Moving For'd: Mulally tweaks product plan

**nadepalma** · 11-13-2006, 09:10 AM

SOURCE: http://www.autoweek.com/apps/pbcs.dl.../61113002/1024

Moving For'd
Mulally tweaks product plan to emphasize fueleconomy, reliability and quality
By AMY WILSON | AUTOMOTIVE NEWS
AutoWeek | Published 11/13/06, 8:18 am et

DETROIT -- Six weeks into his full-time stint as Ford Motor Co. CEO, Alan Mulally already has tweaked the automaker's product plan with a focus on improving fuel-efficiency, reliability and quality.

And he's hammering a message to Ford employees shaken by widespread buyout offers and the threat of layoffs: The company will continue to invest in new vehicles.

Ford must overhaul its product plan and manufacturing footprint in order to make money at lower volumes with a model mix that's shifting away from SUVs and pickups, he said.

Mulally acknowledged he has made product changes but didn't provide details in an interview Friday, Nov. 10, with Automotive News.

"It's not like I'm the chief designer after five weeks," said the soft-spoken Kansas native. "But we have come to an agreement that this is where we need to go. We have a lot of opportunity to reduce this complexity" from overlapping platforms and barely related business units such as Ford North America and Ford of Europe.

Mulally is racing to rationalize Ford's product portfolio on global platforms rather than the regional product structure he has inherited.

Higher fuel prices and the growing global demand for oil will shape the Ford showroom of the future.

"We're going to be in this environment for a while," Mulally said. "So clearly, designing and building cars that people really like and that are going to be useful for their lives but also continue to improve (fuel) efficiency is what I think is going to be the most important thing."

Since the former Boeing executive replaced Bill Ford as CEO in September, he has reviewed the product plans for all of Ford's brands and global operations. A high priority for the former aircraft engineer: Make product development more common and efficient globally.

'Nothing but opportunity'

"It's just nothing but opportunity because of the complexity we have and the fact that we have grown up as a regional set of Fords," he said. There's "just a lot of opportunity to leverage talent and the vehicles and the powertrains and the engines across this global Ford."

At Boeing, Mulally was a student of and advocate for the Toyota Production System.

He envisions a Ford with more models made on fewer platforms and fewer assembly lines in plants that are similar across the globe.

"All of a sudden, the utilization goes up, the commonality goes up, productivity goes up, the quality goes up," Mulally said.

But to get there, Ford needs a financing plan that will cover ongoing plant closures and employee buyouts as well as accelerated product development, he said.

That's why Ford is putting together a financing package that, for the first time, will use its automotive assets such as plants and property as security.

Mulally wouldn't say how much Ford is seeking to borrow, and he acknowledged that significant cash burn will continue.

Ford expects to have burned through about $8 billion in cash in 2006, leaving it with about $20 billion at year end. Ford doesn't expect its North American unit to turn a profit until 2009. Ford lost $7.24 billion during the first nine months of 2006.

"You want to make sure you have a robust plan and a reserve, and that's the reason we're going to get some additional secured financing," he said.

Too many dealers

Mulally also said:

Ford needs fewer U.S. dealerships. "By any metric, we have too much distribution system right now, and we have some very unhealthy (dealers)," he said.

He wouldn't say how many retail outlets should be cut or whether Ford should offer bigger financial incentives for dealers to close stores. "We just have to help them, encourage them to consolidate and get back to profitability and get their throughput up," he said. "We just have too many."

Ford must work more collaboratively with suppliers.

"With 70 percent of the dollar value of our automobiles designed and manufactured by our suppliers, there's only one way for all of us to be successful," he said.

"There's only one way to build that quality in, the manufacturability in, the reliability in. We can do that together."

Ford needs changes in the 2007 UAW contract to improve its competitiveness. All issues of the contract from work rules and health care to base wages and pensions must be reviewed, Mulally said.

He also said Ford and the UAW need to talk about whether the Jobs Bank should go away.

MORE HERE

69Firebird400 · 11-13-2006, 09:30 AM

I like this guy a lot. He's jumping right in and he will be very good for Ford. It's kind of amazing that Ford has remained as competitive/viable as they have for so long with so much inefficiency and duplicatin of efforts.

**paul8488** · 11-13-2006, 10:06 AM

Quote:

Originally Posted by nadepalma

Six weeks into his full-time stint as Ford Motor Co. CEO, Alan Mulally already has tweaked the automaker's product plan with a focus on improving fuel-efficiency, reliability and quality.

