Pontiac Solstice Forum banner

1 - 1 of 1 Posts

·
Mod Emeritus
Joined
·
7,468 Posts
Discussion Starter #1
More of the same as we saw from GM last week...

Ford looks abroad for half of parts

Move to low-cost countries in 5 years will mean more changes for U.S., European workers.

By Daniel Howes / The Detroit News


Ford Motor Co.'s new boss for North America, the 44-year-old Mark Fields, didn't get to where he is as quickly as he has because he pulls his punches.

By 2010, he told industry analysts Tuesday during a private presentation at the Frankfurt Motor Show, 50 percent of Ford's parts will come from low-cost countries -- twice what it's buying today, according to a report by Merrill Lynch's John Casesa.

"Fields outlined a logical long-term strategy to commonize product development, engineering and component sourcing processes," Casesa wrote. "Every auto company in the world is doing this with a vengeance and Ford absolutely must do the same just to maintain its current competitive position."

The bottom line: The Fields era atop Ford's North and South American operations, beginning Oct. 1, probably means more wrenching change for Ford employees awaiting details of yet another restructuring promised by CEO Bill Ford Jr.

And it means yet more bad news for American, Canadian and European parts workers, if not necessarily for suppliers already migrating their businesses overseas.

Put aside all the business jargon, and it comes down to this: Ford's bellwether North American business is not improving fast enough, and it is Fields' job to kick things into high gear, do it quickly and, if necessary, do it with less mercy than Ford has so far.

With Ford's corporate debt rated "junk" for the first time in its 102-year history, and with its North American operations losing nearly $1 billion a quarter, and with the rich U.S. market clearly cooling to the SUVs that underpin Ford's profits, there is little choice.

Ford's next restructuring already is under way. White-collar bonuses and 401(k) matching payments have been suspended; at least 2,750 of its 30,000 salaried jobs are being eliminated; an austere contract with the Canadian Auto Workers appears to have been concluded, if not yet ratified.

Ford is combining its field sales staffs for the Ford, Lincoln and Mercury brands. Its bailout of Visteon, Ford's former parts unit, is complete, and Ford is preparing to sell a portion of former Visteon plants to a third party. Additionally, Ford is selling its Hertz rental car unit to a consortium of private investors for $5.6 billion in cash.

And Bill Ford is moving key execs like Fields into slots to lead the next piece of the restructuring -- streamlining Ford's North American operations by reducing purchasing costs, closing plants, focusing the marketing messages of the Ford, Lincoln and Mercury brands, and crafting common processes, where necessary, for design, engineering and manufacturing.

Officially, Ford doesn't want to talk about what it's doing, preferring to let its actions speak more than its executives. Fields, through a spokesman, declined a request for an interview.

Fields, a Harvard MBA, is the closest thing Bill Ford has to a wunderkind. He brings a disciplined business mind sharpened by tough turnaround assignments outside the United States and largely unencumbered by the still-sclerotic traditions of Ford headquarters.

He isn't being recalled to Dearborn with a mandate to maintain the status quo because that's not what he does, and it's certainly not what Ford needs.

He didn't maintain the status quo at Mazda Motor Co., where he became one of two foreigners (Renault SA CEO Carlos Ghosn was the other when he assumed control at Nissan) to run a Japanese automaker in a culture that is traditionally inhospitable to foreigners running its businesses.

Between 2000 and 2002, Fields mothballed a Mazda plant; trimmed jobs; cured Mazda of trying to be too many things to too few customers; and focused its limited resources on a product-and-marketing renaissance that dovetailed with Mazda's sporty heritage. And now Mazda delivers something it hasn't for a long time -- profits and rising market share.

Then Fields moved through a series of top jobs at Ford's Premier Automotive Group, the collection of European luxury brands that Fields has overseen with mixed results. Volvo is profitable and growing. Land Rover and the tiny Aston Martin are starting to make money. But Jaguar remains a qualified mess, eating cash and losing sales.

Still, Ford's PAG and Ford of Europe are better off now than when Fields arrived. Trained in marketing, he demanded the brands focus their marketing messages; he pushed common processes and components across the brands, including engines, that customers cannot see.

It's dull and boring stuff to the uninitiated and the disinterested. But it's the mother lode in the capital-intensive, high-fixed cost world of the global auto industry. Or, put another way, it's the way Toyota and Honda do things, and the way General Motors Corp. is trying to do things.

Fields' style, according to associates and his track record, is a combination of executive muscle, consultation and a "just-the-facts" demeanor that doesn't necessarily favor the salaried ranks over hourly workers to get results.

He used facts to shock Jaguar lifers, many of whom toiled in the uncompetitive present but lived in the glorious past, back to reality. In the go-go days of the Jacques Nasser regime, they'd been told that Jaguar would become Ford's BMW -- that it would sell 250,000 cars worldwide, that it would be a credible alternative to Mercedes-Benz and Audi, that they could do in three, high-cost British plants what most other automakers (including Volvo) could do in one. And be profitable.

Wrong. Fields closed Jaguar's Browns Lane plant, and he transferred production of the next-generation Land Rover Freelander SUV to Jag's Halewood plant. It was a signal to Jaguar that its aspirations were outsized and a signal to Land Rover that its Solihull plant was uncompetitive and needed to change.

Fields used muscle and facts to push the management and union leaders of Land Rover's Solihull plant to craft a turnaround plan whose progress could be tracked with internal and external benchmarks. When they balked, he threatened to cut off new investment.

Whether such tactics would work with the United Auto Workers remains to be seen. So do the chances that Fields would have as much success focusing Ford's North American brands as he did with Mazda, a smaller company with a more homogenous work force.

But the outline of his roadmap is there, as are the troubles bedeviling the automaker. Now all he has to do is perform on his largest stage yet.
 
1 - 1 of 1 Posts
Top