LONDON - Ford's new European management team is taking drastic measures to reverse a slide in profits and market share.
The sense of urgency at Ford headquarters in Cologne is causing the company to accelerate product development processes that were neglected under Ford 2000 and have lagged behind those of European rivals.
In a series of crisis meetings in January that caused Chairman Nick Scheele to cancel his planned trip to the Detroit auto show, Ford's management team made several key decisions:
Pull the next generation Fiesta program forward by six to eight months. Job One for the all-new Fiesta is now planned for November 2001 instead of summer 2002.
Rebuild the disused west wing of Ford's Cologne assembly plant to enable Ford to prepare for the new Fiesta while continuing to build the current generation model at both Cologne and Dagenham, England.
Reduce assembly time from 22 hours on the current Fiesta to 12-14 hours on the next generation.
Cut Fiesta assembly at Dagenham from two four-day shifts to one five-day shift, laying off 1,500 workers in the process.
Cancel plans to produce a compact minivan and cabriolet on the current generation Focus platform, a decision that has angered dealers and Ford's own internal sales and marketing organizations.
Perhaps to calm those disappointed by the scuttling of the small minivan, or multi-activity vehicle (MAV), sources say a MAV will be the first model derived from the next Focus platform, possibly as early as 2003.
Scheele said more tough actions, including possible plant closures, will follow, once a task force headed by new Ford of Europe President David Thursfield reports back to him in three months.
'We need to address our profit situation in Europe,' Scheele said. 'We need to conclude quickly our long term actions.'
Ford's market share in Europe has fallen from about 11.5 percent in 1995 to 9 percent in 1999. Last year, Ford made only $28 million earnings on sales of $30 billion in Europe compared to record $6.1 billion earnings on $100 billion revenues in North America. Ford's first task will be pulling the Fiesta program forward by six to eight months. Doing that involved changing the conception of the program and its manufacturing sites (see story on Page 4). Ford will build a new body construction site within its Cologne complex and make Cologne the lead plant on Fiesta instead of Dagenham.
Accelerating the Fiesta program is an admission that Ford let its critical supermini languish far too long without a complete makeover. Originally introduced in 1989, Fiesta has looked increasingly uncompetitive against rivals such as the Volkswagen Polo, Opel/Vauxhall Corsa, Peugeot 206 and Renault Clio.
'What surprises me is that Ford could have ignored their small car for seven years,' said Charles Moss of J.D. Power-LMC, an auto industry market research firm in Oxford, England.
Thursfield is looking beyond bringing the Fiesta to market faster. Introducing a Focus-based MAV as the first vehicle on the next-generation platform would run contrary to the usual industry practice of having mainstream sedans and hatchbacks lead off volume platforms, with niche models following later. It would also appease dealers and members of Ford's own national sales organizations angered by the decision to not produce the MAV soon.
Thursfield would not comment on the MAV, but he said Ford no longer wants to do things just because competitors do them.
'Unless we have a better idea, we won't do it,' he said. 'We're going to cut our own path and be leaders instead of followers.'
The Focus MAV had been delayed at least twice. Ford conceived the vehicle originally as a five-seater, which would have gone on sale late in 1999. Then the GM Zafira arrived with seven seats, so Ford rethought the project, throwing it back into at least 2001. But Ford could not come up with an acceptable seven-seater, at least not on the current Focus platform, so the project was scrapped.
Bringing the MAV to market in early 2003 would be extremely ambitious, analysts say. But the timing could be good, coming a few months after VW's Golf-based small minivan arrives and a year before the next Zafira is due.
Thursfield is applying the same uncompromising approach to the Focus-based cabriolet. That model might have appeared late this year or early 2001 but is now scrapped, according to supplier sources.
Said Thursfield: 'Just putting a ragtop on top of a Focus is not something I want to do.'
Instead, Ford will introduce two new Focus-size cars in 2003, one a coupe and one a cabriolet, he said. These cars will be 'breathtaking,' said Thursfield, and will not necessarily be named Focus.
Thursfield also said Ford will work with Mazda and possibly Volvo on the next-generation lower-medium platform. Such a world car approach is something Ford has long promised, but never been able to deliver.
With Nick Scheele at the helm and a new team focusing specifically on a European strategy, Ford hopes to put in long-term product programs that will help it avoid the kind of scrambling it is doing now.
Scheele, who took over Ford's top European job last summer after seven years at the helm of Jaguar, arrived with a mandate to do whatever was necessary to make Ford profitable in Europe.
He began by hiring former Nissan marketing expert Earl Hesterberg to rethink Ford's sales and distribution strategy. Hesterberg is also attending to Ford's brand image in Europe, which varies widely from country to country and does not compare favorably with Volkswagen and Opel in the all-important German market.
Thursfield heads all technical operations, including purchasing, product development and manufacturing. Finance, strategy, marketing, and government and public affairs report to Scheele.
Scheele arrived in Cologne as Ford Chief Executive Jac Nasser was re-engineering the Ford 2000 globalization program initiated by his predecessor Alex Trotman.
Ford 2000 stripped away much of the product development decision-making power in Ford of Europe. Will Boddie, recently departed vice president of the Small and Medium Car Vehicle Center in Merkenich, Germany, was responsible for all Ford small and medium cars around the world. He reported directly to global product development chief Richard Parry-Jones in Detroit and had only a dotted line to James Donaldson, former Ford of Europe president.
Martin Leach, Boddie's successor, reports directly to Thursfield and has only a dotted line to Dearborn.
Ford is restructuring its operations to give its regional units - known internally as Consumer Business Units - more ability to respond to customer needs by designing the vehicle packaging for each market, said Thursfield. That means basic platforms will still be developed globally as conceived under Ford 2000, capitalizing on economies of scale resulting from Ford's size. But the 'hat,' or top of the car - the part the customer sees - will be developed within the regions.