Ford To Trim Vehicle Offers
May 10, 2007
To reduce costs, the Ford Motor Co. plans to trim buildable choices on the 2007 Mustang. Given engine choices, color choices, interior trim level choices and other packages and options, a Ford vehicle like the Mustang can accurately come in thousands of configurations.
The competition is getting tougher and tougher each day and Ford takes it seriously. For this reason, the Detroit automaker is exerting noteworthy effort to drastically lessen its product line configurations. This move could reduce complexities in both the manufacturing and purchasing processes. It could also save a significant sum.
The goal was outlined in a new internal document titled "Ford North America, 2007 Objectives at a Glance.” The one-page report sets forth an outline of each department's goals and objectives for the year in four key areas. The areas were identified by CEO Alan Mulally as the pillars of his turnaround plan. They include resizing the company to blend the reduced demand for its vehicles, securing financing, improving product development while decreasing manufacturing complexity and improving camaraderie.
It has been quite a century since Henry Ford, founder of the ailing auto manufacturing company, told enthusiasts they could have their Model T in any color they wanted, as long as it was black. Nowadays, the automaker offers motorists a dizzying repertoire of trim lines, packages, and options on product lines. At present, there are currently 16,000 buildable combinations of options and color offered on the 2007 Ford Mustang V-6 deluxe model.
But according to experts more is not always better. Fulfilling is the buzzword, they said. BMW accessories, for example, are just enough to trigger fulfillment. With so many options available, dealers do not always order product lines with the accurate mix for purchasers in their area. Experts added consumers can also get confused by so many choices.
Mulally found that out recently when he tried to purchase 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."
The Toyota Motor Corp., Honda Motor Co. and other Japanese automakers, 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."
But according to spokeswoman Sara Tatchio that is exactly what Ford aims to do with this program. "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.”
The automaker intends 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 used its weekly employee Webcast Wednesday to stress the progress of its turnaround plan, but some engineers said privately that they still spend more time in meetings than they do designing cars and trucks. On the other hand, 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."
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