Target shooting: ACD focuses on supporting Ford worldwide

While his counterpart at General Motors Corp. is establishing a global supply empire that would make Caesar proud, Frank Macher, general manager of Ford Motor Co.'s Automotive Components Div. (ACD), is content with his orders to focus chiefly on supporting Ford's worldwide efforts.

Unlike GM's Delphi Automotive Systems, which is trying to get half of its sales outside the corporation's North American Operations, ACD is concentrating primarily on supplying the newly global Ford Automotive Operations (FAO).

ACD is a result of the year-old Ford 2000 program, which brought the previously separate electronics, climate control and plastic and trim products divisions under one umbrella.

In all, ACD offers more than 100 different kinds of products that fall into several categories: climate control, electronic vehicle controls, powertrain, audio systems, driver information, safety and security systems and plastic and trim. Many of these, Ford believes, can be more effectively developed as complete systems.

"Quality, cost and timing advantages are gained through an integrated subsystems approach to product engineering," says Mr. Macher.

When Ford 2000 turned ACD more inward, that changed its agenda toward going after business outside of Ford "unless we feel we can be truly competitive," Mr. Macher says. "We're not after everyone's business with every one of our product lines."

Where ACD once had 30% to 35% of its business outside of Ford, only about 10% of sales are now to other automakers. "The strategy is to keep it at that level," he says.

Japan is ACD's primary non-Ford sales target, Mr. Macher says. In part, that's because the strong yen and political pressure to balance trade are providing the division with a competitive opportunity, but Japan also is seen as a good measuring stick. "We will sell selectively on the outside to prove our competitiveness," Mr. Macher says.

ACD currently does close to $300 million in business with Japanese automakers -- much of that with Ford partner Mazda Motor Corp. "We're shooting for $600 million in (Japanese sales) by 2000, hopefully with other OEMs."

Like its GM counterpart, ACD is investing heavily in the Asia/Pacific region. It has four development centers in Japan, two in China and one in South Korea. ACD also has climate control systems plants in Japan and South Korea and a plastic and trim plant in China.

Being a Ford supplier means being global, and ACD has responded. The division has nine engineering, sales and design offices in the U.S., four in Europe and eight in Asia/Pacific. It has 12 climate-control system plants, nine electronics plants and 17 plastic and trim plants around the world. ACD facilities and joint ventures span five continents and are located in 16 countries, including an Electronics Engineering Liaison Office in Australia and a climate systems JV in Delhi, India.

By focusing ACD's efforts internally, the No. 2 automaker believes it will be able to gain a competitive advantage over its carmaking rivals as it develops new parts technologies and systems. ACD obtained 68 patents in 1994 alone.

One example of proprietary technology is a new generic instrument panel (IP) in the works at ACD. The idea is to create one IP substructure for use across Ford's vehicle lines to cut development cost and time. The generic IP would be made of tubular steel. And although components would be in identical locations from vehicle to vehicle, different part designs and dashboard styling would allow each IP to appear unique to customers. The result would be to cut a whopping 80% to 90% of the IP substructure engineering work, Mr. Macher estimates.

ACD also is going through the same introspection that Delphi experienced in 1991. As part of its strategy to focus on proprietary technologies, ACD plans to exit businesses where it's not competitive. "We're either going to improve or get out," says Mr. Macher. "The non-core businesses have to make money."

The division already has a plan to exit the headliner business. Seat production is another area that represents a "big (competitive) challenge" for ACD, Mr. Macher says. "We have a long way to go to be competitive (in seats)."

Vital to ACD's systems engineering approach is a new test facility in Dearborn, MI (see WAW -- Dec. '95, p.103), enabling ACD to do much more up-front component testing for Ford, Mr. Macher says. The $32-million facility has prototype and testing capability for IPs, consoles, door trim, bumpers and exterior lamps, and additionally has integrated subsystem testing capability for plastic and trim, electronics and climate control products.