Hmmm... I like the sound of this guy in general, but are we really giving him props for THIS? Fuel-efficiency, reliability, and quality... are those not sort of given for an automaker in 2006? The fact that Ford apparently DIDN'T have these on their 'to-do' lists is scary. He might do great things with Ford, but I'm hoping he didn't get a bonus for this brain wave.

**nadepalma** · 11-13-2006, 10:17 AM

Quote:

Originally Posted by paul8488

Hmmm... I like the sound of this guy in general, but are we really giving him props for THIS? Fuel-efficiency, reliability, and quality... are those not sort of given for an automaker in 2006? The fact that Ford apparently DIDN'T have these on their 'to-do' lists is scary. He might do great things with Ford, but I'm hoping he didn't get a bonus for this brain wave.

I see what you mean Paul -- and you're right. Though I have to point out that Ford themselves have been all over the map with this. We always hear about how Bill Ford, Jr. is an enviornmentalist, etc. and that's good.

But recently I can remember reading that Ford engineers got an extra 3 or 4 mpg out of their Duratec 23 engine (the version in the Focus), by re-tuning the engine for maximum fuel-economy rather than emissions. That's great (though hard-core tree-huggers and enviornmentalists could argue which is better -- lower emissions with more fuel consumption or the opposite) but just goes to show you what falls through the cracks during vehicle development and improvement.

Let's hope that captain obvious can bring a new perspective to the front office.

01cavalier · 11-13-2006, 11:16 AM

He is making what seems to me to be common sense decisions. Seems that Ford hasn't had much of that in a long time. What would really mean a lot though is if that actually gets through to product, then he deserves props.

GMRULES · 11-13-2006, 12:23 PM

I like this guy too. He doesn't pull any punches but he doesn't come across as an a**hole either.

throwback · 11-13-2006, 12:27 PM

I like everything I read. This is why bringing in an outsider can work. As long as the Ford family backs him up, he will be effective. For example, It's ridiculous that the Euro Ford cars are such good cars, and the US Fords are SO average.

usa1 · 11-13-2006, 12:56 PM

He's in the honeymoon period. Bill Ford had one too. I hope this guy can turn Ford around, but proof will be in a year or two.

Mark

cfch3399 · 11-13-2006, 02:04 PM

We'll have to see if all this talk translates into results. The Mustag V6 was already rated as unreliable by some consumer organization. Let's see if that changes.

FoMoCo Fan · 11-13-2006, 03:27 PM

If you read between the lines, it sounds like we can expect the Euro Focus and the US Focus to be the same sooner, rather than later. (C2 here we come!)

VCDJ · 11-13-2006, 03:49 PM

[quote=paul8488]Hmmm... I like the sound of this guy in general, but are we really giving him props for THIS? Fuel-efficiency, reliability, and quality... are those not sort of given for an automaker in 2006?

No Just ask GM. Fue efficiency sucks at gm. Look how many vehicles they have that get 20 mpg or less in city. How many vehicles does gm have that get 40mpg. Quality has imprved a lot at gm. No question about that. Is it better then toyota or honda?

awalbert88 · 11-13-2006, 06:22 PM

Ford's quality is already at or above industry average according to most sampling measures. Fuel economy obviously needs work, but it does for every car maker, including Toyota and Honda. The real message here is that Mulally isn't bull****************ting anything. He's saying flatout, "here are the problem areas, and here is what will be done about them." And he's saying this publicly. Since when does Ford say anything about their problems to the press?

I can recognize great leadership and management when I see it, and mark my words: Alan Mulally is going to make Ford a very, very serious competitor in the world market once again. He might not make Ford the #1 volume auto manufacturer, or even #2, but by the time he's done with the company it'll be profitable and set for solid continued growth.

I am really glad to see GM turning things around, and now Ford apparently being on the same track gives me renewed confidence in the domestic automotive industry, and renewed hope for an economy that's not purely service-based.

superstreet · 11-13-2006, 07:59 PM

Quote:

Originally Posted by GMRULES

I like this guy too. He doesn't pull any punches but he doesn't come across as an a**hole either.

you´re right

Kappa · 11-13-2006, 08:39 PM

I wonder, maybe making Mulally CEO is Ford's 'Bold Move'. And if he can improve Ford like he says, then let him do his work and see what he does.

DuSpinnst · 11-13-2006, 08:45 PM

An outsider should have a fresher take on Ford.

