Ford of Europe and the birth of the modern auto company
How Ford's competing German and British operations were brought together in 1967 by Henry Ford II
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And a frequent traveler named Henry Ford II came to Europe with two things on his mind: He wanted to watch the company's GT40 race cars perform in the 24-hour race at Le Mans on June 10-11, and he wanted to fundamentally change the way Ford operated in Europe.
The legacy of that fateful trip was a car company that became the most international in its scope and vision in the entire industry. As a result of Henry Ford II 's vision, Ford of Europe became a model for the global approaches car companies are using now. But integrating the German and British units was not easy.
At the time, Ford had a basic problem. While other companies such as Renault and Volkswagen presented a single face to European customers, Ford was very different.
John Southgate, Ford's European public affairs director in the early days who accompanied Henry Ford II on many of his journeys around the Continent, recalls:
"Germany and Britain were running completely separate companies with their own model lineups. Ford of Britain would have its own dealers in Germany if you can believe it. It was a shocking waste."
In the early 1960s, Ford of Germany had collaborated with Ford in Dearborn to develop a car to compete against the VW Beetle. The project was code-named Cardinal, after the red American songbird. The car was never produced or sold in America, but the Germans went on to manufacture it as the new Taunus 12M, the first front-wheel-drive Ford in Europe.
Patrick Hennessy, chairman of Ford of Britain, saw an early prototype in Dearborn and ordered his team to come up with a competitor. It was code-named Archbishop because the British thought Cardinal to be a reference to a church authority. The British car's production name was Cortina. Though similar in size, the two cars were different - the front-wheel-drive Taunus had a V-4 engine, while _
the Cortina had an inline four and rear-wheel drive.
Harry Calton, who was chief press officer for cars at Ford of Britain, recalls how the two Ford models competed in those days.
"They actually had a launch at Montlhery [French race track near Paris] in 1962. It was a sales meeting with Ford of Britain competing against Ford of Germany and each presenting its own wares to the national sales companies. It was Taunus vs. Cortina. The sales teams from each location were competing with the other for business."
Bruce Blythe, former Ford of Europe treasurer and strategist (1980-85): "Henry quickly realized that the key to success was not to have all your capital used up in competing against yourself."
Henry Ford II hated such waste. He told frequent confidante, Ford of Britain PR chief Walter Hayes: "What I know is that people want better products and the best way to do that is remember there is only one Ford Motor Co. and we don't have the resources to do everything twice over."
In his biography Henry, Hayes recalled the circumstances that led up to Ford's historic trip:
"For nearly 20 years, Henry had worried about Ford in Europe - not merely the progress of the business itself and its fast-developing markets, but more specifically the way it managed and exploited its growing resources ... From 1962 onward, his impatience with the way things were became increasingly evident ...
"It seems odd in retrospect how entrenched and even claustrophobic were the managements of Ford in Germany and Britain at this time. They had grown up as virtually independent fiefdoms and their appetite for sustaining the differences communicated itself throughout their separate establishments. Both companies needed better products and more of them."
So, just a few days after Dan Gurney and A. J. Foyt drove their Ford GT40 to victory at Le Mans, Ford called a meeting at the Hotel Plaza Athenee in Paris. Present were John Andrews, general manager of Ford of Britain, and Stanley Gillen, his counterpart in Germany. Both were Americans.
Walter Hayes recalled Ford's words to Andrews at the momentous meeting at the hotel: "What we need is a Ford of Europe to knock a few heads together and make things happen faster. And it's no use looking to Dearborn. They have enough on their plate. You have got to do it yourself. Make Ford of Europe."
So the process of integration began.
Said Jim Donaldson, president of Ford of Europe from 1998-99:
"We formed a giant British-German team of executives as the planning committee for Ford of Europe. We met five days a week. This committee had to pull together a blueprint for launching Ford of Europe.
"Ford of Britain and Ford of Germany were frustrated that they were tiny players in Europe. A lot of the troops latched on to Mr. Ford's vision that you could add the two shares together. If Ford applied itself it could become large two-digit share in Europe and not be a bit player.
"That appealed to the pride of individual guys who thought: 'We are all part of the same club here. What the hell, why don't we get together and become a force in Europe?'"
Said David Burgess-Wise, Ford historian:
"It would be difficult to get Britain and Germany to work together so soon after the war. It obviously was a very tough time because people were being pitchforked out of their certain career structures into the unknown.
"Some of the product development people involved in early days of Ford of Europe when all the organization was shattered and stuck together just sat in their offices at Dunton crying. Their whole careers, which had been on a certain and steady progression until now, had been thrown into the wind and blown away."
Said Bill Hayden, the tough-talking east Londoner, a young manufacturing executive at the time who would go on to run Ford's entire European manufacturing operation and later its new Jaguar unit:
"There was a mutual distrust. Only a few years before, we were fighting each other in the war. It was funny, when you got them together, all the Brits would say they fought in the Far East and the Germans on the Russian front."
Combining the organizations meant some people would lose their positions.
