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Going global

  1. 1. September 2008 Connecting Ford People Going global
  2. 2. 0 Upfront Staying strong in a Second Quarter results challenging environment Fiesta Job 1 Industry News 0 We are now nearing the end of the third 08 Cover Story quarter and focussed on delivering our Introducing the all-new Fiesta, profit commitments in a fast-changing Ford Motor Company’s first and challenging business environment. truly global car We had an impressive first half but we are now in a different phase in our business growth and are starting 08 to see the effects of the economic uncertainties come through in new car sales. This downturn is affecting our key markets and year-over-year sales are Ford News starting to dip. Included with this issue For the forseeable future we have the considerable between pages 10 and 11 advantage of our great new products and the benefit of the efficiencies achieved through all of our hard work in the past. But we are still in a high-volume, low margin business, and as the volume disappears it is very difficult to make money 12 Interview and our break-even point is still too high. Paul Thomas discusses Until recently we have been able to rely on increasing revenue all-new Fiesta’s innovative to improve our profitability but we are now in a period which Marketing campaign will really test our leadership and teamwork. 1 Feature We need a laser focus on our cost as a way of working to offset the revenue loss resulting from our lower sales. Looking at the trends shaping the world in which we live 12 As part of our strategy for facing up to the strengthening 17 Sport challenges we are managing our expenditure to preserve 1 cash. We have set ourselves a significant cash saving objective Ford Motorsport news round-up which requires the elimination of all spending that is not 18 Feature essential to the wellbeing of our business and its future. ONE Ford helps employees It will be difficult but we will come through it and emerge deliver business goals globally stronger as a result. Thank you for your contribution, your hard work and your commitment. 1 Diversity Celebrating the success of the Henry Ford Scholarship programme John Fleming President and CEO, Ford of Europe 18 Feel the difference September 2008 Connecting Ford People
  3. 3. Upfront Q2 figures reveal mixed financial results Ford Motor Company reported a second but, more than ever, we must keep our focus on profit of $50 million, compared with a pre-tax quarter net loss of $8.7 billion, including special the essentials of our business: product, cost profit of $26 million a year ago. items (mostly reduced asset values) totalling and delivery.” • Ford earned $103 million from its investment $8bn. This compares with a net profit of $750 in Mazda in the second quarter, compared million in the second quarter of 2007. Other Q2 highlights: with $72 million a year ago. Ford of Europe’s second quarter pre-tax • Ford worldwide automotive operations • Other automotive operations, which consists profits were $582m, up from $262m a year ago. reported a pre-tax loss of $670m, compared primarily of interest and financing-related Revenue was $11.5bn, up from $9.2bn. with a pre-tax profit of $378m a year ago. costs, reported a second quarter pre-tax In total, costs decreased by about $100m. • Ford North America Automotive operations loss of $336 million. Commenting on these figures, John Fleming, reported a pre-tax loss of $1.3 billion, com- • The Financial Services sector posted a Ford of Europe’s president and CEO, said: pared with a loss of $270 million a year ago. pre-tax loss of $334 million, compared with “Our results were outstanding but we have • Ford South America posted a pre-tax a pre-tax profit of $105 million a year ago. already entered a new phase. There is no doubt profit of $388 million, up from $255 million Ford Credit reported a pre-tax loss of $294 that market pressures, together with continuing a year ago. million, compared with a profit of $112 million commodity price inflation, will constrain our • Volvo reported a pre-tax loss of $120m, a year ago. earnings growth in the second half of this year. compared with a loss of $91m a year ago. We are well positioned to weather the downturn • Ford Asia Pacific Africa reported a pre-tax Fiesta production begins Ford’s Cologne plant celebrated the official Job 1 of all-new Fiesta on August 14. At the ceremony were Dr. Jürgen Rüttgers, Minister-President of North-Rhine Westphalia, Jim Tetreault, VP, Manufacturing, Ford of Europe, and Ford of Germany chairman Bernhard Mattes. As of early 2009 the Fiesta will also be produced at Ford’s plant in Valencia, Spain. Production facilities outside of Europe will be Nanjing (China), Rayong (Thailand) and Cuautitlan (Mexico). Ford to establish NSC in Romania Ford of Europe is to establish a dedicated National Sales Company (NSC) in Romania which will take full responsibility for the marketing and service of Ford vehicles there from August 2010. Based in Bucharest, the organisation will be headed by Vladimir Vosicky, formerly managing director of Ford in the Czech Republic. Currently, Ford vehicles and parts are imported and distributed by local importer Romcar. The establishment of an NSC in Romania is the next logical step for the Company following an increase in sales in recent years and the purchase of the Craiova vehicle manufacturing plant. | September 2008
