Ford To Bring More Car Designs From Europe

Posted by: David Kiley on July 21, 2008

Ford this Thursday is expected to announce it will fast-track at least one of its European passenger cars for U.S. production. The announcement will come amidst Ford’s second quarter earnings report and an update on its restructuring plan.

The two cars that CEO Alan Mulally has been pushing Ford to build in the U.S. are the Ford Mondeo and European Ford Focus. I have also heard that some in Ford have been trying to make a business case to sell the tiny Ka car in the U.S.

It is vital that Ford build these cars in North America if they are to sell them, rather than trying to export them from Europe. The weak dollar makes such a move a loser. Ford would lose money on each Mondeo and Focus it would import from Europe today. Those cars are not “federalized” for U.S. emissions and safety standards anyway.

For years, Ford’s management has fended off calls to unify its product offerings in Europe and the U.S. The European Mondeo, for example, is a huge critical and sales success, and is widely viewed as a more attractive vehicle than the U.S. Fusion. Too, the auto press has long praised the European Focus, while Ford has chosen to sell a different Focus in the U.S.

When Ford launched the Focus in the U.S. and Europe in the late 1990s, it was the same car on both continents. The manufacturing launch, though, was chaotic and the U.S. Focus was beset with numerous recalls. Once Ford got the bugs out, the reputation of the car was damaged. The automaker has not remade the car from top to bottom since its launch, choosing instead to change the design while keeping much of the mechanicals beneath. The current U.S. Focus is selling well as the demand for fuel efficient cars has spiked. But the car is not critically praised much for design and performance. The European Focus, meantime, has been substantially upgraded twice.

Ford managers have pushed back against Mulally’s directive to “make it happen,” referring to his desire to unify Ford’s global product line and make some of the European product in the U.S. These are the same strategic planners in some case, though, who made Ford so top-heavy on trucks and SUVs and short of competitive passenger car products.

This is where the choice of Mulally should really pay off for Ford. An outsider who came to Ford in 2006 from Boeing Co., Mulally has a retort for long-time Ford managers who fight him on a decision that makes so much sense…”How’s that workin’ out for ya so far?” Not too well. Ford managers have painful memories of the company trying to sell the Ford Contour/original Mondeo globally. And who could forget the raging success of the Merkur Scorpio in the U.S. But those people are responsible for a alot of Ford’s problems today. It’s time to try it Mulally’s way.

But just because those Euro models didn’t work, it doesn’t mean that today’s Focus and Mondeo can’t be globalized with success. The designs are much better than those previous attempts, and the world is different when it comes to design. Last time I checked, Toyota was doing pretty well selling a global Camry and Corolla design.

Given the long-term prospects or oil prices, Ford would do well to have a full line of passenger cars that includes the Fiesta, Focus, Fusion, Mondeo, Taurus…Ka? What remains to be seen in Mulally’s announcement is whether or not the Mondeo will replace the Fusion, or be added to the lineup. There has already been a move to unify the design of the Fusion and Mondeo for each car’s next generation. Ford also has an updated design of the Taurus due next year. The update, as seen in spy shots and in a slide presented to dealers a few months ago, looks akin to the Mondeo.

The next generation Focus, too, was to be brought together. So, Mulally will be outlining whether or not the end result of this will be adding models, or just accelerating the merging of these model programs. Either way, Ford’s car lineup is going to get a needed boost.

Reader Comments

Dearborn Observer

July 21, 2008 12:11 PM

It can be argued that perhaps Ford should simply roll-up most of its Product Development Center in Dearborn in favor of focusing its development and design work in Europe! After all, the team over there has clearly delivered on producing hit vehicles, especially cars. Ford's North America team is too truck-focused, and its car design/engineering team is mostly notable only for retro-mobiles like the Mustang and Ford GT. It's one widely praised and moderately successful car line-up (Fusion/Milan/MKZ) was designed by a Brit (Phil Simmons - he also did the new Mondeo) and was engineered on a Mazda platform.

James

July 21, 2008 2:27 PM

It would be a big surprise if the Mondeo makes it over here, considering the presence of the Fusion plus circulating spyshots of a refreshed Fusion PLUS all the talk of (pardon the pun) a fused next-gen Mondeo/Fusion.

A Fusion Hybrid is also coming --how hybrid-ready is the Mondeo? Probably not very, but Ford could offset it by making a diesel engine available. Too bad diesel fuel is more expensive (despite its better MPG how are you going to seel that?) plus the engine is not yet clean enough for California.

I would love for the new Ka to come here. Years ago, I wrote (yes, wrote) to Jacques Nasser about the possibility of bringing the Ka over. He wrote (yes, wrote) a nice reply, but the answer to date has been pretty obvious.

If the internal resistance Mulally is facing is true, clearly he's got to clean house. He probably doesn't (or wouldn't) want to do it in the midst of all the restructuring, but he's got to do it for the good of the company.

beeb

July 21, 2008 4:36 PM

The problem with the Contour is that they DIDN'T bring over the design of the Mondeo. The seemingly subtle design changes made for the American version of the Mondeo ruined the thing..and I will never understand the motivation behind those changes. They revised the roofline, with an accompanying loss of headroom, and lost all the nice proportions present on the European version.

