Ford shakes up product development; new team wants to share parts, save money, speed - Ford Forums

Stacy94PGT · 10-17-2002, 07:58

By MARY CONNELLY
Automotive News
Chris Theodore is reorganizing Ford Motor Co.'s product development in North America with a clear but difficult goal: The company's vehicles must share more parts.

Sharing parts saves money and manpower. The capital netted - financial and human - can be used to put more vehicles into Ford, Lincoln and Mercury showrooms faster, Theodore maintains.

Ford has long sought to share common parts and systems among vehicles. But the job took on urgency with the company's turnaround and after April 2002, when Lincoln Mercury rejoined Ford brand product development. The reorganization carries risks, though, because the new round of change is the latest in a series of organizational upheavals over the past seven years.

Theodore, 52, Ford vice president of North American product development, wants vehicles updated on carryover platforms to share as much as 60 percent of components. Major redesigns will share an estimated 30 percent to 40 percent of components.

"We have laid out a timeline for when commodities and components will be shared in the future," Theodore said. "I can tell you when two widgets are going to converge to one widget. That is going to free up resources because we will have one widget engineer instead of two widget engineers. I can re-deploy that person to create more product."

Here is how Theodore is reorganizing the company's huge North American product development bureaucracy:

There are five vehicle development groups in North America. Theodore has created a centralized engineering organization charged with sharing parts and systems among them.

In January, the company named Philip Martens, a former Mazda product executive, to a new job heading product development for Ford brand products in North America. The brand was given short shrift under former CEO Jacques Nasser.

Last month, engineering executive Will Boddie took on the job of ensuring that key commodities are shared across the five groups. He has engineering signoff responsibility for every Ford, Lincoln and Mercury vehicle developed in North America.

Component sharing now is formalized. Theodore has created a commodity-sharing plan through the 2009 calendar year that specifies which components or systems will be shared and the projected savings in manpower and dollars, which Ford will not disclose.

Ford relies on the five groups to create cars and trucks for Ford, Lincoln and Mercury in North America. The five groups are:

1. Tough trucks: E series, F series, Ranger.

2. Outfitters: Escape, Explorer, Expedition, Excursion.

3. Lifestyle: Thunderbird, Mustang.

4. Family: Escort, Focus, Taurus. Crown Victoria, Windstar.

5. Lincoln Mercury: all Lincoln and Mercury vehicles.

In the past, each of the groups developed its own brakes, for example. Now, brakes are one of the commodities targeted for sharing across the groups.

Other components or systems identified for sharing are seat frames; electrical distribution systems; tires and wheels; safety systems; and heating, ventilation and air conditioning systems, said Martens, whose title is Ford vice president of Ford Blue Oval vehicle programs.

The sharing will begin within 18 to 24 months, he said.

But, Theodore said, the changes are freeing up manpower immediately. "Instead of engineers developing unique components, they will be able to develop more unique vehicles. It is freeing up resources and getting economies of scale."

Ford began briefing suppliers on the strategy last week, Theodore said.

Martens said that so far, the automaker has a completed cycle plan for six components. By mid-2003, 60 components will be detailed in the plan, he said.

"The parts go from almost the component level to the system level," Martens said. "It could be driveshafts or drivelines, cooling systems.

"We have looked at steering columns," he said. "We will reduce the number of steering columns by about 60 percent over the next four years. We will go from eight to three.

"If we can go from using one set of electrical connectors on 200,000 units to one set of connectors on 600,000 units, it is a better deal for suppliers because their material handling, their complexity and their interface with Ford are simplified," Martens said.

Targeted commodities will be shared via the new centralized engineering organization under Boddie. But Theodore said that other aspects of product development -- such as powertrain engineering -- will remain within the five groups.

"We kept unique those items that are required to deliver our brands," he said.

Ford product development has been recast several times in the past seven years. For example, in 1995, Ford abandoned regional product development in favor of a global organization.

In 2000, the company retreated and re-created regional operations. In 1999, Lincoln and Mercury joined the company's Premier Automotive Group. This year, the brands returned to the North American product group.