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Didn't see this posted anywhere...sorry if a respost

SOURCE: Detroit News

Mulally's Ford looks a lot like Toyota
Friday, July 25, 2008
Daniel Howes

Before he left a 37-year career at Boeing Co. nearly two years ago to run Ford Motor Co., CEO Alan Mulally was a Toyota aficionado: He drove a Lexus luxury sedan; he studied Toyota's production system; he adapted it, surprising some, to the assembly of airliners.

Now his planned makeover of Ford, delivered Thursday along with a record $8.7 billion second-quarter loss, essentially aspires to turn the Blue Oval into a Dearborn-based Toyota Motor Corp. in the space of roughly one product cycle.

The new Ford -- or, as Mulally prefers it, "One Ford" -- would have fewer brands, greater economies of scale, more clearly defined models and a more balanced portfolio of high-quality, fuel-efficient cars, crossovers, hybrids, SUVs and trucks with the eponymous Ford at its center.

Sound familiar?

If Mulally and his team succeed, Ford will have a chance to prosper again and reports of Ford's imminent death, like Mark Twain's, will have been exaggerated. If that's not a big, hairy audacious goal for a company long plagued with sclerotic bureaucracy, vicious executive politicking, timid product decisions and unfulfilled promises, I don't know what is.

The Ford of Alex Trotman and Jacques Nasser and Bill Ford Jr. and Jim Padilla and a host of others who presided nobly over decline is breaking with its past and trying to embrace a leaner, more flexible, more realistic, more Toyota-esque future. That Mulally proposes to do it as quickly as he does is as breathtaking as it is a signal of how serious Ford's predicament truly has become.

Ford going 'all in' to revive
There will be fewer trucks and more gas-electric hybrids. There will be fewer U.S.-only products that no one outside the States, save Swiss collectors and Italian moguls, actually want to own. Fuel-efficiency, crisp product execution and, yes, a recognition of Ford's superior European car fleet will be the new norm -- assuming the troops can execute Mulally's expansive vision.

And if they can't -- partly because they don't really believe that the world has changed, that oil prices will remain volatile, that the era of Explorers and Expeditions and boaty Crown Vics isn't truly over or that Ford as they know it could disappear -- they can't say it's because no one told them.

Mulally did. Consumers did. The success of foreign-owned rivals did. So did bloggers, oil traders, the automotive media, Republicans, Democrats and, to cap it off, the president of the United States with his crack about Detroit's need to build "relevant" products.

Ford's confirmation of its atrocious second-quarter numbers in North America and its planned response to them is equal parts past and future. But the future part is far more important than the abysmal results of the past three months, which have blown massive holes in the financials of just about every automaker operating in the United States -- Toyota included -- thanks to $4-a-gallon gas, plunging home values and slumping consumer confidence.

"It's decisive forward thinking," Mulally told The Detroit News in an interview, a mildly self-congratulatory remark that has the additional virtue of being true (if only part of the story). It's also necessary, because Ford's reliance on gas-guzzling pickups and SUVs, coupled with its regional fiefdoms around the world, were combining to kill the company that put the world on wheels.

Execution will be Job One
And yet. Ford being Ford and this being Detroit, the epicenter of denial, myriad questions loom -- many of which the brass won't touch, at least not publicly.

Can Ford, allegedly determined to embrace the world as it really is, actually make enough money off small cars (even well-appointed and pricier ones) to offset the revenue and profit lost from each F-Series pickup and SUV they don't sell?

If the engineers and manufacturing folks can convert three truck plants to car production and deliver the six European-based vehicles to American showrooms, will the automaker be able to muster the kind of advertising and marketing support that will be needed to persuade U.S. buyers that tomorrow's Ford isn't so yesterday?
MORE HERE
 

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I wish him and Ford a ton of well-wishes with this. I hope it all works. It certainly is a "bold move," the scale of which is needed in this market right now.
 

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Hopefully this is successful for FoMoCo. My other hope is that GM takes a lesson from Mr Mullaly's plan and adapts a successful version of it for "The General".
 