BMW has had no problem bringing their cars over here virtually unchanged and there is no reason Ford can't do the same. The fact of the matter is that the European arm of Ford understands better how to make desirable cars, whether for Europe or the U.S. As nice as the American Fusion is it pales next to the Mondeo. Ford must rid itself of the marketing mentality that designs need to have an American stamp on them. That is what is killing them--along with questionable reliability in all their vehicles and disappointing driveability in their U.S. models.

R Jones

July 22, 2008 6:25 AM

Mulally should point out to the naysayers that Merkur was an attempt to bring a brand to the U.S. The cars were neither Ford nor Mercury and suffered an identity crisis from day one. I rented a Contour with less than 20 miles on it. I had not gotten out of the airport when a bump in the road caused the windshield to crack. At that point Ford couldn't have given me one, much less sold it.

44 mpg by 2010

July 22, 2008 8:07 AM

I agree that the Mondeo, Focus, and Fiesta are worth the effort to make them available in the US from a fuel economy point of view ... PROVIDING FORD US CAN RETAIN the 43/51.4 to 55/65.7 mpg(US/Imperial) combined cycle currently available in Europe for these specific vehicles!

Although the Ka is small, it has only mediocre fuel economy at 40/47.9 mpg(US/Imperial) combined cycle. If low fuel consumption is the "name of the game" ... I am not certain the 3 year old Ka is worth the effort. Why would anyone want the Ka when even the mid size Mondeo provides superior fuel economy (about 10% better). And the Fiesta and Focus are even better! In fact the Focus, at up to 55/65.7 mpg(US/Imperial) combined cycle, can be almost 37% better than the Ka.

Manfred Stapff

July 22, 2008 1:26 PM

Not unifying European and US programs will push Ford more and more into competitive disadvantage, not only because its US portfolio is so heavily weighted on gas guzzling trucks.
They also missed the opportunity to offer the Escape Hybrid to the fuel economy conscious European market segment. Ford could also set a clear sign with the Edge in the growing European cross-over segment. Sometimes it seams to me as if they had an intra-company exclusivity arrangement in place: "US developers keep hands off European opportunities" and vice versa.

Chuck E

July 22, 2008 11:46 PM

DO IT! DO IT! DO IT! That Mondeo is smoking, even the wagon is hot. Why do we get stuck with the Fusion and Focus? It wouldn'g hurt my ford stocks either.

Srinidhi Prasad

July 23, 2008 1:00 AM

Ford has been one of the leading Auto Giant globally having designed luxury Cars worldwide. This move will definitely boost their business.

pes

July 23, 2008 12:10 PM

Ford's (as well as GM's)european designs have been incredibly successful.Looks,performance,quality. It almost seems that Detroit thought of US consumers as idiots since the US cars did not have all of the tech savvy of the euro products. Then look at the Focus debacle, leaving the old product here while Europe got the new model or the Mondeo which was a mutation of the great european model. Detroit better start giving the product quality a euro twist.

Like It

July 24, 2008 11:46 PM

I rented a Mondeo in Great Britain last year, and based on that experience, I would consider buying one here in the states. And I haven't bought a Ford in over 30 years.

Myron D. Stokes

July 25, 2008 12:09 AM

Colleagues:
The writer's comments are timely, accurate, direct and conveys an understanding of long standing Ford internal politics.

Alan Mullaly has just been introduced to the realities of the "Middle Kingdom"; that is to say, upper to lower level mid- management whose motto is "We've seen CEO/Chairmen come, and we've seen them go, and we, the people who really run things at Ford Motor Company, are still here." These are the attitudes that have faced non-Ford family CEOs, inclusive of Don Peterson, "Red" Poling, Sir Alex Trotman, Sir Nicholas Scheele, Jac Nasser, and now, Alan Mullaly (who they dismiss as an "outsider"), since the demise of Henry Ford II who reigned over this kingdom with an iron fist. But he also empowered them in a way wherein they could make life very difficult for executives who were showing just a little to much independence in thought and action.

The "fiefdoms" within Ford, identified metaphorically by the "chimneys" rising above each fiefdom locale, emerged as all but autonomous profit centers ruled over by the mid-level management equivalent of a feudal Lord. His only mission: protect and push his people to higher grade levels, even if it was at the expense of fellow personnel.

Besides having to fend of the pressures and attacks on their position associated with economic war waged against this country's industrial base and its core components by European and Asian industry counterparts, Ford has had to deal with internal difficulties that in a military setting would be considered insubordination, if not treason.

The Ford Explorer/Firestone tire debacle on Nasser's watch is a significant example of what lengths the middle kingdom will go when it doesn't get its way. Indeed, it can be said that the bulk of the internal documents leaked to media, government and litigant's attorneys came from Ford employees who obviously didn't care if the company was destroyed reputationally and physically by virtue of their actions.