  4. 4. New Ka to star in 007 movie The Ford Ka is to star in the next James Bond movie, Quantum of Solace. The Ka, painted a unique metallic gold, is driven by the film’s beautiful but feisty leading lady, Olga Kurylenko, who plays Camille, a woman who becomes an unlikely ally for Bond. In preparation for the scene a team of three sound engineers spent a day at the acoustic laboratory at Aachen University recording engine and exhaust noises. The film opens in the UK and France on October 31, then across the rest of Europe during November. Focus named Ford Motor Company Green Car of the Year accelerates transformation The Ford Focus 1.6 TDCi Style has been driving quality. Focus topped its category Ford Motor Company is to significantly accelerate its North named Green Car of the Year in the UK’s before going on to take the overall prize America transformation plan with the addition of several What Car? Green Car Awards. The ahead of the seven other category new fuel-efficient small vehicles. It will also realign its North Awards rate vehicles not only on CO2 winners, including the Fiat 500 and American manufacturing. output but also other pollutants, running Citroen C5. costs, safety, security, practicality and In addition to bringing six small vehicles to North America from its European line-up, Ford is accelerating the introduction of fuel-efficient EcoBoost and all-new four-cylinder engines, boosting hybrid production and converting three existing truck and SUV plants for small car production, beginning this December. “We are accelerating the development of the new products customers want and value,” said Alan Mulally, president and CEO. “We sell some of the best vehicles in the world in our profitable European and Asian operations and we will bring many of them to North America on top of our already aggressive product plans.” The first EcoBoost engine applications will arrive in 2009. EcoBoost uses petrol turbocharged direct-injection technology for up to 20 % better fuel economy, up to 15 % fewer CO2 emissions and superior driving performance versus larger-displacement engines. Ford also plans to double capacity for North American four-cylinder engines to more than one million units by 2011. September 2008 |
  5. 5. Upfront Segment shares total Europe Ford market share July 2008 January–May 2008 total vehicles by country (+/– 2007) A - Austria 7.5% (+0.7%) 1. Fiat Panda 15.6% 1. Citroën C4 Picasso 17.9% B - Belgium 7.3% (+0.7%) 2. Fiat 500 (2007) 11.8% 2. Renault Megane 16.0% CH - Switzerland 5.6% (+0.7%) 10. Ford Ka 3.9% 5. Ford C-MAX 9.9% CZ - Czech Republic 7.8% (–1.4%) D - Germany 7.1% (+0.4%) DK - Denmark 7.4% (–1.8%) E - Spain 7.4% (–2.0%) 1. Peugeot 207 13.4% 1. VW Passat 19.2% F - France 5.6% (–0.1%) 2. GM Corsa 11.4% 2. Ford Mondeo 13.4% FIN - Finland 7.2% (–1.1%) 4. Ford Fiesta 9.9% 3. Skoda Octavia 13.1% GB - Great Britain 17.8% (+2.9%) 9. Ford S-MAX 4.5% GR - Greece 6.4% (–1.1%) H - Hungary 9.7% (–1.4%) I - Italy 7.4% (–0.5%) IRL - Ireland 13.1% (–1.7%) 1. GM Meriva 23.3% 1. Ford Galaxy 21.6% N - Norway 10.5% (+1.6%) 2. Renault Modus 14.9% 2. Renault Espace 17.6% NL - Netherlands 7.6% (–0.1%) 4. Ford Fusion 13.4% 3. VW Sharan 10.8% P - Portugal 6.6% (–0.8%) PL - Poland 7.0% (–0.4%) S - Sweden 7.0% (+1.0%) RUS - Russia 5.6% (–0.9%) 1. VW Golf 15.8% 1. Ford Transit 12.2% TR - Turkey 14.0% (–4.0%) 2. Ford Focus 13.4% 2. VW Transporter 10.3% 3. GM Astra 12.6% 3. Fiat Ducato 7.7% TOTAL EUROPE 8.02% (–0.5%) Mazda to lose weight Andrea Pininfarina dies VW takes wraps Mazda has announced plans to cut fuel Andrea Pininfarina, chairman and CEO of off new Golf consumption across its range by 30% by Italian car design firm Pininfarina SpA, has Volkswagen has revealed the first official 2015. This will be achieved partly through the died in a road accident. Pininfarina, 51, details of its sixth generation Golf. The Focus use of direct-injection engines and stop-start who took over as CEO in 2001, was riding competitor’s basic outline is little changed but technology but Mazda also hopes to reduce a Vespa scooter which was involved in a there are substantial revisions to the chassis the weight of each of its vehicles by at least collision with a car near the northern Italian and suspension. The company also promises 100kg by moving each model to a new city of Turin. improved quality with better soundproofing platform. The new platforms will also allow Pininfarina, 51, was the third generation and re-shaped door mirrors to reduce engine engineers to reduce suspension components to run Pininfarina SpA, founded in 1930 by his and wind noise. and use thinner materials on door panels and grandfather Battista ‘Pinin’ Farina — who The engine line-up will include 1.4-litre the bonnet, as well as using ultra-high-tensile combined his nickname and last name to petrol and diesel units, plus an economical steel for the body construction. create the company’s name and new family three-cylinder 1.2-litre and a 240PS 2.0-litre name. TFSI for the GTI. The new Golf will debut at The Ford Focus Coupé-Cabriolet is the Paris Motor Show with sales to start in the currently produced by Pininfarina at its Turin autumn. facility. The company, renowned for its expertise in producing niche vehicles, was also responsible for the Streetka. 6 | September 2008
  6. 6. Top 5 markets Top 5 markets by volume Jan–July 2008 by share Jan–July 2008 Market Volume Market Share 1. UK 16.4 % 1. UK 267 685 2. Turkey 14.6 % 2. Germany 139 520 3. Ireland 13.5 % 3. Italy 126 091 4. Hungary 14.7 % 4. Russia 116 340 5. Spain 9.6 % 5. Spain 93 328 Total industry Europe 2008 YTD Cars 10 980 911 (+242 813) Commercials 2 107 542 (+14 377) While total industry sales in the July, increasing sales by 8.8 % to shows that we have the products to main 19 European markets were more than 21,000 units, and improv- compete strongly. That strength will weaker overall in July, compared ing its share to 7.1 %. In the year further increase from October, when with a year ago, our market share through July, our German team sold our all-new Fiesta goes on sale. held steady. 