Wednesday, July 12, 2006

Bold Moves Way Forward

Ford South America has become the company's biggest success stories. It accounted for nearly $1 of every $5 Ford earned in last year. "What we can learn from South America is a willingness to start with a clean sheet of paper," Chairman and Chief Executive Bill Ford said.

First, Ford overhauled its manufacturing facilities by closing inefficient plants. It took a risk by opening a new, low-cost factory. Second, Ford began making cars that were aligned with consumer tastes. Ford polled young people at nightclubs and churches in low-income communities. Its market-research pointed toward designing a small SUV to compete with Nissan Pathfinders and Toyota RAV4s. In 2003, Ford introduced the Ecosport. It is so popular that it has captured 80% of the SUV market in Brazil. The Ecosport is designed to fit customers in emerging markets. It is smaller and designed to cope with bad road conditions.

Michael Robinet, a vice president at CSM Worldwide, a Michigan-based auto-industry research firm said "Bland or non-aggressive design is not a recipe for long-term growth and stability of any company." Ford is closing 14 North American plants and cutting up to 34,000 jobs during the next six years. It is doing this in an attempt to reinvent itself. Industry insiders say Ford must show the same boldness in North America if it really wants to move way forward.

Samor, Geraldo. “In Brazil, Ford Has Discovered ‘Way Forward’.” Wall Street Journal. Page B1. Monday, July 10, 2006.

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