Ford Motor Co. avoided bankruptcy and survived the Great Recession in part because former CEO Alan Mulally’s One Ford plan reduced costs and used common global parts. But the company’s current leadership says that’s no longer enough.
Ford is moving beyond what Mulally and his successor, Mark Fields, did as the automaker looks to slash $25.5 billion in costs over the next five years. While One Ford helped whittle the automaker’s global architectures from 30 to nine, Ford is now reducing that number even more, transitioning to just five modular vehicle platforms in the coming years.
“This is not saying One Ford was wrong. This is building on the strategy of One Ford and evolving from it,” Hau Thai-Tang, Ford’s head of product development and purchasing, said Wednesday during a presentation to the 2018 J.P. Morgan Auto Conference in New York.
While One Ford helped the company achieve global scale, Thai-Tang said it didn’t get the desired scale on the regional or local level. Moving to five platforms will help save costs and boost the efficiency of Ford’s supply base, he said. Thai-Tang said up to 70 percent of a vehicle’s value can be managed through a modular approach.
Moving forward, each of the automaker’s vehicles will be on one of five platforms: rear-wheel-drive/all-wheel-drive body-on-frame; front-wheel-drive/awd unibody; commercial van unibody; rwd/awd unibody; and a unibody platform for battery-electric vehicles.
Ford seeks to save about $7 billion in engineering and product-development costs while reducing by 20 percent the amount of time it takes to bring a vehicle from the sketch board to the showroom.
The automaker believes it can make its engineering 20 to 40 percent more efficient through these new processes.
Ford is shifting its product portfolio away from most cars and more toward light trucks as it tries to produce the industry’s freshest North American lineup by 2020.
The automaker has said it will phase out traditional sedans in North America. Thai-Tang said they will be replaced by new vehicles with different body styles in the same entry-level price range.
Ford will focus on “bold, emotive designs” that fit its strengths in the pickup, commercial van and utility segments, Thai-Tang said.
He added: “We’ll reinvest and allocate capital in those areas.”