139,520 vehicles, 8,230 more than With consumers focussed on holi- in the same period of 2007. Our colleagues in FCSD are also days, July is traditionally one of the A government environmental focussed on growth, profitability and weakest months for vehicle sales. incentive continued to drive sales in customer loyalty. FCSD is a wide- This year, with the added influence France and we continued to make ranging business with activities of the general economic slowdown the most of the opportunity, increas- including parts sales and supply, in some markets, total sales ing both our sales volume (to service engineering operations (pro- decreased 7.5 % to 1,406,125. 10,870) and share (to 5.6 %) in July. viding, for example, repair methods In July, we achieved sales of Year-to-date, our sales were up and training to the dealers) and vehi- 117,210 for a share of 8.4 %, the 12.8 %, at 91,795. cle personalisation. Additionally, it is same as last year. With year-to-date In Italy, we remained the leading focussed on improving customer COMMENT sales of approximately 940,630, imported brand. satisfaction. we did better than the 2.4 % overall In Russia, our sales soared In July, sales came in at 106.5 % By Ingvar Sviggum market decline. almost 26 % to 19,050. For the first versus prior year. The strongest Vice President, seven months as a whole our sales market in July was Hungary: 135 % Marketing Sales Adding sales from Turkey and were up some 20,000 units, to versus prior year. and Service Russia, which continued to be 116,340. Year-to-date sales performance strong, our July total was 141,170 Among other July increases, our across all business units (VP Pro- units. Our year-to-date sales in sales in Belgium rose by 10 % to duction Channel, Accessories, those EU21 markets increased by 3,585, and in the Czech Republic Mechanical and Collision) was approximately 7,000 units, to we climbed almost 53 % to 1,535. 104.9 % versus prior year. Vehicle 1,143,240, a solid performance. Personalisation Production Channel Our European Direct Markets Our top selling model in July was fitment achieved significant growth: were also buoyant in July, increasing Focus, selling over 42,000 units, 36 % versus prior year. more than 85 % to 8,650. That but the star performers were the The number of vehicles personal- strong performance took the total Mondeo and the new Kuga. ised through on-line fitment was for all of our 51 markets to 149,820 Mondeo continued to show its 673,311 or 54 % of all ordered in July and 1,196,240 year-to-date, appeal with sales rising 12.8 % to vehicles. an increase of over 23,400. 14,960, while the Kuga clocked up Customer Satisfaction measure- Britain remained our largest sin- 3,625 in its first month on sale. ment and improvement is a key gle market in July, boosting sales by Among our commercial vehicles, focus for FCSD. In July, the year-to- 4.3 % to 32,170. Market share was the Transit gained sales of 16,185 date CS Performance scores were: up almost 3 %, at 17.8 %. Year-to- and the Transit Connect 6,315. 70% for car service and 66% for date, Britain sold 267,685 units for While the general economic envi- commercial vehicle service. a market leading share of 16.4 %. ronment continues to be tough in Germany also moved forward in some key markets, our performance September 2008 | 7
  7. 7. Coverstory
  8. 8. World leader The all-new Fiesta is one of the most important cars in Ford Motor Company’s history. When it arrives in European showrooms in the next few weeks it will open an exciting new era in small car design, performance and functionality. But, more than that, it will mark the arrival of the first truly global Ford car When Ford started to plan its new It is also the first product of Alan small car, it carried out extensive Mulally’s One Ford vision of a single, worldwide research, both to understand global company designing and building customer requirements and to assess cars for a global customer base. the model’s suitability as a global car Fiesta is the template for the Company’s project. future generations of global models. When the report was produced, it On sale in europe from next month in made interesting reading. It revealed three- and five-door hatchback body that customer demands and expecta- styles, the model will be introduced in tions around the world were converging markets across Asia, South Africa, and thus a significant opportunity Australia and north America by 2010. existed for a global vehicle. It will be sold in a variety of regionally Moving forward, a business case was tailored models, all derived from a established to produce the vehicle but common base car. it was not one based on a global sales extending the Fiesta’s traditional figure; Ford did not set one. Instead, it strengths of style, efficiency and value, took a new approach and decided to the new model will appeal to a new create a global vehicle development generation of small car buyers through and manufacturing process that would a mix of kinetic design and latest ‘big enable it to react quickly to customer car’ technology. demand. Building on the appeal of the Verve The process would also ensure that Concept and successful production quality procedures could be replicated models, like the Mondeo and Focus, in manufacturing locations around the the Fiesta brings the modern and world, essential in delivering common, dynamic Ford of europe family look to high-level production standards. the small car segment. Its bold face The latest Fiesta is the first product includes Ford’s ‘signature’ lower grille of that new process, known as GPDS and large oval badge. Chrome and (Global Product Development System). brightwork accents, wraparound September 2008 |