11-13-2006, 09:10 AM	#1 (permalink)
nadepalma GMI Staff Member Join Date: Jan 2003 Location: NJ Posts: 5,633	Moving For'd: Mulally tweaks product plan SOURCE: http://www.autoweek.com/apps/pbcs.dl.../61113002/1024 Moving For'd Mulally tweaks product plan to emphasize fueleconomy, reliability and quality By AMY WILSON \| AUTOMOTIVE NEWS AutoWeek \| Published 11/13/06, 8:18 am et DETROIT -- Six weeks into his full-time stint as Ford Motor Co. CEO, Alan Mulally already has tweaked the automaker's product plan with a focus on improving fuel-efficiency, reliability and quality. And he's hammering a message to Ford employees shaken by widespread buyout offers and the threat of layoffs: The company will continue to invest in new vehicles. Ford must overhaul its product plan and manufacturing footprint in order to make money at lower volumes with a model mix that's shifting away from SUVs and pickups, he said. Mulally acknowledged he has made product changes but didn't provide details in an interview Friday, Nov. 10, with Automotive News. "It's not like I'm the chief designer after five weeks," said the soft-spoken Kansas native. "But we have come to an agreement that this is where we need to go. We have a lot of opportunity to reduce this complexity" from overlapping platforms and barely related business units such as Ford North America and Ford of Europe. Mulally is racing to rationalize Ford's product portfolio on global platforms rather than the regional product structure he has inherited. Higher fuel prices and the growing global demand for oil will shape the Ford showroom of the future. "We're going to be in this environment for a while," Mulally said. "So clearly, designing and building cars that people really like and that are going to be useful for their lives but also continue to improve (fuel) efficiency is what I think is going to be the most important thing." Since the former Boeing executive replaced Bill Ford as CEO in September, he has reviewed the product plans for all of Ford's brands and global operations. A high priority for the former aircraft engineer: Make product development more common and efficient globally. 'Nothing but opportunity' "It's just nothing but opportunity because of the complexity we have and the fact that we have grown up as a regional set of Fords," he said. There's "just a lot of opportunity to leverage talent and the vehicles and the powertrains and the engines across this global Ford." At Boeing, Mulally was a student of and advocate for the Toyota Production System. He envisions a Ford with more models made on fewer platforms and fewer assembly lines in plants that are similar across the globe. "All of a sudden, the utilization goes up, the commonality goes up, productivity goes up, the quality goes up," Mulally said. But to get there, Ford needs a financing plan that will cover ongoing plant closures and employee buyouts as well as accelerated product development, he said. That's why Ford is putting together a financing package that, for the first time, will use its automotive assets such as plants and property as security. Mulally wouldn't say how much Ford is seeking to borrow, and he acknowledged that significant cash burn will continue. Ford expects to have burned through about $8 billion in cash in 2006, leaving it with about $20 billion at year end. Ford doesn't expect its North American unit to turn a profit until 2009. Ford lost $7.24 billion during the first nine months of 2006. "You want to make sure you have a robust plan and a reserve, and that's the reason we're going to get some additional secured financing," he said. Too many dealers Mulally also said: Ford needs fewer U.S. dealerships. "By any metric, we have too much distribution system right now, and we have some very unhealthy (dealers)," he said. He wouldn't say how many retail outlets should be cut or whether Ford should offer bigger financial incentives for dealers to close stores. "We just have to help them, encourage them to consolidate and get back to profitability and get their throughput up," he said. "We just have too many." Ford must work more collaboratively with suppliers. "With 70 percent of the dollar value of our automobiles designed and manufactured by our suppliers, there's only one way for all of us to be successful," he said. "There's only one way to build that quality in, the manufacturability in, the reliability in. We can do that together." Ford needs changes in the 2007 UAW contract to improve its competitiveness. All issues of the contract from work rules and health care to base wages and pensions must be reviewed, Mulally said. He also said Ford and the UAW need to talk about whether the Jobs Bank should go away. MORE HERE __________________ Email: nadepalma@gminsidenews.com "La vita è come un albero di Natale..c'è sempre qualcuno che ti rompe le palle!" "You cannot help men permanently by doing for them what they could and should do for themselves" -Abraham Lincoln "Democracy is the worst form of government except for all those others that have been tried" -Winston Churchill "In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a Congress" -John Adams

11-13-2006, 09:30 AM	#2 (permalink)
69Firebird400 7.0 Liter LS7 V8 Join Date: Sep 2005 Location: Philadelphia Area Drives: 08 CTS DI RWD Nav, 08 Sienna Limited AWD Nav Posts: 5,639	Re: Moving For'd: Mulally tweaks product plan I like this guy a lot. He's jumping right in and he will be very good for Ford. It's kind of amazing that Ford has remained as competitive/viable as they have for so long with so much inefficiency and duplicatin of efforts. __________________ Autosavant Cars and Technology

11-13-2006, 11:16 AM	#5 (permalink)
01cavalier 6.0 Liter LS2 V8 Join Date: Jul 2005 Location: Portland, OR Drives: 2007 Cobalt Posts: 4,818	Re: Moving For'd: Mulally tweaks product plan He is making what seems to me to be common sense decisions. Seems that Ford hasn't had much of that in a long time. What would really mean a lot though is if that actually gets through to product, then he deserves props.