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Discussion Starter · #7 ·
Two more related articles from the Detroit News if anyone is interested in reading them. They've been touched on before on GMI, but these were written for today:

SOURCE: Detroit News

Ford hopes ride on Euros: Plan to jolt U.S. sales with six models from abroad is overdue
Scott Burgess
Friday, July 25, 2008


It's about time.

Ford Motor Co.'s decision to accelerate its automotive emigration plan -- in the wake of a record $8.7 billion second-quarter loss and a shift in consumer demand toward fuel-sipping cars -- shouldn't surprise anyone. The automaker should have opened that border years ago.

The Europeans have had it too good for too long when it comes to Ford products. It's about time they shared.

The European Focus, one of six European Fords planned to come to America over the next four years, will blow the doors off the American version when it arrives in 2010. It's not better because people with an accent build it; it's better because it's a sporty fuel-efficient compact with European handling. That means the suspension is firm, the car sticks to the road through turns, and the steering feels well-balanced and weighted in your hands. Its interior uses higher quality materials and it's more luxurious than the tiny American model. And let's hope the two-bar grille and goofy side vents don't translate onto the new Focus.

Redesigned for the 2008 model year, the European Focus uses Ford's "kinetic design" language, which gives the vehicle sharper edges and a more pronounced face. It's built on the same platform as the Mazda 3 and Volvo C30. It's been proclaimed one of the best-all-around compacts anywhere and speeds the pulse of anyone who drives it.

The American version, which will have improved gas mileage as a 2009 model to 35 miles per gallon on the highway, doesn't cause too many hearts to race. The European version, using a direct injection small four-cylinder engine, possibly turbocharged, could improve even that highway mileage number, though specifics were not released.

The downside for Americans is the European Focus could cost more than the dumbed-down American version. A steeper price hasn't discouraged Europeans. Since it debuted in Europe in 1998, Ford has sold more than 5 million vehicles.

Ford says it will bring a sedan and a four-door hatchback version of the European Focus. Both are good news for American consumers. This, too, could mean the end to the Blue Oval's idiotic aversion to the hatchback. Ford's refusal not to build a Focus hatchback could be costing the automaker more than 50,000 customers this year.

The Transit Connect, a small utility vehicle, will serve business owners well with its versatility and compact size. It's the ideal work van, with an open work/hauling space in the back (143 cubic feet), and a 2-liter four-cylinder engine should help it get around 19 miles per gallon in the city and 24 mpg on the highway. It was scheduled arrive by next summer before Thursday's announcement.

When the Ford Fiesta arrives in early 2010, Ford will finally have an entry into the subcompact segment, something it should have always had. The concept Fiesta is sharper than anything in that group of daily drivers and offers the potential for Ford to tout a car that could get more than 40 mpg.

Another model Ford said it will bring by 2010 is a small car that will fill "white space," meaning it will reach an untapped market.

It's tough to say exactly which vehicle that is without knowing which market Ford is aiming at, but that won't stop me from trying. This could mean the introduction of the C-Max, a small minivan-type vehicle built on the European Focus platform. It would offer improved mileage and falls into a segment of its own, a vehicle that seats five passengers and can carry some cargo, similar to something like the Mazda 5. It's refreshing to see a car company finally admitting that not every family of four needs a third row. Then again, Ford might be referring to the Kuga, a small sporty crossover that has performed well in Europe.
MORE HERE


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Source: Detroit News

Ford revs up big move to smaller cars
Mulally speeds up automaker's makeover after it posts record $8.7B quarterly loss.

Bryce G. Hoffman / The Detroit News
Friday, July 25, 2008

Ford Motor Co.'s dramatic moves to accelerate plans to retool truck plants to build small cars, bring European models to America and rush new fuel-saving technologies to market are steps the company was planning as part of its effort to forge "One Ford" out of its often disjointed regional divisions.

But that does not make the push, fueled by deteriorating economic conditions, any easier or less risky. Speeding up this transformation is a significant and costly challenge for Ford, already struggling to return to profitability before its cash runs out.

