US:Ford to trim engineering units
Ford to trim engineering units
Product development groups' consolidation, exec shifts aim to stem woes from big vehicles.
By Bryce Hoffman / The Detroit News
Ford Motor Co. is expected to announce plans today to consolidate its North American product development operations and reduce the number of engineering groups to two from four.
The changes are expected to result in fewer engineering jobs across North America, according to people familiar with the plans.
Ford currently operates four "engineering clusters" focused on large cars, small cars, trucks and sport utility vehicles.
The reorganization will combine those operations into two product creation groups -- so-called body-on-frame and unibody vehicles.
The first group will be responsible for trucks and traditional SUVs, as well as body-on-frame sedans such as the Ford Crown Victoria and the Lincoln Town Car. The second group will handle all other cars and minivans, as well as the car-based crossover vehicles that Ford and other automakers are counting on to replace their traditional, gas-guzzling SUVs.
The unibody group will be headed by Marcos de Oliveira, currently executive director of Ford's medium and large front- and all-wheel-drive cars group. The body-on-frame group will be headed by Raj Nair, currently executive director of the automaker's North American SUV group.
Both will report to Derrick Kuzak, who became group vice president of product development for Ford's Americas division on Tuesday. Kuzak replaces Phil Martens, who resigned in October.
The consolidation is expected to create greater engineering efficiencies and lower product development costs, while accelerating the introduction of new models.
It will also allow Ford to eliminate some redundant engineering and product development positions.
Ford is under enormous pressure to cut costs as it struggles with shrinking market share and mounting financial woes. Ford's North American vehicle operations lost $1.2 billion before taxes in the third quarter and its share of the U.S. market has fallen below 18 percent.
The industrywide decline in SUV demand has hit Ford and rival General Motors Corp. particularly hard.
The company is expected to report poor October sales today, adding new urgency to the ongoing restructuring efforts initiated by Chairman and Chief Executive Officer Bill Ford Jr. earlier this year. Ford has promised to unveil a comprehensive restructuring plan in January that will include plant closings.
In recent months, three top-level engineering executives have left the company - Martens, Matt DeMars, head of North American manufacturing plants, and Will Boddie, chief engineer for North America.
Ford has struggled at times to the bring new vehicle programs in on time and at cost. It also has battled persistent quality problems. So far this year, its quality-related costs have risen by $500 million, largely due to problems with 2004 models.
"On the product-cost front, Ford remains unable to take costs out of its older generation vehicles as they get replaced, which is typically viewed as a significant opportunity at rivals such as Toyota," Banc of America Securities analyst Ron Tadross said in a report to investors earlier this month. "Ford recognized this problem in 2001 and hasn't been able to correct it in the last four years."
Because of market pressure from General Motors Corp., Ford has been unable to raise new car and truck prices to offset the higher product development costs.
To reverse losses, Ford is taking other aggressive steps to lower costs. It has eliminated more than 2,900 white-collar jobs this year and consolidated the U.S. sales and field operations of the Ford, Lincoln and Mercury brands.
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.....