11-13-2006, 12:23 PM	#6 (permalink)
GMRULES 2.2 Liter ECOTEC Join Date: Jun 2005 Posts: 73	Re: Moving For'd: Mulally tweaks product plan I like this guy too. He doesn't pull any punches but he doesn't come across as an a**hole either.

11-13-2006, 12:27 PM	#7 (permalink)
throwback 3.9 Liter V6 Join Date: Oct 2006 Posts: 978	Re: Moving For'd: Mulally tweaks product plan I like everything I read. This is why bringing in an outsider can work. As long as the Ford family backs him up, he will be effective. For example, It's ridiculous that the Euro Ford cars are such good cars, and the US Fords are SO average.

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11-13-2006, 12:56 PM	#8 (permalink)
usa1 6.0 Liter Vortec V8 Join Date: Jan 2003 Posts: 1,592	Re: Moving For'd: Mulally tweaks product plan He's in the honeymoon period. Bill Ford had one too. I hope this guy can turn Ford around, but proof will be in a year or two. Mark

11-13-2006, 02:04 PM	#9 (permalink)
cfch3399 6.0 Liter Vortec V8 Join Date: Jul 2004 Posts: 1,619	Re: Moving For'd: Mulally tweaks product plan We'll have to see if all this talk translates into results. The Mustag V6 was already rated as unreliable by some consumer organization. Let's see if that changes.

11-13-2006, 03:27 PM	#10 (permalink)
FoMoCo Fan 6.0 Liter LS2 V8 Join Date: Jul 2004 Posts: 4,999	Re: Moving For'd: Mulally tweaks product plan If you read between the lines, it sounds like we can expect the Euro Focus and the US Focus to be the same sooner, rather than later. (C2 here we come!)

11-13-2006, 03:49 PM	#11 (permalink)
VCDJ Level I Members Join Date: Aug 2006 Posts: 699	Re: Moving For'd: Mulally tweaks product plan [quote=paul8488]Hmmm... I like the sound of this guy in general, but are we really giving him props for THIS? Fuel-efficiency, reliability, and quality... are those not sort of given for an automaker in 2006? No Just ask GM. Fue efficiency sucks at gm. Look how many vehicles they have that get 20 mpg or less in city. How many vehicles does gm have that get 40mpg. Quality has imprved a lot at gm. No question about that. Is it better then toyota or honda?

11-13-2006, 06:22 PM	#12 (permalink)
awalbert88 3.6 Liter V6 Join Date: Jan 2003 Posts: 1,193	Re: Moving For'd: Mulally tweaks product plan Ford's quality is already at or above industry average according to most sampling measures. Fuel economy obviously needs work, but it does for every car maker, including Toyota and Honda. The real message here is that Mulally isn't bull****************ting anything. He's saying flatout, "here are the problem areas, and here is what will be done about them." And he's saying this publicly. Since when does Ford say anything about their problems to the press? I can recognize great leadership and management when I see it, and mark my words: Alan Mulally is going to make Ford a very, very serious competitor in the world market once again. He might not make Ford the #1 volume auto manufacturer, or even #2, but by the time he's done with the company it'll be profitable and set for solid continued growth. I am really glad to see GM turning things around, and now Ford apparently being on the same track gives me renewed confidence in the domestic automotive industry, and renewed hope for an economy that's not purely service-based.

11-13-2006, 08:39 PM	#14 (permalink)
Kappa 3.8 Liter V6 Join Date: Sep 2006 Posts: 336	Re: Moving For'd: Mulally tweaks product plan I wonder, maybe making Mulally CEO is Ford's 'Bold Move'. And if he can improve Ford like he says, then let him do his work and see what he does.

11-13-2006, 08:45 PM	#15 (permalink)
DuSpinnst Starship Enterpise Join Date: Jul 2005 Posts: 17,211	Re: Moving For'd: Mulally tweaks product plan An outsider should have a fresher take on Ford. __________________ The moderation here gets an F for FAILURE.

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