Ford Sees Red

From Random Notion’s Business At The Speed Of Stupid.

You don’t last 103 years by being stupid. But you don’t lose $12.7 billion by being smart. Ford Motor Co. has done both.

Ford is hemorrhaging money. To counter it, they’re closing factories and cutting thousands of workers. If current trends continue, Ford will soon be replaced by Toyota as the second-largest automaker in the world. Perhaps they should take a lesson from their Asian rival.

Toyota Motor Corp. uses universal parts. Need a firewall, that slab of metal between the cabin and the engine? Toyota has just a handful of different firewalls, and they all have the same basic configuration. A worker familiar with one model can work on another just as easily. And a worker in the US follows the same procedures as a worker in Japan because the designs for a single model don’t vary.

Contrast this with Ford. They have dozens of firewall designs. They have dozens of models with countless options. And the design of a vehicle in the US may be significantly different from the design of the same vehicle in Europe.

The parts variances make a difference to the company’s bottom line. Ford earns about $2,400 US less on each car it sells than does Toyota or Honda.

But Ford is learning, slowly. They have plans in place to globalize their design and manufacturing. Maybe that will improve the quality too.