NEW YORK - Together but separate.
That balancing act, the credo of Ford Motor Co. as it attempts to manage a growing stable of nameplates, may have gotten a little tougher last week with the automaker's announcement that it will put the U.S. headquarters of its four luxury brands under one roof.
The four - Volvo, Jaguar, Aston Martin and Lincoln Mercury - will move to a new complex in Irvine, Calif., starting in the third quarter of 2001. The move will give Premier Automotive Group, Ford's conceptual framework for the luxury brands, a bricks-and-mortar presence for the first time.
Volvo, Jaguar and Aston Martin will transfer from New Jersey; Lincoln Mercury moved to California in 1998 but will vacate the building it now occupies. The new complex will be in a campus setting adjacent to Mazda North American Operations, another Ford affiliate.
The balancing act for Wolfgang Reitzle, PAG's group vice president, is this: how to share costs, purchasing clout, behind-the-scenes processes, maybe someday product - and now a headquarters building - yet maintain distinctive brands at the same time.
'A lot of what you do to be successful in the luxury segment has nothing to do with the brand itself,' Reitzle said in a telephone interview after the Feb. 24 announcement. 'We hope that one plus one plus one plus one will equal five or six, not only four.'
Why sharing is good
He cited several reasons for the move:
Housing the different brands together allows executives to bounce ideas off each other more often. They can make their marketing campaigns more effective and avoid stepping on each other's turf.
'I'm a great believer in bringing people close together, in the same building, to enhance informal communications, as well as the formal meeting structure, Reitzle said. 'You can better approach the market when all four brands are orchestrated.'
Moving Jaguar and Volvo from the East Coast to the West Coast should put those brands in closer touch with customers outside their traditional East Coast markets - which is necessary for them to hit bigger volume targets.
Basing the whole enterprise in California is supposed to make all of the group's brands faster at discovering new trends in the U.S. market because California is where trends start, from environmental consciousness to coffee bars to the dot-com economy.
For similar reasons, Ford moved Lincoln Mercury to California in 1998.
Significantly, Reitzle said all of the group brands will have advanced design studios at the headquarters.
'It will be very interesting to have the marketing and sales department in the same building as the advanced styling studio,' Reitzle said. 'That (interaction) will cycle back much faster to Sweden for Volvo, and to the U.K. for Jaguar, those trends and that vision.'
Brands remain separate
Reitzle is chairman of both Jaguar and Volvo Cars. But having a single North American headquarters does not mean there will be a single North American executive in charge of all four brands, he said.
Vic Doolan, the former president and CEO of BMW of North America Inc., remains as sales and marketing coordinator for the four brands, but each will be managed separately, Reitzle stressed.
Reitzle said if the North American experiment is a success, the group might consider establishing a similar regional headquarters in other parts of the world and/or a worldwide headquarters in Europe.
Volvo will move executive management, sales, marketing, communications and corporate service functions from Rockleigh, N.J. Jobs for about half of its 300 headquarters employees stay in New Jersey.
Jaguar North America and Aston Martin Lagonda Ltd. share headquarters in Mahwah, N.J. They will move about 60 jobs in executive management, franchise development, marketing and communications to the West Coast. About 200 positions remain in New Jersey.
'We are not abandoning what we have built on the East Coast,' Reitzle said. 'This is all about our future.'