LONDON - Ford's new European management team is taking drastic steps to reverse a slide in profits and market share.
In a series of crisis meetings in January that caused Ford of Europe Chairman Nick Scheele to cancel his trip to the Detroit auto show, Ford's management team decided to:
Pull the next-generation Fiesta program forward by six to eight months. Job 1 for the all-new Fiesta now is planned for November 2001 instead of summer 2002.
Rebuild the west wing of Ford's Cologne, Germany, assembly plant to enable Ford to prepare for the new Fiesta while continuing to build the current model at both Cologne and Dagenham, England.
Reduce assembly time from 22 hours on the current Fiesta to 12-14 hours on the next generation.
Cut Fiesta assembly at Dagenham from two four-day shifts to one five-day shift, laying off 1,500 workers.
Cancel plans to produce a compact minivan and cabriolet on the Focus platform, a decision that angered dealers and Ford's own internal sales and marketing organizations.
Perhaps to calm those disappointed by the scuttling of the small minivan, or multiactivity vehicle, sources say a multiactivity vehicle will be the first model derived from the next Focus platform, possibly as early as 2003.
MORE TOUGH ACTIONS
Scheele said more tough actions, including possible plant closures, will follow, after a task force headed by new Ford of Europe President David Thursfield reports back to him in three months.
'We need to address our profit situation in Europe,' Scheele said. 'We need to conclude quickly our long-term actions.'
Ford's market share in Europe has fallen from about 11.5 percent in 1995 to 9 percent in 1999. Last year, Ford made $28 million earnings on sales of $30 billion in Europe compared with record $6.1 billion earnings on $100 billion revenues in North America.
Ford's first task will be pulling the Fiesta program forward six to eight months. Ford will build a new body-construction site within its Cologne complex. Cologne will be the primary plant on Fiesta, replacing Dagenham.
Ford's acceleration of the Fiesta program is an admission that the supermini languished far too long without a makeover. Originally introduced in 1989, the Fiesta has looked increasingly uncompetitive against rivals such as the Volkswagen Polo, Opel/Vauxhall Corsa, Peugeot 206 and Renault Clio. Even though the facelifted Fiesta compares well in the area of driving dynamics, it looks dated. Sales of the redesigned Fiesta have not lived up to Ford's expectations.
With Scheele at the helm and a new team focusing on a European strategy, Ford hopes to put in long-term product programs that will help it avoid the kind of scrambling it now is doing.
Scheele, who took over Ford's top European job last summer after seven years at the helm of Jaguar, arrived with a mandate to do whatever was necessary to make Ford profitable in Europe.
He began by hiring former Nissan marketing expert Earl Hesterberg to rethink Ford's sales and distribution strategy. Hesterberg also oversees Ford's brand image in Europe.
Scheele put Thursfield in charge of all technical operations, including purchasing, product development and manufacturing. Finance, strategy, marketing, government affairs and public affairs all report to Scheele.
Ford's European product development officials also have been exploring closer ties with Mazda, in which Ford owns a controlling share.