Whether a company long accustomed to the big profits generated by its big trucks and sport utility vehicles can ride back into the black on small cars and crossovers remains an open question. And the cultural revolution CEO Alan Mulally is waging inside Ford's Glass House still faces resistance from old guard managers who cling to pickups like a security blanket.

Outside, the economic picture remains grim. And investors already are having a hard time digesting the $8 billion in one-time charges and $1 billion operating loss Ford announced Thursday, which added up to a net loss of $8.7 billion and the worst quarterly performance in the automaker's 105-year history.

It's just a bigger job'
But Mulally insists Ford has a clear plan based on strategies already proven in places like South America and Europe. He acknowledges that speeding it up will be a challenge, but he is convinced it can work.

"It's just a bigger job," he told The Detroit News in an interview Thursday. "We're doing it faster, which gets us to a profitably growing Ford even sooner."

Over the next five years, Ford plans to retool three of its North American truck and SUV plants to produce smaller, more fuel-efficient cars from Europe. It also intends to accelerate the introduction of new fuel-saving technologies like its EcoBoost engines, designed to deliver more power and better mileage by combining turbo-charging and direct injection. It will introduce new hybrids and work to consolidate its global product portfolio.

"It's using proven products that we know and proven technology," Mulally said. "It's utilizing all the assets that Ford has -- and that other people don't have."

The fact that Ford's global integration already is well under way is "a competitive advantage" for the automaker, he said.

But these are all expensive propositions, particularly for a company that has lost more than $23 billion since the end of 2005. Chief Financial Officer Don Leclair said Ford is timing all of the moves to ensure the money it has already invested is not wasted.

"There's no unnecessary investment," Leclair said, explaining that plant retooling is being timed to coincide with the company's product cycle.

The Ford Fusion is a case in point. While the midsize sedan has been relatively successful in the United States, it is nothing compared to the popular and similarly sized Mondeo that Ford sells in Europe. Ford will replace both vehicles with a new model evolved from the Mondeo, but even against the backdrop of this accelerated restructuring, the automaker is waiting until both the Fusion and Mondeo reach the end of their planned product cycle in 2011.

Adapting quickly is vital
David Cole, chairman of the Center for Automotive Research in Ann Arbor, said that converting factories to flexible manufacturing is not as expensive as it used to be.

"They've got adequate financial resources," he said. "They're far enough along integrating Europe and the United States to do it quickly. What they're trying to do is become much more agile and flexible."

The problem, Cole said, is that they are not the only ones doing it. Ford's rival, Toyota Motor Corp., recently announced plans to build more Prius hybrids at a new plant in Mississippi that was originally supposed to produce SUVs. That is the sort of flexibility that Ford can still only dream of, at least here in the United States.

"You need to be quicker than your competition," he said. "They're very much in the game, but we'll see. A lot of this is going to be determined by the speed of their execution and how quickly they can get some of these new technologies to market."

While all these moves have been part of Mulally's vision for the company, working out the details of the accelerated restructuring, figuring out how to get European models to the United States as quickly as possible and getting the United Auto Workers to agree to it all required a lot of late nights for a lot of employees.

Quick fix at Wayne plant
One thing not in the plan was converting the Michigan Truck plant in Wayne to small car production, beginning in December. That was one lever Ford realized it could pull with near-term results.

It may have been impossible to get products like the Ford Fiesta subcompact to the United States any faster than was planned, but Ford could use this factory to boost production of the Focus compact at nearby Wayne Assembly Plant.

"The bottleneck at Wayne Assembly Plant is the body shop," said Ford Americas President Mark Fields. By halting production of SUVs at Michigan Truck, it can use its flexible body shop to begin producing more pieces for the Wayne assembly line as early as next year.

But even some of Ford's newer, more fuel-efficient products are seeing sales slow as a weak economy keeps Americans off dealer lots.