Jim Donaldson:
"In almost every case, two jobs became one. We had young guy called Alex Trotman - director of product planning for Ford of Britain. Klaus Amedick, was director of product planning in Germany. So when Trotman got the Ford of Europe job, Klaus became the assistant. This happened all through the organization. By definition 50 percent of executives found themselves as assistants.
"John Andrews and the board were very careful to mix skills. If you'd said 80 percent of jobs had gone to Brits or Germans or whatever, it wouldn't have worked. You had to have equitable numerical sharing. That was a very unsettling time for some people and caused a lot of anxiety."
Albert Caspers, Ford of Europe chairman (1994-96) and manager of pilot plant and technical services in the early days of Ford of Europe:
"In Germany, we were not prepared at all for this joint venture. The day after it was announced, I was made responsible for pilot plant and technical services. That means we built all the pre-production units right from prototypes up to job one. I travelled to London without knowing who I was going to meet [because Ford of Britain had no similar job at Dagenham]."
The language barrier was a big issue in deciding who got what job.
Hans-Joachim Lehmann, longtime human resources director of Ford of Germany: "In Germany, nobody ever expected to communicate totally in English. The majority of the senior management in manufacturing and product development was not bilingual. This caused a lot of confusion at the beginning and it required that those who did not speak English to learn the language.
"I had a certain experience working for an American company before. It was those fellows who had a typical German career and only worked in manufacturing who had the greatest problems. If the manager of an engine plant didn't speak English, you had to put him somewhere else and put someone in his place to talk English with others to coordinate engine production."
Bill Hayden's remembers it differently: "Every German spoke English. They had to speak English. Americans are singularly inept in languages."
But nobody ever forgot the company was based in America.
Bill Hayden: "Once Ford of Europe formed, the whole organization took another turn. In most functions there were Americans in Ford of Europe. The only one was manufacturing, which was Hans Grandi [head of manufacturing]."
Later on, Hayden would make a significant gesture by hiring a German secretary named Helga Peck at his offices in Essex, east of London.
Hans-Joachim Lehmann:
"As the situation developed you had mostly Americans in the top positions. It was easier for everyone to accept that."
Harry Calton: "Bill was the first Brit to become corporate vice president of Ford Motor Co. The fact that he led manufacturing and hired a German secretary sent a signal that Ford of Europe was here to stay. It wasn't Brits against Germans or Germans against Brits."
At the outset, people had different ideas of what kind of organization Ford of Europe would be.
Albert Caspers: "The manager of manufacturing engineering in Britain said to me, 'Albert, I've got to tell you something: Every department you have in Germany, we will have in Britain. Every section you have there, we will have in Britain. That's what Ford of Europe is all about. Everything you have there we are going to have here.' I said, 'I know the boss, and he told me something different.'"
After the traumas of the early days, those employed by Ford of Europe learned the company's culture was stronger than they had realized.
Jim Donaldson: "We've got one hell of a powerful Ford family philosophy going cementing us together and transcending the national boundaries. Many of the Brits had never been to Germany and vice versa. A lot of the top guys had met each other at cocktail parties at Dearborn. But the mid-level troops were complete strangers to each other. That's where Ford culture had paid dividends. Lo and behold, they found out that they tackled problems in the same way. Once you got over the language barrier you could say I can work with these people because they have been trained in the same way."
Ford veterans debate which vehicle was the first product of the new integrated company.
Harry Calton: "The Transit was the first one built with a common platform, though they used different engines and transmissions."
Bill Hayden: "The Transit turned out to be an absolute match winner."
Jim Donaldson: "The first common project was the Transit van, but it had been designed, packaged and conceived by Ford of Britain. You could argue the first vehicle that was done from concept to production by the European team was the Fiesta. The others were pre-existing vehicles that had been done.
"Neither Ford of Britain or Germany on their own would have been able to justify entering that [mini car] segment. Neither would have commanded a volume base that would have made economic sense. Neither company had an appropriate powertrain on the shelf. It was going to have to be engineered from scratch. When you start talking about making a dedicated transaxle - that whole avenue didn't open up until you had bigger volume base."
Integrating the organization at the operating level took many years and is still going on in some areas. During the early 1970s, both the Genk factory in Belgium and the Dagenham factory in Britain were gearing up to make the same car. The program was known internally as TC, which stood for Taunus-Cortina, the final generation for both cars. Ford had big problems with production, especially in Britain.
Albert Caspers: "The manager of the Dagenham assembly plant wrote a letter and said the car was not ready for launch and we should continue with the old car. We were developed so far in the program, that that was impossible.
"We had all made the mistake thinking that as Genk gets along with it, Dagenham will get along with it. But we underestimated the inability for that plant at that time to get these issues resolved - tooling issues, fit and finish issues, water leaks and so on. It took us a really long time. I remember that I spent months and months there.
"The cars [on the Dagenham line] were leaking like hell and I was determined not to let them go out of the factory's gate. The pool of cars grew and grew. We had to take the carpets out because the carpets were all wet. We were testing the cars for water. So we took the carpets out and hung them all on a big washing line.
