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
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
"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
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
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. …