How long will it be until you're taking full advantage of integrating operations within Land Rover's new group in Premier Automotive Group?My guess is that you'll start to see the real benefits of the back-office synergies over the next 12 to 24 months. My experience with this stuff is that usually the low-hanging fruit, the easy stuff, generates a lot of benefit for you. The next phase is prioritizing that which is left into the ones that will give you the next major benefit. You probably get the most dollar savings out of those kinds of activities. What's left over after that you might not get before three, four, five or six years - and the truth is that's not where the real money is. Most of where you're capable of saving money is short term and medium term.
Land Rover has put a lot of money into Land Rover Centres. Is its integration with other Premier Automotive Group brands going to dilute those investments?At the heart of it, there may not be as radical a difference between a Land Rover Centre and a PAG center as there might at first appear. Land Rover Centres have always been Land Rover exclusive outlets. Now, the Land Rover processes will exist in the context of other franchises and very often within a physical structure that includes other PAG franchises. Our desire is to see that the things that we've learned over the past seven or eight years while building Land Rover Centres continue within the PAG context, and we get the benefits that come with combining back-office operations, where the customer is not touching the operation.
Does Land Rover have more financial freedom under the Ford umbrella than it did under previous ownership?Certainly there's an enormous resource there. They've invested $200 million already in the Solihull (England) factory, and we've only been with them now for 14 months. So there certainly are deep pockets and a willingness to invest. On the other hand, this still has to be run as a business. And I don't think there's anybody within Ford Motor Co. or anywhere else under the Ford brand portfolio where anybody's giving us a pass not to be a viable enterprise. Yes, there's resource - but we're expected to deliver a result.
Ford recently has made major cutbacks in personnel. Do you see that eventually affecting Land Rover?We've actually been in growth mode since Ford acquired us. There's a huge aspiration for growth in Land Rover and a huge expectation for growth. Our volume target is up something in the order of 70 percent for next year. You can't do that without growing the organization to support it.
When Ford acquired Land Rover, Land Rover in America was not a fat organization. In fact, if anything, we were perhaps a little bit over-lean because we were involved in the integration process with BMW. So a lot of cuts had been made in the organization in anticipation of savings on efficiencies out of that integration - so we've actually had to be in rebuilding mode for the last year. Freelander really is just the first step. Beyond that will come other new products. The organization that Land Rover is part of will have to grow to accommodate the new products.