By now, Ford Motor Co. executives surely have grown accustomed to being showered with applause when they remind audiences that the automaker weathered the Great Recession without panhandling for taxpayer help.
That clearly was the case Tuesday afternoon at IndustryWeek's Best Plants Conference when Jim Tetreault -- Ford's head of North American manufacturing -- noted that Ford (IW 500: 6) has "significantly improved the fundamentals of our business without taking any government bailout assistance."
Tetreault (pronounced "Tay-tro") paused for a moment, and sure enough, the several hundred manufacturing managers in attendance at the Indianapolis Convention Center burst into applause.
It wasn't that Tetreault was soliciting a response -- he just knew it was coming.
But if you look past Ford's near-iconic status as the only member of the Detroit Three that didn't need Uncle Sam to hold its hand during the auto industry's darkest days, Ford still has a pretty darn good story to tell.
It starts with Ford's leadership team: CEO Alan Mulally, the architect of the One Ford turnaround plan and the poster child of the auto industry's comeback; Executive Chairman William Clay Ford Jr. -- whom Tetreault, quite earnestly, called "the finest many I've ever known"; and Tetreault himself, a Detroit native and 35-year auto-industry veteran whose breadth of experience enables him to seamlessly shift gears from a 20,000-foot view of Ford's operations to the plant floor.
And the plant floor -- thanks to the One Ford plan -- is where the magic is happening at Ford.
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.
The Michigan Assembly Plant boasts technology that "represents a significant step forward in our flexible manufacturing strategy," Tetreault said.
The plant uses cutting-edge simulation software to build new vehicles in a virtual factory -- enabling Ford engineers, operators and product-development personnel "to evaluate the tooling and the product interfaces with the tooling well-before costly installations that have to be revised when we're launching."
"We generally get it pretty right when we install the tools," Tetreault said. "This level of collaboration not only allows us to reduce mistakes, but it also significantly improves our quality and it enables a speed of execution that we can launch a new vehicle now from the first Job 1 to full production in about 40 days.
"The industry standard is probably closer to 180 now."
Still, the most dramatic shifts toward flexible manufacturing have taken place in Ford's body shops, where the automaker is "headed toward what I like to call body-construction nirvana."
At least 80% of the robotic equipment in Ford's newly flexible body shops can be programmed to produce vehicles of any size and any configuration, Tetreault noted.
"This is significant because body construction has long been a limiting factor in the ability to add or change products in our facilities," he said.
" ... In plants where we did have some flexibility, where we produce a sedan and SUV, for example, if we were building 80% SUVs and 20% sedans, and sales and marketing said, 'Well, that's really nice guys, but we need 80% sedans and 20% SUVs,' it took us months to change all the tooling required to do that.
It was not flexible at all."
With reprogrammable tooling, though, "we can put any body side down that line -- it doesn't matter what the vehicle looks like, doesn't matter what the size of it is."
"Vehicle to vehicle, we can change what we're building," Tetreault said. "We've never been able to do that before."
Similar transformations have been taking place at most of Ford's other North American assembly plants as well, and Tetreault noted that nearly half of Ford's transmission and engine plants around the world "are capable of building several architectures at the same time."
At Ford's transmission plant in Van Dyke, Mich., for example, the automaker produces six-speed automatic transmissions and continuously variable electric-hybrid transmissions on the same line.
Ford previously bought the hybrid transmissions from a supplier in Japan, Tetreault noted. But given the dramatic swings in hybrid-vehicle sales based on the rise and fall of gasoline prices, "we decided that we should innovate this and do it ourselves."
"Now as the manufacturing head, I don't care what sales does -- I can build whatever they want," Tetreault said. "If they want 35% hybrids, we can do that. If they want 2% hybrids, we can do that. And we can substitute the other transmissions that they do want.
"We've never been able to do that before either."