Earlier this week, the automaker delayed plans to add a third shift at its Oakville Assembly Plant in Ontario, which produces the Ford Edge, Lincoln MKX and new Ford Flex crossovers.
MORE HERE
 

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The new Ford -- or, as Mulally prefers it, "One Ford" -- would have fewer brands, greater economies of scale, more clearly defined models and a more balanced portfolio of high-quality, fuel-efficient cars, crossovers, hybrids, SUVs and trucks with the eponymous Ford at its center.


Maybe he get GM to buy into this also! Granted trimming down Ford is nothing like wrangling in 8 divisions with various degrees of relevence... but when you cut through the garbage most of the problems are the same.

Of course the scariest question is even if Ford, GM & Chrysler make all the right moves to improve car offerings and streamline production... CAN THEY BECOME PROFITABLE AND SURVIVE WITHOUT THE RPOFITS ON TRUCKS AND SUV'S???
 

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Howes = brain dead! A pompus big headed overblown analyst, and I told him so!
 

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There's nothing magical about Toyota, but they do run an enviably tight ship, and they have the amazing financials to prove it. Detroit has the capability to duplicate Toyota where Toyota does a great job, and Detroit possesses the talent to surpass Toyota in areas like design. Detroit, until recently, simply hasn't had the leaders with the vision to achieve this, though.

Can Ford, allegedly determined to embrace the world as it really is, actually make enough money off small cars (even well-appointed and pricier ones) to offset the revenue and profit lost from each F-Series pickup and SUV they don't sell?
Yes, and GM can achieve similar efforts, too.

If the engineers and manufacturing folks can convert three truck plants to car production and deliver the six European-based vehicles to American showrooms, will the automaker be able to muster the kind of advertising and marketing support that will be needed to persuade U.S. buyers that tomorrow's Ford isn't so yesterday?
Yes, and GM can achieve similar efforts, too.

If the marketing team does an effective job, can legions of dealers accustomed to letting F-150s, Explorers and even Edge crossovers sell themselves actually develop the kind of smart patter that doesn't denigrate would-be buyers perusing a new Fiesta subcompact? Will consumers give Ford another try?
Yes, and GM can achieve similar efforts, too.

Will Ford's retrograde corporate culture, the frozen middle that has endured wave after wave of cutbacks and layoffs and doesn't have weekly access to Mulally and the top guys who run the place, coalesce behind a transformation plan that does not account for mediocrity or poor execution?
Yes, and GM can achieve similar efforts, too.
 

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I think what Mullay realized that frankly Bill Ford didn't, is that Ford could go out of business. Not just declare bankruptcy, but cease to exist as it always has. When you are falling into the abyss, you need to pull out all the stops, not just the safe ones. I wish Ford well, although I have never been a big Ford fan I want to see them prosper, our country loses enough jobs as it is.
 

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The problem with "One Ford" layed over GM is "What does global Chevrolet turn into?". Opel = Saturn. Chevy Europe equals Daewoo. Chevy North America will not sell elsewhere in the world with current fuel prices, etc.
 

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I think what Mullay realized that frankly Bill Ford didn't, is that Ford could go out of business. Not just declare bankruptcy, but cease to exist as it always has. When you are falling into the abyss, you need to pull out all the stops, not just the safe ones. I wish Ford well, although I have never been a big Ford fan I want to see them prosper, our country loses enough jobs as it is.
Bill Ford knew this.

The problem was that he didn't have the clout to do what Mullally is doing. The Ford hierarchy and fiefdoms had been in place since Henry Ford II ran the company, and he couldn't bring himself to fire people who had been family friends for decades. Consequently, Ford managers didn't take him seriously, and continued business as usual, while feeding Bill Ford BS to keep him placated that things were fine.

Things weren't fine, and once Bill Ford realized this, he knew he had to find someone better for the job.
 

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Ford is really trying to make the smartest moves possible.
I wish them luck.
I think their strategy will succeed.

I still don't believe that they should have junked JLR. Mercury was more expendable.
And they still haven't really tackled any brand related issues yet either.

Ford has taken the proper steps to do what it takes. And that's all that matters.
GM on the other hand, has not.
 

