to Ford 2000."

The CDW27 experience provided lessons in shortening the time required to bring out a totally new car, he says. Lead time is a critical part of the 2000 program. "Our present performance is about 38 months, but we are gearing toward 24 months," says Mr. Nasser. "Just a few years ago we were on a 50- to 60-month schedule. Less lead time has clear advantages. If you are closer to the market in the point of product development, you are more up-to-date in terms of design and technology trends."

When asked if Ford 2000 will help the company avoid another disaster like the Edsel, Mr. Nasser says: "The product development program under Ford 2000 is far more robust (compared to the late '50s when Edsel debuted and died). It starts with the broad voice of worldwide customer input to teams with the power of clear objectives and strategies." He adds that Ford will be developing better products with elements such as reduced investment, reduced lead time and improved communications.

Looking at the 2000 scorecard to date, Ford boasts it has solidified its global strategies, aligned different organizations within the company on most strategies and witnessed an unprecedented level of team activity. Chairman Alex Trotman has disclosed that Ford will add 16 new or redesigned cars and light trucks over the next five years beyond the 32 now offered.

Several years ago virtually the entire U.S. industry embarked on a program where all facets of car and truck making were grouped together; design, engineering, manufacturing, marketing. It was a team concept under the title of simultaneous engineering.

Mr. Nasser says simultaneous engineering remains an integral part of the process today, but that it also encompasses a great deal more earlier involvement of suppliers, manufacturing, machinery equipment manufacturers and marketing. Mr. Transou headed the Ford 2000 transition team and set up the hush-hush seventh floor operation at Ford World Headquarters where titles and ties are virtually taboo and the environment is strictly informal.

Mr. Transou is more explicit about progress to date, especially in his manufacturing arena: "The biggest change we have seen is that manufacturing is now a fundamental part of the process of creating new Ford products and making manufacturing equivalents, and to make our manufacturing operations the best in the world."

He carefully points out that his group has put manufacturing objectives up front along with product objectives to enhance the excellence of both. "We have had no disagreements at all with the product people," Mr. Transou reports. "As a result of better planning and better definition of our products, we have been able to add vehicles in our plan that we didn't have before."

Looking back, Mr. Transou says that in his 30 years at Ford "we had limited regional influences that were far too strong in terms of our global products. We looked at the big Ford Motor Co. and wondered about our inability to have a single, global Escort car. With Ford 2000 in place, those regional chimneys are gone that said we had to have a car for Europe, a different one for North America, South America and so on."

While Ford goes the global route, it will of necessity adapt a number of its products to regional tastes. The Lincoln Town Car of North America is a case in point. The Transit van in Eurpope is another.

Automotive department chiefs, especially designers and engineers, have complained for years about too many opinions by company executives on how a car should look and be engineered. Ford 2000 should alleviate the problem because there are fewer people to influence decisions.

Suppliers have been on the ground floor of Ford 2000 since its inception, and it has forced a major upheaval in their operations. Lear Seating Corp.'s Nick Feles, director of corporate relations, says Lear's Ford department has reorganized to focus on product and work closely with each of the five vehicle centers.

A major tire supplier says it has added personnel and redistributed assignments to visit more people for longer times. It has personnel meeting with each VC as well as the Advanced Technology group. Conversely, the company also saves time with a single visit to each Ford discipline because purchasing, manufacturing and engineering are present at the same meetings. Furthermore, costs and/or fat have been cut by eliminating regional redundancies.

"It's going a lot faster than I would have expected with such a large organization around the world," says George Perry, president and CEO of Siemens Automotive.

"There's a new attitude at Ford on agility and cost structure," says John S. Van Alstyne, general manager of the Ford account at Freudenberg-NOK General Partnership. "They are more actively seeking out win-win solutions and the common ground, not being so dictatorial."

One problem, says Mr. Van Alstyne, is that Ford has done a better job of educating suppliers about 2000 than it has its own employees. "Top management is absolutely singing from the same sheet of paper," he says. "But they haven't communicated it all to the day-to-day purchasing and engineering people."

Some suppliers have other opinions. "We don't know a hell of a lot," one says. "We are still trying to figure it out." Comments a mechanical component supplier: "Maybe Ford is committed to cost reductions instead of purchasing targets. That would be a lot fairer; it stops the pi--contest, which gets you nowhere at the end of a day. Like Ford, we will have to restructure our resources and align our people with their vehicle centers."

Suppliers report that Vice President-Product Purchasing Carlos E. Mazzorin has asked them for 5% annual cost reductions between 1996 and 1999 plus a 50% boost in quality on new parts and 25% on carryover parts. To say that some are upset by these demands is a gross understatement, raising questions about how smoothly Ford 2000 is coming down.

Ford obviously has a way to go in spreading the details of 2000, even though it is generally well known to suppliers. Some 2,000 people are employed in each of the five VCs.

A formal training program has covered most salaried managers -- some 1,800 people. By year's end, 5,000 employees at the supervisory level and higher-ranking people will have gone through Ford 2000 training modules, Mr. Transou reports.

The United Auto Workers union also is playing a major role with some 41 other unions part of the game. "It is imperative that the UAW become a more active participant as we have now begun to develop products on a global basis," explains Mr. Transou. "The union employees are part of the whole upfront planning process."

Ford won't talk specifically about how much it's costing to launch 2000, but Mr. Nasser says, "We have had an almost immediate savings. There are three major areas of savings. First, engineering efficiencies are eliminating overlapping duplication of effort. Second, substantial manufacturing plant and equipment savings with more efficient utilization of plants and component facilities around the world. Third, because of the volumes involved and other efficiencies, we should see major cost reduction in the supplier base."

Mr. Transou concedes that late changes imposed by Ford can be costly for suppliers. But he also sees opportunities for savings by reducing complexity. "Some problems have been discovered in joint studies with our suppliers," he relates. "There are 33 steering wheels in North America alone. We can slash it to three. Some 46 batteries can be cut to 10 or less. There are a whole host of production parts that can be reduced by working collaboratively with our suppliers."

Ford already has announced a major development made possible under Ford 2000: A decision to offer a V-8 in the Explorer sport/utility vehicle (SUV) during 1996. There are others, but Mr. Nasser says he can't talk about them because they are coming further in the future. Until then, the full impact of Ford 2000 cannot be determined.