  9. 9. Coverstory headlamps, pronounced wheel arch lips, a strong bodyside beltline and a sweep- ing roofline create a dynamic look. The impact continues on the inside with high-quality finishes, contemporary materials and user interfaces inspired by mobile phones. It all communicates that the new Fiesta is no ordinary small car. For the driver there is a ‘cockpit’ feel, with core controls within easy reach, including the new In-Car entertainment (ICe) system in the centre console. Steering wheel-mounted controls for key audio and vehicle systems are a ‘big car’ feature already found on Mondeo, S-MAX and Galaxy. The newest Fiesta looks sophisti- generation Fiesta. It also delivers a cation of a knee airbag in a small Ford. cated inside and out, and its driving noticeable reduction in real world fuel That is complemented by a new front quality echoes that visual perception. consumption. engineers also refined seatback design to enhance whiplash While it stands on virtually the same Ford’s electronic Stability Programme protection and a special ‘crash pad’ footprint as the previous model, the (eSP) for all-new Fiesta, which is avai- carpet underlay in the driver’s footwell, newcomer has lost weight, tipping the lable as an option across the range. which minimises loading to the lower scales approximately 40 kilogrammes Under the stylish exterior of the car leg during an impact. lighter, depending on engine choice, there is a robust body structure, crafted Among an array of other features even after adding 10 kilogrammes in from high-strength and ultra-high normally found only on big cars are safety features and sound insulation. strength steels, to protect occupants in easyFuel, the option of keyless entry Depending on the road conditions the event of a collision. and start, automatic heated screens and the mood of the driver, the model Despite these advances in strength, and cruise control. offers a combination of sporty and however, the body structure overall The powertrain story is just as strong, dynamic handling, a smooth cruising is lighter than before. This means with four 16-valve Duratec petrol and ability and effortless driving in urban advances in safety have not been two Duratorq TDCi diesel engines environments. achieved at the expense of fuel econo- available, offering a projected range- A key factor in its light, nimble my and CO2 emissions. wide CO2 average of 132 grams per handling is a new feature, the first appli- Building on the benefits of a robust kilometre (g/km), a 1.3 % improvement cation of full electric Power Assist body structure is a range of safety fea- over the previous Fiesta. Steering (ePAS) on a european Ford. tures. These include the introduction of a Impressive, but for those who want to ePAS replaces the traditional hydraulic new knee airbag into the car’s Intelligent prioritise lower emissions an eCOnetic power-assist system of the previous- Protection System (IPS), the first appli- version of the new Fiesta is available. Rebirth of an icon Fiesta is not the only Ford small car With a modern appearance based making the news; the first pictures of around Ford’s ‘kinetic design’ form the new Ka were released last month, language the new Ka is set to contin- ahead of the vehicle’s debut at the ue the considerable success of the Paris Motor Show in early October. original model. The new model makes its first appear- In total, Ka production has exceeded ance 12 years after the original Ka was 1.4 million vehicles, and the model has unveiled, but it has retained its prede- remained tremendously popular cessor’s fun personality, compact among small-car buyers, inspiring size, stylish looks and, Ford promises, fierce loyalty from its owners. its lively driving dynamics. The new model will be built in Poland. 10 | September 2008
  10. 10. 100 kilometres (47.9 mpg) and CO2 emissions of 139 g/km. Media drive The three other 16-valve Duratec pet- rol engines are a 60 PS and 82 PS 1.25- Watch out for media driving litre and a 96 PS 1.4-litre with a choice of impressions of the all-new Fiesta in the coming weeks. the Durashift 5-speed manual transmis- sion or Durashift 4-speed automatic. The five-week media drive pro- gramme for the model started at Thanks to its improved powertrain the end of last month and runs calibration and its reduced weight, the through to the end of September. new Fiesta achieves overall a 22 % Motoring and lifestyle writers and improvement in 0-62 mph acceleration broadcasters from across Europe and 14 % better in-gear acceleration. will travel to Siena, Italy, to put Like its predecessors, the appeal of the Fiesta through its paces. the new Fiesta is further enhanced by Joining them will be motoring low cost of ownership. Helping owners writers from North America, Asia-Pacific and Ford’s European to minimise running costs are improved Direct Markets. Powered by a specially-calibrated ver- fuel consumption across the range, sion of the 90 PS 1.6-litre Duratorq TDCi, lower repair costs and reduced insur- combined with coated Diesel Particulate ance premiums. Filter, the model achieves a class-lead- “All-new Fiesta proves you can make ing CO2 output of 98 grams per kilome- a small car affordable and reliable, with- tre. That is matched by impressive out compromising style, quality or fea- fuel economy, with the car covering tures,” states the model’s chief carline 100 kilometres using just 3.2 litres of engineer Joerg Beyer. “That’s the key to fuel (equivalent to 76.3 mpg) on the making all-new Fiesta truly desirable.” eC Combined Cycle. It’s a message that will spread around Compared with the previous-genera- the world. tion Fiesta 1.6-litre TDCi, Ford of europe’s most frugal car ever will use 160 litres less fuel over 20,000km, offer- ing genuine savings in daily driving. For petrol enthusiasts, a more power- ful 1.6-litre Duratec Twin Independent Variable Cam Timing (Ti-VCT) 120 PS engine is available. It accelerates the car from 0 to 100 km/h (0-62 mph) in 9.9 seconds and still returns a com- bined fuel economy of 5.9 litres per