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Discussion Starter · #15 ·
Hopefully this is successful for FoMoCo. My other hope is that GM takes a lesson from Mr Mullaly's plan and adapts a successful version of it for "The General".
I agree -- but that would also mean eliminating a brand(s) - and not sure if GM has the testicular fortitude to do that....
 

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I agree -- but that would also mean eliminating a brand(s) - and not sure if GM has the testicular fortitude to do that....
I've been trying to work that into a sentence since I heard it on Family Guy. Nice job! ;) Go Ford Go! It looks like me dumping some of my stock in GM for more of Ford was the right thing to do!:cool:
 

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Discussion Starter · #19 ·
I've been trying to work that into a sentence since I heard it on Family Guy. Nice job! ;) Go Ford Go! It looks like me dumping some of my stock in GM for more of Ford was the right thing to do!:cool:
Hahahaha. I watch Family Guy quite a bit, but dont know if I've heard him say that! ;-)

Actually, I had a wrestling coach who would say that expression quite often. I guess it stuck with me all these years! LOL Glad you appreciated it.
 

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Hate to say it (really I do) but I think I just joined the "GM needs to lose some brands" camp. I'm an Olds guy first and foremost and I'm still upset about it, but try to ignore all the technical problems associated with shuttering or selling brands and leave out the emotional pain for fans of particular brands or models and picture this as GM in 2010:

Chevy
-regular models cover the gamut from Beat to Suburban
-SS models cover the niche occupied by Pontiac's performance ambitions
Buick
-becomes the near lux to mid lux brand
-quiet tuning base models handle Lexus, Super models attract those who are looking for that "American BMW" that Lutz wanted for Pontiac
Cadillac
-as it is now, the brand that takes on BMW, MB, Audi, and so on

Why no Pontiac?
-Pontiac has been nothing but a step up Chevy for decades. With Chevy stepping up in quality and performance (SS), they can cover that portion of the market
-G5s, Vibes made by Toyota, Torrents, and even the G6 have done little to help the brand's image

Why no Saturn?
-exceptional quality attracts everyone, so "import fighting" Saturn is no longer needed
-the cars being imported for Saturn could be shared among the other brands

Why no GMC?
-well, in case you haven't noticed, truck sales aren't doing so hot
-Literally everything they sell is sold by someone else, mostly Chevy
-PLAN B: continue to sell GMC vehicles and every fleet vehicle is sold as a GMC with a GMC grill

Why no SAAB?
-SAAB could be successful. It should be successful. There's really no reason except that GM has more important things to spend its money on. Hence the brand has been left out in the sun a little too long.
-Buick and Caddy should be able to cover the SAAB market

Problems shutting down brands?
-SAAB can be sold (much like Jag and LR were) so there won't be lawsuits and expenses like with Olds
-Pontiac and GMC are conveniently located in BPG dealerships, so a larger model range Buick could keep dealers happy. Also, offer them Cadillac dealerships unless there's another one in the same town
-There aren't a lot of Saturn dealers to complain. Also, they could be rolled into Chevy dealerships ahead of time to limit the pain to dealers when they're cut.

Sales going elsewhere?
-Saturn has too few sales to really hurt. Ditto with SAAB
-GM will probably lose 25-50% of Pontiac and GMC sales to other brands. This is bad, except my argument is based on the idea that having so many brands hurts across the board, so those sales are being lost anyway, just over a longer period of time.

Enthusiaists angered?
-Yes. But look at this site; we're all pretty angry anyway.

I'm sure people will line up to crucify me, but we know that above all else, GM has been it's own worst enemy these last 30 years. Fewer US brands should allow GM to sharpen its focus on product and offer the best with each vehicle, rather then holding something back to make the Pontiac or GMC better then the Chevy.


Ok, now I'm done and I pledge not to do this again. (Also, you'll note I avoided any "this is what each brand's line-up should look like" lists cause those drive me nuts. Plus, with 3 divisions, each could be a full line maker anyway, and we all know what those kinds of vehicles are, so you don't need to hear me say it.)
 
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