"The guy in charge of quality control body and assembly came along with his boss. The car was supposed to stay in the water test booth for three minutes, and then it was OK. And of course we told the drivers as soon as the water starts to pour in, you better get out of there.
"So here comes this quality control manager to the water test booth. He sees the driver get in there and, 20 seconds later, he gets out. He yells: 'I tell you, you have to stay in there three minutes.' By that time, the water was running over the sills!"
All this was taking place when labor relations were very difficult, especially in Britain. When Caspers was young the company sent him along with wife and five children to Halewood, England, where he helped manage the plant. Caspers was one of the first Germans to hold such a job in Britain. He said: "This was biggest challenge of my life. I had to go to Halewood as an assistant plant manager. I don't think we had one day without labor relations issues. We had sectional strikes. This was before Prime Minister Margaret Thatcher came and sorted out the trade unions."
Europeans appreciated the easygoing manner of the Americans, particularly Henry Ford II, who put a very personal face on the company.
Albert Caspers: "I have been with the company thirty-eight-and-a-half years, and I almost always was happy. I felt very comfortable with the company and the people I was working for. Part of this had to do with the fact that the No. 1 guy has the name of the company. That means more than to work for Siemens where Mr. X runs the company.
"Here was Mr. Ford and I knew him and he knew me and he was always very friendly to me. The first time I met him, I was running Halewood and he came to Halewood in a Gulfstream aircraft. I was very nervous. I was 40 years old. We were the worst plant in terms of quality, labor relations and cleanliness. We were not that good a plant.
"I went to the airport and we met on the tarmac there. The aircraft was coming to a standstill. I was standing on the tarmac. The gangway came down. I had my little speech prepared. But it went all different. Mr. Ford came out there and said, 'Hi Al, how you doing?' What can you say about that? I thought it was going to be very formal."
Henry Ford II regarded Europe as his special province within the company.
Carl Levy, an American who was former managing director of Ford in Norway, Spain and France: "One of the reasons Lee Iacocca never made the grade in Henry's eyes was that Henry felt he had no global appreciation. I know Iacocca was uncomfortable in Europe. Henry said, 'I'll take care of things in Europe.' There's no question he was very comfortable and enjoyed being in Europe and being involved in Europe.
"For me, it was wonderful to have a guy like that. If I had been at Ford in the USA, I'd have been so many levels below him on organization chart I'd have never seen him. But in Europe you're meeting him at airport driving him around, dining out with dealers. That was great."
Jim Donaldson: "Ford believed everything from gasoline specs to safety standards would become standard. It was his view all this was going to grow and we just had to get our operations integrated. If product development could be integrated, the rest would follow. That was the key. He was a visionary when it came to geopolitical matters and economic unions."
Hans-Joachim Lehmann: "Ford was the first company that really tried to work together in Europe on basis as if there would be no restrictions. And it worked."
Bruce Blythe summed up his legacy: "Henry's biggest accomplishment in Europe was insisting that Ford businesses in Europe be rebuilt after the war. His second major accomplishment was that he was architect of creation of Ford of Europe as a single company."
In Europe, Ford laid the foundation for what has arguably become the most international of all car companies in management and style.
Nick Scheele, now president of Ford Motor Co., who joined Ford of Britain in 1962, recalls the creation of a new entity altered horizons of young executives like himself: "[My ambitions] were limited to Ford UK. I knew it was part of a larger enterprise but Ford was so intertwined with the British consciousness that it was viewed as a British company. In fact, we at Ford UK viewed Ford Germany as a competitor.
"But Ford of Europe was created in 1967. This was an enormously difficult thing to put together, and I think it was one of Henry II's greatest, most far-reaching visions, to create this company ahead of the Common Market. It was very farsighted."
Because of Henry Ford II's internationalist vision, his company was always blind to what nationality a person was.
Alex Trotman, former chairman of Ford and a Ford of Europe product development chief in his early career: "I'm not sure it was ever mandated, 'Thou shall be a multinational management group.' It just seemed to grow. But like most things in business, it grows by example from the top.
"And Henry II was quite a Europhile. He was a real pragmatist in dealing with people; he didn't give a hoot what nationality you were. He looked for performance.
"So it never seemed unnatural to send a South African to Spain or an American to Europe or a Norwegian to America. The red lights didn't come on, it just seemed like the natural thing to do. No one ever asked: How come an Aussie is going to the USA? How come a Brit is becoming chairman?"
Nick Scheele: "Can you imagine Toyota being run by a non-Japanese person? Can you imagine Volkswagen being run by a non-German? The answer is always no, and you can't imagine it happening, frankly. Now why can you at Ford? The answer is because we're national-blind. You're a Ford person. You're not an American or a Brit or a German. You're a Ford person, and I think that is a significant plus."
-- Jim Crate contributed
You can reach Bradford Wernle at bwernle@crain.com.