  11. 11. interview Fiesta’s 360 degree focus The marketing campaign for the Fiesta breaks new ground for Ford of Europe. Paul Thomas, vice president, Marketing, explains how … How will the new Fiesta be marketed? es before actually buying, this is a very important media The important thing when we take the new Fiesta to market is channel within our overall Fiesta launch plans. to recognise the very diverse customer groups we have across As I’ve said, increasing sales to younger customers is one europe. We have our existing customers, male and female, of our targets – these customers are very style conscious. who span a very wide age range. In addition, with this car in We know from our market research that customers view the particular, we are targeting a younger audience, again both new Fiesta as the style leader in the small car segment. We are male and female. Different customers access different media. using a wide spread of digital media to ensure our message Younger customers, for example, are far more likely to use the reaches these potential customers since so many of them web, while existing customers may be looking at Press and TV. do not read motoring magazines or even the motoring pages So it is important in our communications that we implement a in national newspapers. We need to have a presence in the full 360 degree campaign, from TV to Press, internet and new places where these customers obtain their information, such media, direct mail, outdoor, radio and, of course, brochures. as mobile phones, the web, blogs, etc. We will have a very Paul Thomas First and foremost, we are targeting our existing customer professional and tailored presence in those media and I am believes new media base, loyal Fiesta customers across the market who’ve driven confident our message will get out to these customers, as well is vital for attracting style conscious, the current vehicle. We expect them to be really excited about as to our wider customer base. younger custom- this new car. Secondly, we are targeting customers who don’t ers. Blogs, mobile phones and buy a Ford today, who buy competitors’ products. We know in Europe is a collection of different markets and cultures, networking sites the B-Class market style is absolutely key, and with the what challenges does that bring when developing such as facebook new Fiesta we know we have the undisputed style leader a pan-European campaign? are all important channels in the segment. When we’re developing a car we look at the highest volume markets for the vehicle, so for Fiesta that is UK, Italy, Germany, You have mentioned the influence of new media, France and Spain. We have a focus on those markets, although how are you making the most of that opportunity? we work with all our markets across europe to make sure we This area of communications is moving faster than meet their requirements as best we can. While the various any other. So, to ensure we optimise our Fiesta communica- countries across europe are different, the car markets are tions we have worked closely with both our own team and our actually more similar than people might imagine. agency partners to tap into the best expertise available today. We have developed a pan-european marketing campaign The pre-sales website that went live coincident with the for Fiesta that will be consistent across europe. each of our opening of the British International Motor Show in July is a national Sales Companies has selected the mix of communi- good example of this cooperation. It is specifically targeted at cations material and media channels that will work best for people who access web-based information and media. In them. The challenge for us has been to develop the best suite addition, we launched the “Love Factory” concept in July – this of communication assets available. By developing the material too is targeted at a very different customer and transmitted centrally we minimise the cost spent developing communica- through digital communications, like the web and sites such as tions material, thereby allowing more of our available budget to YouTube. That helps to spread the word about the launch of be spent on placing customer-facing media in the markets. the new Fiesta. Of course, we have other launch communica- tions planned to support the launch in October using the more Global research reveals a trend for increasing vehicle established communication channels. customisation, how are you responding to that? To achieve our aggressive sales and profit targets on the Working with our colleagues in FCSD and Design we have new Fiesta we must retain our existing owners and conquest a series of Individual packs across all our carlines and through new customers who are currently driving competitive vehicles. this production channel we are able to offer our customers Since more and more customers are using the internet to the opportunity to customise their vehicles. In addition, we obtain product and price information about potential purchas- have recently appointed an Individual Brand Manager within 12 | September 2008
  12. 12. Marketing – this role will be key in working with the various Is the Feel the difference strategy meeting its objectives? areas of Marketing and the national Sales Companies to We started the Feel the difference strategy in europe in maximise our sales opportunities on Individual products. early 2006. It has been a focus for all that we do, not just in At the British International Motor Show in July we showed communications but in Design, Product Development, Individual versions of a number of vehicles, including the new Business Strategy and certainly in our Sales and Marketing. Fiesta. It is not just about the vehicles we have launched over the last two-and-a-half years, it includes all the products we are Another trend is for sustainable motoring. developing for introduction beyond 2008. Again, how is Ford responding to that? In addition to the style and substance of our new vehicles, Our response has been to introduce