World Cars: One Model Fits Buyers Everywhere Ford Unveils the Biggest Reorganization in Its 91-Year History, Merging European and US Operations. the Goal: Lower Production Costs and Designs That Sell, with Minor Changes, Worldwide

By Paul A. Eisenstein, Monitor | The Christian Science Monitor, November 3, 1994 | Go to article overview

World Cars: One Model Fits Buyers Everywhere Ford Unveils the Biggest Reorganization in Its 91-Year History, Merging European and US Operations. the Goal: Lower Production Costs and Designs That Sell, with Minor Changes, Worldwide


Paul A. Eisenstein, Monitor, The Christian Science Monitor


CALL it the global gospel.

Nearly 1,800 ranking Ford Motor Company managers gathered in Orlando, Fla., early this month to learn the details of a sweeping corporate reorganization. Dubbed Ford 2000, it's the biggest shake-up in Ford's 91-year history. When formally implemented Jan. 1, it will consolidate the company's vast United States and European automotive units into a single entity, the new Ford Automotive Operations, or FAO.

If Chairman Alex Trotman's grand vision is valid, FAO will be able to respond more quickly to changes in customer demand. And in the increasingly competitive auto industry, whoever gets there first with the lowest price is in a good position to dominate the market. Mr. Trotman believes that the reorganization will also help Ford slash costs by $3 billion or more a year by developing products that can be sold, with little modification, all over the world.

Ford isn't the only automaker converting to the global gospel. General Motors Corporation also is breaking down long-standing barriers between its nearly autonomous US and European operations. And Honda is reconfiguring its international carmaking strategy. The common goal is to slim down and become more efficient in producing a car - with many standard elements - that consumers worldwide will buy.

Consider Ford's new "Duratech" V-6 engine produced at a plant in Cleveland for both the new Contour, a compact sedan sold in the US, and the Mondeo, a version of the Contour built and marketed in Europe.

"In the past, Ford developed separate engines in Europe and in the US that were unique in virtually every detail but performing essentially the same functions," Trotman explains. "There was an enormous waste in doing that. In the future, we'll have one team design the engine for use worldwide."

Under FAO, product development is divided into five Vehicle Program Centers, or VPCs, each focused on a specific market niche. One "platform team," based at the Ford Design Center in Dearborn, Mich., works on large, front-wheel-drive vehicles, such as the Taurus. Another VPC, based in Europe, handles smaller products, such as the Contour and Mondeo.

Collectively known within the company by their code name CDW27, these are Ford's first "world cars." The Mondeo debuted in Europe in the spring of 1993, and was quickly voted "European Car of the Year" by a panel of international journalists. The automaker launched two American variations in the US this fall: the Ford Contour and Mercury Mystique.

But CDW27 has had its problems: Notably, it took a year longer than expected to develop and cost $6 billion, making it the most expensive new-car line in automotive history. "It wasn't easy getting American and German engineers to agree on things," recalls one Ford engineer, who says compromise came slowly and with great difficulty.

To break down national barriers, Ford is busily transplanting workers. Plenty of European engineers are transferring to the US and a lot of American designers are learning German. But, while Ford may tame national egos, it can't ignore local preferences and needs.

German drivers want cars that can race along at Autobahn speeds, but won't waste $4-a-gallon petrol. US motorists want cars that are fast off the line that ride comfortably at 55 miles per hour.

"The only thing you combine are the parts and components the consumer really doesn't see," says marketing consultant Chris Cedergren, of the AutoPacific Group. Mr. …

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