Ford's Transformation Remains on Track

Ford's Transformation Remains on Track

VP shares company's ups and downs on road to profitability.

One of the side effects of doing things right is a seeming greater willingness to share what you've done wrong. Whether this theory was a factor in his presentation in June, Ford Motor Co.'s James Tetreault was at various moments self-deprecating, painfully blunt and ultimately pleased as the vice president of North American manufacturing spoke during the MESA International conference in Dearborn, Mich., about the transformation of Ford.

For example, he noted that the company previously lacked commitment to a strategy, illustrated by the fact that "One Ford" -- the automaker"s plan to transform its business to deliver profitable growth -- "is the first three-and-a-half year plan I've been on." That's because in the past there had always been another plan rapidly coming down the line, he explained.

And in discussing the need to change Ford's culture, Tetreault described a change required at the corporate level, where it was "hyper-competitive" rather than collaborative. "We had to figure out how we could work together," he said.

Also, until very recently Ford cars produced for Europe were entirely different than U.S. cars -- different platform, different suppliers, "different everything," he said, and expensive to maintain these separate product and supply chains.

James Tetreault: "We had to figure out how we could work together."
And even with its recent successes, Ford remains burdened by substantial debt, he noted. (On June 30, Ford announced it had reduced its debt by some $4 billion, primarily by retiring debt owed to the UAW Retiree Medical Benefits Trust ahead of schedule.)

That said, the key message delivered by Tetreault was that the resurgence of Ford Motor Co. -- whose first-half sales were up 28% over a year ago -- is no accident or by product of other automakers" woes, but a signal that the One Ford plan, now in its fourth year, is working. And about that, he was clearly pleased. (The language of the One Ford plan says in part "People working together as a lean, global enterprise for automotive leadership, as measured by: customer, employee, dealer, investor, supplier, union/council, and community satisfaction.")

Tetreault, a 20-plus-year veteran of the company, discussed how Ford had retained its financing arm "as a competitive advantage." He pointed out Ford's improving rankings and ratings in areas such as quality, customer satisfaction and supplier partnerships. He credited those successes in quality and customer satisfaction in part to the Ford Production System, under which multiple operating systems, such as launch quality, quality and safety, reside. An information technology operating system is under development, he said.

Tetreault relayed the automaker's continuing plans to aggressively build flexibility into its manufacturing assembly operations. "We are taking flexibility to a new level" that will surprise even Ford's suppliers, he said. Global platforms will drive some of that flexibility. In fact, six new vehicles for North America will derive from global car platforms. Flexibility also will be driven by an emphasis on transforming plants to quickly switch model mixes to better react to customer preferences. "We couldn't do that before," and even now Ford does it with some limitations, he said.

The vice president also emphasized Ford's drive to develop products its customers want. That means being a technology leader. Tetreault assured audience members his company would be the first to create a car that is a Wi-fi hotspot. He said Ford also remains committed to hybrid vehicles -- and has doubled hybrid production in the past year -- as well as its EcoBoost engine, which promises improved fuel economy and fewer CO2 emissions.

All in all, Ford remains committed to the strategy it embarked on more than three years ago. "We believe in this plan, our One Ford plan," he said.

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