Ford conducts reviews of overseas plants
Financial Times (London)
By Jeremy Grant in Chicago/Additional reporting by James Mackintosh in London
Published: February 13 2003
Ford Motor Company is conducting a sweeping review of its international operations outside North America, including a re-assessment of its network of manufacturing facilities, in an effort to improve profitability.
The development is another sign of the more aggressive approach by David Thursfield, drafted in to the carmaker’s US headquarters from Ford Europe as head of global operations, towards restoring Ford to profitability by mid-decade.
Elena Ford, director of business under Mr Thursfield, said: "There’s a very broad look at what exists in each place and the best way to drive the business properly and profitably,"
The world’s second-largest carmaker is in its second year of a tough restructuring after posting a $5.45bn net loss for 2001. Ford has 111 manufacturing plants worldwide, 68 outside North America.
Excluding charges, Ford made 8 cents a share in the fourth quarter of 2002 and has set an ambitious target of 70 cents a share by year-end, partly through accelerated cost-cutting.
Ms Ford, a cousin of Bill Ford, chief executive, said the review, which started a few months go, was still in its preliminary stages. It was "for business reasons more than cost cutting reasons, to drive the business forward in the competitive environment that exists today".
Ford would know "by the spring" what actions would be needed as a result of the review. "We’re just figuring out what’s there [in international operations] and what’s not there.
We’ve laid out charts showing how many plants we have in Asia-Pacific, Europe, and South America and what we are building in those plants, what everybody’s product development plans look like - are we synchronized, are we not synchronised?" she said.
The review includes Premier Automotive Group, Ford’s loss-making portfolio of luxury brands such as Volvo, Land Rover and Jaguar. Mr Thursfield assumed operational responsibility for PAG in November.
In one sign of how the review may already be affecting some parts of Ford, the carmaker yesterday unveiled a new management structure at Jaguar with the appointment of Bob Dover, as chief executive, replacing Mike Beasley, who will retire from the company. Ford said the rapid growth of PAG will slow as Jaguar, Land-Rover, Aston Martin and Volvo shift their focus to cost-cutting. PAG, which is based in London, said it would attempt to share more components and purchasing within the group to reduce costs.
Ford this week also sought to end speculation about the future of its ailing Mercury brand by announcing plans to launch four new products over the next three years.
The first two vehicles, a Monterey minivan and a Montego passenger car, were unveiled at the Chicago Auto Show on Wednesday. Typically for many Mercury vehicles, they are based on similar vehicles sold under Ford’s "Blue Oval" product range.
They will be followed by a new small sport utility vehicle in 2005 and another mid-sized passenger car in 2006.
Although Ford claims that the Mercury brand is profitable, its share of the US vehicle market fell to 1.6 per cent last year from 1.8 per cent in 2001. That, combined with a lack of investment in new products had led to complaints from the carmaker’s network of 2,600 Lincoln-Mercury dealers, as well as persistent speculation that Ford might abandon the brand.
Jim Padilla, president North America, said: "We didn’t do a great job with Mercury over the years but we’re leading a product renaissance."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....