our eCOnetic range of we are also focussing on the Ford brand image in europe and vehicles. These are currently available on Focus and Mondeo, that’s a key element of our Feel the difference strategy. with Fiesta planned for introduction later this year. The Fiesta We know that two key factors influence customers to make eCOnetic produces a class leading 98 grams of CO2 per kilo- that all important first visit to the Dealership to buy a new metre, which is equivalent to 76.3 mpg (3.2 litres per 100 kms). vehicle – they are Product and Brand. Is it a product I like and That is the lowest fuel economy of any family vehicle available is it a brand I am prepared to drive? We have seen the brand on the market today. So we are responding with affordable, metrics, which measure the likeability of the Ford Brand, cost effective solutions that work for our customers. starting to improve. But we cannot rest on our laurels, so we In addition, we have embarked on specific advertising for our have embarked on a study to ascertain exactly where we want eCOnetic models. We have developed a suite of communica- to take the Ford brand in europe and, importantly, how we are tions that our markets can use to promote these vehicles going to get it there. Feel the difference is a long-term strategy because we really do have a great story to tell. that is here to stay! Interview by Peter Noble Stylish websites highlight Fiesta’s technololgy and design features and also help to influence the brand image September 2008 | 13
  13. 13. Feature Trends Global demographic trends More people – The world population is expected to grow from 6.5 billion to 9 billion by 2050. Remarkably, India and China currently account for one third of the 76 million people added to the world population each year. Aging population – Global aging is regarded as one of The world is constantly changing. Human beings the biggest challenges facing the world today. no other issue are growing in number, height and waist size. is predicted to have as profound an effect on living standards, the global economy and world order. To put this into context, We are also becoming more demanding, historically populations have a pyramid-shaped age better informed and more focussed on distribution, with more young than old. However, as a result of environmental issues. an aging population and declining fertility, the old (50+) will soon outnumber the young, causing the pyramid to invert. As life expectancy rises, it raises serious questions about In this fast moving world, it is essential for the financial viability of pensions and provision of health-care companies like Ford to keep pace with a myriad of systems for the elderly. In Japan, for instance, one in seven crimes last year was committed by someone over the age of demographic and consumer trends. These trends 65. experts blame this on a lack of financial provision and job affect every aspect of the business, from Design to opportunities for the older generation. Communications, HR to Marketing. Unlike fads, Declining fertility – In 1950, the global rate of children per woman was five, however by 2050 this is predicted to fall which come and go quickly, trends are established below replacement level at 2.05 children per woman. over time. They evolve as a result of demographic The main reasons for this are delayed marriage and parent- changes, collect momentum and continue evolving. hood, declining rates of fertility, more singles and conscious decisions by couples to have fewer or no children. This trend Ford researches these trends continuously. Here are is very pronounced in developed countries, however there some of the key findings … are some Asian, African and Middle eastern countries with spiralling birth rates and younger populations. 1 | September 2008
  14. 14. Urbanisation – For the first time in history, the majority of the today have more opportunities than ever in terms of education, world will soon no longer be rural dwellers but urban dwellers. employment and social identity. This leads to women becom- We will also see the emergence of more very large cities, ing an increasingly powerful and influential consumer group. or mega cities, with populations of ten million or more. In Asia Increasing migration and ethnic diversity – The more alone, four more mega cities are expected to bring the developed regions are expected to continue being net worldwide total to 23 by 2015. receivers of international migrants, with an average gain of Rising power of women – In the 20th century, there was about two million per year. With fewer young people, the significant progress in women’s equality and this progress immigrant population is helping countries to fill jobs and is now expected to accelerate and spread further. Women maintain the natural balance of the economy. Established consumer trends Sustainability and ethical consumption – Concerns over health, social and environmental issues are having an ever greater influence on consumer behaviour. Many of these changes are driven by the rapid introduction of government taxes and penalties, as well as by an increased media focus. A study by US market research company Harris Interactive revealed that 33 % of college students are driven towards brands that are seen as environmentally or socially responsible. even supermarkets are affected. Tesco, which produces two million tonnes of carbon a year in the UK, is planning to put labels on every one of its 70,000 products so that shoppers can compare carbon costs in the same way as comparing salt and calorie contents. September 2008 | 1
