Phase Two

Prompted by external forces such as increased competitiveness, Ford Motor Co.'s revitalization plan enters its second phase with a goal of accelerating cost-reduction and product-quality improvements.

“Last year was about getting the house in order and stabilizing the company,” Nick Scheele, president and chief operating officer tells analysts. “This year is about recognizing a rapidly evolving environment and accelerating our efforts.

“We're putting additional contingency cost measures in place to ensure that we meet our objective regardless of conditions.”

Ford has identified more than two dozen issues that require attention, Scheele says. And they fall under two categories — issues that affect the entire organization and those that are “more directly related to individual profit centers.”

“This isn't a new plan,” he adds. “It's not a change in the strategic direction. This is an addition, a refinement that we fully contemplated having to implement as we moved into the plan at this time last year.”

Jim Padilla, president-North America, and his Europe-based counterpart, David Thursfield, will act as “champions” for the initiative, which — Scheele adds — recognizes that “ultimate success at Ford will be based on the product revival.”

Central to the auto maker's product lineup is the successful launch of the next-generation F-150, scheduled for this year. But executives also placed significant emphasis on the contributions of Premier Automotive Group brands, such as Lincoln, which is establishing a new direction exemplified by the Navicross concept shown last month at the North American International Auto Show in Detroit.

Meanwhile, Ford forecasts a break-even year for 2003, based on industry volumes of 16.5 million in the U.S. and 17 million in Europe.

It also pledges to increase market share — a development that appears more likely during the second half of the year — and improve by at least $500 million its automotive cost performance.

Additionally, Ford reveals it fell just $8 million short of an additional $1-billion cost-cutting effort decreed by Chairman and CEO Bill Ford Jr., late in 2002.

North American operations accounted for $677 million of the $992 million swing, while international operations slashed $315 million.