"We don't have to spend twice on all the widgets as we used to," said David Thursfield, Ford's president of international operations and global purchasing, who is championing such efforts at Ford of Europe. "Quite often we had very little roll-through capability apart from powertrains and transmissions. The rest was all-new. It doesn't have to be like that.
"The fact that we've laid the foundation stone for second-cycle reusability of at least 50 percent, it dramatically changes our business equation in the out years."
The company also is planning to cut costs by consolidating platforms and sharing more parts among many vehicles. For example, Ford plans to take about 10 nameplates for Ford, Lincoln and Mercury in North America off the Mazda6 platform. The first of these vehicles will be the Ford Futura mid-sized sedan in 2005.
In the meantime, the company continues to look for smaller, more immediate cost savings. CFO Allan Gilmour detailed a sampling last week, including cutting down the number of dealer ride-and-drive events and event sponsorships, as well as pooling purchases of common industrial supplies such as gloves, coveralls and brooms.
Ford may well have to rely on such cost cutting to meet 2003 earnings targets of about $1.26 billion this year. Scheele acknowledged last week that the company may not achieve its goal of holding wholesale prices, net of incentives, steady this year compared with last year because of rising incentives.
Said Scheele: "If our pricing assumptions do not hold, we're quite certain our accelerated cost actions will cover any shortfall."