Word: forde
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Cost cutting, though, was only one part of the recovery plan. Under Petersen, the company has developed a worldwide strategy for prospering in an increasingly competitive business. Ford has always had a major presence overseas, especially in Europe, but its operations around the world often duplicated one another's efforts. A European subsidiary, for example, would make cars for its market, while Detroit was building similar vehicles for the U.S. There was remarkably little coordination, specialization or division of labor, even though domestic and foreign vehicles were becoming more alike...
...Ford has started to operate like a fully integrated global company. It has turned its technical facilities in five countries into what Petersen calls "centers of excellence." Each center is assigned projects that will benefit the company as a whole. Some of the facilities may work on a particular engine, while others may design and engineer common platforms -- the suspension and other undercarriage components -- for an entire family of autos. Ford of Europe, which has its headquarters in Brentwood, England, has been delegated to develop platforms for all three of Ford's compacts: the Tempo, the Topaz and the European...
...savviest parts of Ford's strategy is its alliance with Mazda. Instead of continuing to engineer its own small cars, Ford decided to rely on an acknowledged expert. Each partner brings strengths to the collaboration: in general Ford provides the styling while Mazda supplies engineering and manufacturing expertise. The first Mazda-engineered Ford, an $8,500 compact called the Mercury Tracer, appeared in March 1987 and was followed two months later by the two-door Festiva subcompact ($5,900). Last year cars that Mazda helped develop accounted for 3% of Ford's sales, and that percentage will rise substantially with...
Another factor in Ford's surge is a new spirit of cooperation between labor and management. Last September the United Auto Workers union, which represents 104,000 Ford employees, agreed to accept a contract that calls for a moderate average wage increase of 3% this year. The pact includes concessions by both sides. The union said it would help Petersen achieve his goal of creating more Japanese-style teamwork. In exchange, Ford agreed to a provision that bars the company from laying off workers in all but the sharpest of economic downturns. Says Ford Executive Vice President Philip Benton...
...protect itself from the vicissitudes of a fickle business, Ford has been moving to diversify. Since 1985, it has bought an 80% stake in Hertz (for $1.3 billion); California's First Nationwide Bank ($493 million), the fourth largest U.S. thrift institution; and BDM International ($425 million), a military research firm that will supplement Ford's longtime aerospace expertise. Ford is rumored to be interested in using its $10 billion cash hoard to go after a much larger acquisition, perhaps a company the size of Boeing, Lockheed or Singer...