A Finding-Religion Moment
When rising gas prices and crumbling economic conditions in 2007 and 2008 prompted consumers to flee SUVs and seek out fuel misers such as the Ford Focus, Tetreault admitted "it exposed a weakness not only for Ford but for other major automakers."
That weakness was the auto industry's traditional manufacturing model: each assembly plant dedicated to a single vehicle platform.
At Ford, under that strategy, it took up to four years to develop a new vehicle, at a cost of about $1 billion. Ramping up and retooling for a new model required at least six months of downtime.
"We could not quickly, efficiently and nimbly respond to the consumers' quickly changing wants and needs," Tetreault said. " ... We were significantly limited by our inflexibility. We were limited by mass production."
That became painfully obvious when production of the compact Focus in 2008 "went from 180,000 a year to 300,000 a year overnight," he added.
"I mean, in a very short period of time when gasoline went from $2.80 to $3.80, we increased Focus sales by over 60% in a couple of months," Tetreault said.
"We didn't have the vehicles. We weren't ready for it."
That was a finding-religion moment for Ford, though, and one that has been driving Ford's push toward what Tetreault called "full flexibility."
"And that means in the future we'll be able to build vehicles with an infinitely variable mix, with very little or no downtime -- and my mantra is none," he said. "I tell all of our directors and plant managers, 'We have to be able to introduce a car without shutting a plant down.'"
Ford is making great strides toward full flexibility, Tetreault told the Best Plants audience, with its conversion of three former truck and SUV plants into small-car facilities that are "completely flexible."
Ford's assembly plant in Wayne, Mich., for example, once made blot-out-the-sun Ford Expedition and Lincoln Navigator SUVs -- as many as 350,000 a year in their heyday. This year, Ford expects to produce about 40,000.
After a $550 million overhaul in 2009, the 55-year-old Michigan Assembly Plant now makes gasoline-powered and all-electric versions of the Ford Focus, and will begin producing the C-MAX hybrid and C-MAX Energi plug-in hybrid this year.
"We're going to build all those vehicles on the same assembly line," Tetreault said.
Ford's assembly facility in Cuautitlan, Mexico, has gone through a similar transformation. The former truck plant now makes the subcompact Fiesta, and is designed to change models on a dime.
"The secret to that plant is it's also capable of producing compact cars and, if we needed to, intermediate-size cars without shutting down and without retooling," Tetreault said.
