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PUTTING FLEXIBILITY FIRST: Ford speeds changeovers

November 6, 2002

Software transforms vehicle assembly

Ford Motor Co. has launched a multibillion-dollar program intended to make its engine and transmission plants the most flexible and efficient in the auto industry. Key to the plan is software that would allow plants to switch production from one type of engine to another in hours or days rather than months. If it succeeds, Ford could save billions of dollars and be able to switch among many engine families to meet changes in demand. "This makes us much more nimble," said Dave Szczupak, Ford vice president of power train operations. "We can update our products more quickly at a relatively low investment."

Unlike traditional plants, which essentially are scrapped and rebuilt each time a new engine goes into production, Szczupak said Ford will reuse the flexible plants, generating huge savings down the road.

"The cost reductions are going to be phenomenal," said Sandy Munro of Troy-based con******t Munro & Associates Inc. "The numbers will be staggering. It's a wonderful move."

While no automaker has the level of flexibility Ford aims for, others are working on the same goal, said con******t Mike Tracy, principal of Agile Group Inc. in Howell.

"Ford is moving forward," said Jim Hall, vice president for industry analysis at Tustin, Calif., con******t AutoPacific. "It may not end up at the forefront, because that's a moving target. But Ford hasn't even pursued it for years."

The $485-million investment Ford just announced for two Canadian engine plants is the first step in the plan. Most of Ford's 30-odd engine and transmission plants around the world eventually are to switch to the flexible system, which relies on automated machining equipment that can adapt to a variety of designs.

"The initial investment is slightly higher, but long-term costs are lower in multiples," said Chris Bolen, manager of Ford's Windsor engine plant, which uses the flexible system to machine new three-valve-per-cylinder heads for Ford's 5.4-liter V8 engine.

In addition to lower investment, Ford says the system will help it meet changes in demand. "If our business was hit by a significant downsizing from V8s to V6s or V6s to (four-cylinder engines) or diesels in North America, we'll be able to react to that without years of turnaround," said Kevin Bennett, Ford director of power train manufacturing. "It's essential we be able to react to the market more rapidly than in the past."

Ford also is to install the system at its Cleveland 1 engine plant to produce a new V6 beginning in 2003. Following will be plants building V6s for Jaguar in Bridgend, Wales; a new diesel V6 in Dagenham, England, and V8s in Romeo. Ford expects each plant to be more flexible and efficient than the last.

The strategy is the precursor to flexible vehicle assembly that Ford plans to introduce at the Chicago assembly plant that will build the Ford 500 sedan and Freestyle crossover vehicle beginning late next year.

Engine plants are among the most expensive investments in the auto industry. Ford says it expects flexible manufacturing to slice its costs by hundreds of millions of dollars, replacing months and years of expensive machinery changes with software reprogramming that can be done almost overnight.

Modifications to the 5.4-liter "that would've taken months, we've done overnight with software changes," said Graham Harris, launch manager for the three-valve engine in Windsor.

The flexible line will allow the new F150 to go on sale "on time versus a delay with the traditional system," Harris said. "A change that used to take 12 months, I can do in an hour."

"It costs money to be flexible, but Ford is willing to spend it now, knowing that they'll save more later," Hall said. "It's not magic, but it's very, very good. It's a significant cost reduction that's transparent to the customer."

No other automaker has committed to making all its engine and transmission plants so flexible, Munro said.

General Motors Corp. uses flexible equipment to produce a small portion of its high-volume engines, Agile's Tracy said. The system becomes less cost-effective if a factory produces 500,000 engines or more annually, as most GM plants do, he said.

Ford's strategy calls for plant capacities of 320,000 to 350,000 units a year, Bennett said. "The very large plants we'd built in the past, with 500,000 to 800,000 engines a year, limit you," he said. "You can't build in the flexibility we need to meet the market needs of the future."

He said the company does not expect the program to have any effect on employment. "The system will be neutral. It will use more people to become more flexible, but they will be much more efficient. Uptime, output and yield will be much higher. We will have more people in direct value-added positions."

"I'm not surprised Ford is doing this," Tracy said. "I would expect other automakers to push in the same direction."

"Picture" Graham Harris, launch manager at Ford's Windsor Engine Plant, explains how a variety of engines can be manufactured on a single line. Computer software gives the automaker more flexibility.

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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.....
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