  15. 15. Feature This trend toward sustainability and ethical consumption is much more pronounced in developed countries. In less developed regions simple economics still play a far more important role. Changing physiology – People are getting taller and creating the world’s first global community, where word of heavier, with no sign of a slowdown in the rate of obesity. mouth is king and consuming information through such This is the result of a combination of natural and man-made technology is becoming a way of life. Young people also have causes. In most developed countries up to 50 % of the an increasing influence on the buying decisions of older population is now classified as overweight or clinically obese. people. Globally, more than 700 million adults are projected to be In a worldwide study, 50 % of all 8–14 year-olds said they obese by 2015, compared with 400 million in 2005. would rather throw out their TV than be without the internet. Make it mine customisation – Consumers are developing an ever stronger desire to express themselves through the products they choose. They are less likely to compromise Emerging consumer trends and no longer want what everyone else has. They want limited Changing definition of luxury – Luxury is fragmenting into editions, one-off products and bespoke items. Companies affordable and super luxury. Many products traditionally investing in personalised products are experiencing greater regarded as luxury or premium have become mainstream customer loyalty and the ability to command premium prices. and attainable. Luxury – particularly in developed markets – In the US, Arizona-based Cold Stone Creamery grew is now becoming more about life experiences, rather than five times faster than Baskin Robbins last year by inviting displays of material wealth. customers to blend their ice cream with their own choice of The super rich are finding new ways to differentiate mix-ins. themselves, with a greater propensity towards excessive Youth influence – With the growth of the internet, young displays of wealth, such as private yachts, a fleet of personal people around the world are connected like never before, jets and exclusive access to clubs and events. notably, free sharing information and setting the tone for consumers of all time is now emerging as the greatest luxury for many people. ages. eventually, global youth will share more in common with The simple life – Conversely, as life gets more hectic, each other than with older generations in their own countries. the desire to get back to simple, basic pleasures is growing. Strong economies and greater wealth has led to young People are overloaded with choice and information, leaving people (25 years-old and under) emerging as a powerful many striving for what is known as ‘simplexity’. consumer group with considerable spending power. They From a business viewpoint, many companies are now are driven by a culture of ‘instant gratification’ and are unlikely realising that too much choice can be confusing – the trick is to compromise on what they want. to deliver variety but still keep it simple for consumers. The massive growth in social networking websites is Richard Noble 16 | September 2008
  16. 16. Ford struggles in Rallye Deutschland BP Ford Abu Dhabi World Rally Team endured a difficult Record breaking Focus entry in Germany weekend in last month’s Rallye Deutschland. Mikko Hirvonen and A record 13 Focus RS World Rally cars competed in Rallye Deut- Jarmo Lehtinen were fourth in their Ford Focus RS World Rally schland. Along with the three crews from the BP Ford Abu Dhabi Car while team-mates Jari-Matti Latvala and Miikka Anttila World Rally Team and four from Stobart VK M-Sport Ford were finished ninth on this second asphalt event of the season. five crews from Holland and the ’06 specification Focus of Hirvonen ran as a high as second before a puncture dropped Norwegian Andreas Mikkelsen. him down the leaderboard. Latvala rolled his Focus on day two and also suffered puncture problems. Hirvonen – title fight could go to the wire Citroën’s Sébastien Loeb won to move into a four-point lead in BP Ford Abu Dhabi ace Mikko Hirvonen believes the race for the the Drivers’ championship. The result means Citroën has an eight World Drivers’ Championship will go right to the wire. point advantage in the Manufacturers’ series. The 27 year-old Finn is expecting Citroën’s Sébastien Loeb to pile on the pressure in the second half of the season but believes ’08 Focus RS WRC has more style and power he can stop him from clinching a fifth consecutive Drivers’ crown. The 2008 version of the record-breaking Focus RS World Rally “I think the tarmac Mediterranean events will be crucial,” Hirvo- Car made its debut in last month’s Rallye Deutschland. At the nen said. “It’s important we don’t let Sébastien, Dani Sordo and front, the car now reflects the eye-catching look of the recently- Citroën have too much success on tarmac. If I can score well on previewed Focus RS road car. Mechanical changes focus on a these events I think I’ll have an excellent chance of the title but it’s new turbocharger and crankshaft, which increase the range of going to be tough for sure.” power available. Model T and Capri star at Le Mans Two unique and specially-restored front of 81,000 spectators, it finished Ford race cars returned 49th out of 63 entrants. to the famous Le Mans 24 Hours circuit The Capri RS2600, with its V6 this summer for the 2008 Le Mans engine developing almost 400 PS, Classic. The two cars, a 1923 Model T was a major player in touring car Montier and a 1973 Ford Capri races in the early 1970s. It originally RS2600, took to the track to compete competed in the event in 1974 but under the ‘ecurie Ford France’ banner. failed to finish. It ended the Classic in The Model T, which took part in the 17th position but, crucially, won the very first Le Mans 24 Hour race in Index of Performance (similar to a 1923, is the oldest car ever to have handicap system in golf), illustrating taken part in the prestigious Le Mans the outstanding performance of its Classic. After a heroic performance in V6 engine.
