Ford's global future rides on next generation Focus

In the long history of Ford Motor Co., few cars have had more riding on them than the all-new Ford Focus the automaker will unveil today at the North American International Auto Show.

The sporty compact is the lever CEO Alan Mulally hopes will transform a company known for its gas-guzzling pickups and sport utility vehicles into one focused on fuel-efficient and fun-to-drive small cars. The 2012 Focus also is the centerpiece of Ford’s new global product plan and the first real test of Mulally’s “One Ford” strategy, aimed at combining the company’s global resources as never before.

Ford will sell mostly the same cars and trucks worldwide, tweaked to meet regional tastes, instead of building different vehicles for each region. Many will be based on the Focus platform.

In one of the biggest gambles undertaken by an automaker, Ford plans to build 2 million cars and crossovers off the new architecture annually by 2012. If it succeeds in hitting that mark, the payoff will be enormous in economies of scale. But reaching that goal requires unprecedented cooperation and collaboration within a company notorious for being divided into regional fiefdoms.

“This Focus was designed from the start to leverage all of our global assets,” Mulally told The Detroit News. “It exemplifies our transformation.”

Ford put the world on wheels with its Model T, but the automaker’s efforts to create a modern world car — at times, one of its major goals — have failed because of corporate in-fighting and turf wars.

The first Focus, launched in Europe in 1998, became a breakout success on that side of the Atlantic, but the car that arrived in U.S. showrooms two years later had been stripped of content and became an embarrassment.

“They didn’t have global discipline then, and the cars devolved into separate vehicles,” said analyst Jim Hall of 2953 Analytics LLP in Birmingham. “They’ve got it now. This is the biggest bet they’ve ever made, but it’s going to pay off because, this time, they have the discipline to do it right.”

What changed the equation was Bill Ford Jr.’s decision to step down as CEO in 2006 and turn the company over to Mulally, an aerospace engineer who was running Boeing Co.’s commercial aviation division.

“At Boeing, we didn’t have a separate 737 for Europe, or Asia or the United States,” Mulally said. “The first question I had for Bill was, ‘Do you want to compete worldwide?’ We absolutely agreed that we had these great assets worldwide and if we pulled them together and leveraged our size and operated as a global company, we could compete with the best in the world.”

They decided that Ford would sell the same cars and trucks worldwide. Products like the iconic Mustang would be limited to certain markets, and vehicles would be tweaked to match local needs and regulations. The days of one Focus for America and another for Europe were over.

So were the days of regional conflict. Mulally tapped Derrick Kuzak as his global car czar and gave him control of production plans worldwide. Kuzak had been pushing for a global product development system that would standardize best practices and ensure that one person was responsible for each element of a project worldwide.

Kuzak also began reworking the automaker’s cycle plan to eliminate duplicate vehicles. Ford unveiled its new car strategy in mid-2008 as gasoline prices topped $4 a gallon: It would retool truck factories in Mexico, Kentucky and Michigan to produce a new generation of small cars designed in Europe.

Most will be based on the underpinnings of the new Focus, which will replace three platforms built around the world. Along with the Focus, up to nine other cars and crossovers will be built off the same architecture.

“It will make us globally competitive like never before,” Kuzak said.
Thinking globally

Delivering on that promise forced Ford to rethink every aspect of the Focus launch, starting with the vehicle’s design. That task fell to Martin Smith, a British designer based in Cologne, Germany. While past efforts to create a world car were bland attempts aimed at appealing to the lowest common denominator, Smith says consumer tastes are converging worldwide — thanks largely to the Internet.

“There’s a kind of global cool,” Smith said. “Customers are more unified than you might think in what they want in a vehicle.”

Proof of that came when Ford showed the first Focus prototypes to consumer panels in Europe, the United States and Asia. The participants were universally impressed, although Smith acknowledged that global tastes are not yet fully uniform.

Consumers in different countries demanded different colors and interior materials. Chinese customers, for instance, favored a finer-grained plastic for the instrument panel, but that looked cheap to Americans. Ford settled on a material acceptable to everyone, but nixed a yellow leather interior popular in Shanghai.

“We do find that the Chinese market is very difficult to accommodate,” Smith said. “Aligning North American and European tastes is a little easier.”

Engineering the new Focus brought more challenges, particularly with varying safety rules and emissions requirements around the world. Designers in Europe placed the front windshield further forward, but Ford global small car chief Gunnar Herrman said his engineers had to move it back to meet U.S. crumple zone standards.

Tony Brown, Ford’s global purchasing chief, said the give and take is worth it because of the economies of scale that come with a truly global plan. About 80 percent of the parts will be the same on every car worldwide, and 75 percent will come from the same suppliers.

“It’s a massive coordination effort that we have to do globally, but this is where the real leverage is,” Brown said. He declined to quantify the cost savings, but analysts say the potential is huge.

In a recent note to investors, analyst Brian Johnson of Barclays Capital said Ford’s strategy “provides the company with improved scale that is competitive with other global” automakers.
Building locally

All of this creates new challenges for manufacturing. Plastic trim made in Europe must fit perfectly with sheet metal stamped in Michigan. To make sure it does, Ford relied on a virtual manufacturing system that allowed production managers in Europe, Asia and the United States to build the car in cyberspace before the first prototype was assembled.

“The idea is to really get the bugs out in the virtual build,” said Jim Tetreault, a man uniquely qualified to lead the effort. The former head of manufacturing for Ford in Europe now holds that job in North America. Even he is daunted by simultaneous production launches in two countries.

“If you have a success, you have a success in all the regions,” Tetreault said. “But if you make a mistake, you make a mistake in all the regions, too.”

Focus production is to begin the same week later this year at factories in Germany and Michigan. Later, it will ramp up in plants in Russia and China.

Last month, Ford Americas President Mark Fields showed reporters around the former Michigan Truck Plant in Wayne, where Ford is investing some $550 million to transform the factory into a state-of-the-art small car facility.

“Just a year ago in this plant, we were producing Navigators and Expeditions,” he said. “One year from now, we’re going to be producing the new Ford Focus.”

Source: Detroit News

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