SOURCE: Autos InsiderFord to trim vehicle options
To reduce costs, automaker plans to trim buildable choices on 2007 Ford Mustang V-6.
Bryce G. Hoffman / The Detroit News
Given engine choices, interior trim level choices, color choices and other packages and options, a single Ford Motor Co. vehicle like the Mustang can literally come in thousands of configurations.
Now Ford Motor Co. -- taking a page from its Japanese competitors -- is moving to drastically reduce its vehicle configurations, a move that could save money and reduce complexity in purchasing and manufacturing.
The goal was outlined in a new internal document titled "Ford North America -- 2007 Objectives at a Glance," a copy of which was obtained by The Detroit News.
The one-page report offers a summary of each department's goals and objectives for the year in four key areas that CEO Alan Mulally has identified as the pillars of his turnaround plan: resizing the company to match the reduced demand for its vehicles, accelerating product development while reducing manufacturing complexity, securing financing and improving teamwork.
It has been nearly a century since Henry Ford told customers they could have their Model T in any color they wanted, as long as it was black. Today, Ford offers motorists a dizzying array of trim lines, options and packages on vehicles.
For example, there are currently 16,000 buildable combinations of options and color offered on the 2007 Ford Mustang V-6 deluxe model.
But more is not always better. With so many options available, dealers do not always order vehicles with the right mix for customers in their area. Experts say consumers can also get confused by so many choices.
Mulally found that out the hard way recently when he tried to buy a van for his mother's senior center.
"There's 185 different options!" he told analysts at an investment conference in New York last month. "They just want an Econoline for 15 people."
Japanese automakers like Toyota Motor Corp. and Honda Motor Co. have traditionally offered far fewer options, according to Stephanie Brinley, an analyst with AutoPacific Inc. in Southfield.
"Honda and Toyota keep it pretty simple," she said. "It's a good idea to reduce complexity, but it's also a balancing act. You still have to give consumers what they want."
That is exactly what Ford aims to do with this program, according to spokeswoman Sara Tatchio.
"We won't take things away from the customer, but we will make things easier for the dealers and for the plants," she said.
By reducing the number of different combinations workers have to contend with, Ford can also save money in its assembly plants, Tatchio said.
Ford plans to take advantage of model year changes to simplify its vehicle offerings. The soon-to-be-released 2008 Mustang V-6 deluxe will only be available in 200 buildable combinations.
"We're actually going through and looking at how we bundle and package options to make it simpler for our dealers and our customers," said Ford's Jim Cain.
Ford is not the only domestic automaker trying to keep it simple.
DaimlerChrysler AG's Chrysler Group recently announced a similar plan, promising to cut the number of possible permutations of options and colors available on the Dodge Nitro from the 167,000 offered today to just 650 next year. The company plans similar reductions for other models.
Other key goals identified in the Ford report include:
# Sourcing more non-production materials from emerging markets.
# Developing a worldwide product cycle plan that will replace existing regional product plans.
# Adopting common manufacturing processes at each Ford factory.
# Adding things like quick-lube lanes at Ford dealerships to boost customer satisfaction ratings.
# Meeting retails sales targets in the United States, Canada and Mexico.
# Retaining talent and improving morale.
# Streamlining the vehicle design process to give engineers more time to engineer.
Ford used its weekly employee Webcast Wednesday to highlight the progress it has made on this front, but some engineers say privately that they still spend more time in meetings than they do designing cars and trucks.
Tatchio acknowledged that Ford's turnaround plan is a work in progress.
"We've done a lot of work to put our goals in place," she said. "Now, we have to meet them."