  17. 17. ONE Ford ONE Ford drives Russian revolution “The success was using the CCAT process as the enabler to deliver above-typical results,” said Lisa Tresigne-King, director, Global Raw Materials and Stampings. “We took advantage of the CCAT process and its collaborative style to provide a work environment that allowed us to focus, share objectives and drive to deliver,” she said. Best of all, the targeted cost savings will be realised by year’s end. In Europe, a cross-functional group of Information Technology, Material Planning Logistics and Accounting staffers formed a rapid response team to reduce the costs for exporting vehicles into Russia. Rather than having such vehicles as the Ford Fiesta, Fusion, Focus, Mondeo and S-MAX shipped through Finland and Poland, and cleared by Russian customs in Moscow, the Ford of Europe team developed the process to clear as many as 70,000 vehicles a year through the The European cross-functional team behind the “Kaliningrad” project Russian seaport enclave of Kaliningrad, located consisted of Nik Benford, Bert Bong (left), Ford Motor Company employees are delivering between Poland and Lithuania on the Baltic Sea. Chris Caulfield, Tom Davies, Mick Flynn, Bob Gregory (right), Peter Linnemann, business results globally using the principles Using Kaliningrad as the entry to Russia Gavin Mills, Natalia Petrenko, Udo Ries, and behaviors of ONE Ford – and finding new reduces customs’ duties, taxes, truck usage and Dirk Theissen and Laura Wetzel opportunities to integrate ONE Ford into the courier charges and speeds up payments, said corporate culture. team member Nik Benford, who works in IT in In North America, members of the body Warley, England. structures product development department and The team was led by Tom Davies, supervisor, the stamping and steel purchasing section had a European Vehicle Accounting Systems and Bob target to save $115.5 million in expenses for 2008. Gregory, supervisor, Vehicle Scheduling and To help realise that goal they formed a Cross- Distribution, who worked with Dr. Bert Bong, Commodity Attack Team (CCAT) to reduce costs manager, Vehicle Logistics Europe and Mick Introduced in January, ONE Ford and streamline the process from the time a com- Flynn’s Accounting Business development team. balances “One Team, One Plan, ponent is designed to the time it’s manufactured. Set up in May of this year, the team completed One Goal” and the Ford Expected The CCAT process allowed for co-location of the research, documentation and the change by Behaviors necessary to achieve a team comprised of more than 100 members August. Benford said the project was challenging the Company’s plan. For more from Manufacturing, Purchasing, Product Devel- but rewarding. “It required people to be creative information, please visit opment, Lean Manufacturing and Cost Estimat- and work outside normal boundaries. Special www.one.ford.com. ing. Together, the team worked on 15 separate credit should go to the team who worked on it work streams to find cost savings opportunities. and stepped up to make it happen,” he said. These stories represent two of the “Communication was so much easier and The change cost approximately $100,000 to many examples of employees using issues were resolved more quickly. The real implement but will save the company approxi- ONE Ford to deliver the business benefit is that a centralised location made it mately $7 million a year. plan. To share a story, please simpler to make plans and provide the information The programme will also be expanded to han- e-mail: oneford@ford.com. to management for quick decisions,” said dle exports of the Ford Transit van, said Benford. Tam Cam, finance supervisor, North American Cost Estimating. Jessica Thiringer Ford Executive editor: Emmanuel Lubrani, elubrani@ford.com | Copy editor: Richard Noble, r noble9@ford.com | Design: Manfred Müller, mmuell86@ford.com,    Annette Vellay,  Alexander Bertrams | Production: Zetweka, Print Production Management, Cologne | Digital Reproduction: purpur, Cologne | Print: Neef Stumme, Wittingen | Published by Ford of Europe, Communications and Public Affairs 18 | September 2008
  18. 18. Diversity Supporting female engineers of the future Each year the Henry Ford Scholarship Programme gives a select group of female engineering students an invaluable insight into life at Ford. Run by Ford of Germany, in association with the University of Aachen, the scholarship programme also offers financial support and mentoring to the young women Class of 2008: The students meet the all-new Fiesta during the annual Career Day in Cologne Around 25 female Bachelors or Masters mechanical degree a closer look at the Company and get to know some of the students hold Henry Ford scholarships at any one time. To qualify different areas. This year the students spent the day in the for the programme the women need to be enrolled in a mechani- Manufacturing Business Office (MBO) and the Tool Shop. cal engineering degree at the University of Aachen, have above They also got to meet the two newest members of the Ford average academic achievements and be involved in activities family – the Fiesta and Kuga. beyond their university education. In the evening the scholarship holders were invited to a Each student receives a monthly grant. In addition to this Management Get Together hosted by Jim Tetreault, vice financial support the young women participate in a comprehen- president, Manufacturing, Ford of Europe. The evening sive programme that includes team building weekends and was an opportunity to celebrate the ongoing success of the soft and hard skill training courses such as time management, programme – five graduates now working for Ford gave a short presentations, project management and computer skills. Seven presentation – as well as to explain the programme to a group Ford engineers act as mentors to the students, supporting them of around 30 Ford managers. in a wide variety of ways. Furthermore, each student spends at “The scholarship programme is a fantastic way to bring the least one day per year shadowing a Ford engineer at work and female engineering talents of the future into Ford,” explained 12-14 per year do internships at Ford. Mechthild Cremer, part of the HR team behind the programme. Once a year the students are invited to attend a Career Day at “They get to see the inner workings of the Company, experience Ford’s Cologne facility. The day is an opportunity for them to take how we work and, most importantly, get to know the people. It is an invaluable experience for them and for us.” September 2008 | 1