As regards matters of the moment, especially the encouraging news that Ford has seen fit to rejuvenate its dealer product line up with excellent fuel efficient and wonderfully styled European models (don't get me wrong, the aesthetics of stateside product is nothing to dismiss as missing the mark of elegance and excitement)that are sure to create another level of consumer product magnetism. Better yet, they announced intentions to re-tool several plants, some of them idle, to produce them in the US.

Brilliant, we say, and the market already responded positively, which brings us to David Kiley's observations; why would Ford management so seriously retreat from this remarkable strategy, as evidenced by this past Thursday's arguably tepid expansion on the Euro-initiative?

Mullaly is no doubt stunned by the mid-management pushback: Strong enough that he was forced to modify his announcement, while he simultaneously is beset by the growing realization that the "Middle Kingdom" just checked him with a body block.

The "Barbarians" he must now realize, are not just "at the gate" but already within.

So, now, there is the question of leadership and the extent to which Mr. Mullaly is willing to apply the power vested in him as CEO of Ford Motor Company.

Without doubt, the European solution is one of elegance, effectiveness and efficiency, especially if he brings over a mix of Mondeos and Ka' while his plants undergo re-tooling. The latter being a relatively simple one considering that Ford, through a collaboration of former COO Jim Padilla, Ford of Europe's John Fleming and manufacturing process engineer Abid Ghuman, developed cell-based Simplified Flexible Manufacturing. This process, first used on 2004 F-150, is a marvel of simplicity and permits tooling changeovers in a matter of hours, not weeks.

It goes within saying that Ford has a solution, the processes to implement the solution and extraordinary motivation to do so.

In this, I have no doubt that Alan Mullaly has the intestinal fortitude to act decisively: That is, push back with equal force at those attempting to derail this positive initiative. It is wise, really, to remember that AIRBUS made the mistake of underestimating him and his team at Boeing Commercial Airplanes relative to the 787 Dreamliner... and the wound was almost fatal.
http://commons.wikimedia.org/wiki/Image:GM_ANALYSIS070608.pdf

Leo M. Gates

July 25, 2008 11:33 AM

I own a 1998 Ford Contour, 2.0 Zetec VCT, 5 spd manual, I've had it for 10 years and it is great. If I had to make it perfect, I'd give it a hatchback with a windshield wiper, diesel as an alternative fuel choice. Hey, isn't that the Mondeo? If Ford is going to market a "world car", why would they give it different model name in another continent? At any rate, my car feels more German than American. It will soon be time to start looking, though I am in no hurry. Maybe a Mondeo will become a reality in 2010.

BeGreen

July 27, 2008 4:30 PM

America needs to stay FOCUSED, AWARE and EDUCATED.

Focus:
History reminds us that every time oil prices peak and the North American market/consumers start to discuss alternative energy sources, the oil exporting countries start to trim down their prices. History also tells us that the oil exporting nations have been very successful in the past and in fact, we have lost our enthusiasm and dropped many of our alternative energy initiatives after oil prices are reduced.

WE need to stay focused this time.

1) Al Gore and his energy initiative is on course.
2) T. Boone Pickens and his wind power initiative is on course.
3) The BG Automotive Group mass production electric vehicle program is on
course along with renewable solar energy charging option.
4) Richard Branson from the UK is on course w/his environmental programs..
5) The Gas Reduction Act of 2008 might not be the most environmentally sound
solution, but yet it shows that Congress has finally realized that we have an
energy crisis (again), and a real threat to our national security.

The continued dependence on foreign oil is a threat to our long term democratic values. We must become an energy independent nation, and with this, some sacrifices will have to be made by the American consumer.

Be aware!!
We are exporting approximately USD $700 Billion dollars per year of U.S. currency. The majority of this money is being transferred to the Trillion dollar “sovereign wealth funds”. This is USD $700 Billion not being spent on America’s educational system, health care and security.

The “sovereign wealth funds” are directly buying major interests (large blocks of stock) in U.S. companies, including most of the major banks. Also, billions of dollars of “sovereign wealth fund” money is being invested in our hedge funds, private equity firms, and the investment banking industry. A few of these firms are directly and indirectly investing large sums of money into our “gas combustion” automobile industry. Do we want our auto industry in the direct or indirect control of the firms that are supplying us oil? This is an interesting topic for an investigative reporter.

There are automotive consulting companies in Michigan (heart of our auto industry), lobbying States and our Federal Government, NOT to subsidize the Electric Vehicle industry. The latter seems to be contradictory to what the American public would like to see from our automobile industry. After the billions (excess of $20 billion) the automotive companies have lost in the past 6 months producing gas combustion vehicles, you would think they too would change course. Changing course is not adding 2-4 miles per gallon w/Hybrids. Drastic measures in our auto industry must take place and NOW!

Do not let the temporary reduction in oil prices push us off course….AGAIN.

Educated:
Read, Read- Stay on top of the issues. Let’s not be fooled again.

STAY FOCUSED, AWARE and EDUCATED!

Kirk Rocheford

July 28, 2008 12:08 PM

They better do something!

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