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Derrick Kuzak (Ford FORD)
Derrick Kuzak (Ford FORD)

One on One

Ford's global focus Add to ...

Ford is on a roll.

Sales are up 30 per cent this year in Canada and even more in the United States.

Ford stock has gone from about $2 (U.S.) a share to $12 in a year.

There are smiles all around at the Detroit auto maker that didn't go bankrupt and get bailed out by governments.

Alan Mulally, the CEO recruited from Boeing, gets all the credit (plus an enormous pay package: $18-million last year), but behind him is a key group of five or six people who share in all the big decisions.

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First among them is Derrick Kuzak, who oversees all Ford's global product development. He is the person who has to make "One Ford" a reality all over the world.

Vaughan: Does "One Ford" mean one kind of car that's the same around the world? Does it mean that the Focus in Canada will be the same as the Focus in South Korea?

Kuzak: There will be an extremely high level of commonality.

For the Focus, it will be in the neighbourhood of 80 per cent. But there will also be elements of the car that will be tuned to the particular market - some colours, some materials.

But for the most part the only thing that is different is what's driven by different emissions regulations and safety regulations.

The reason for that is that in most segments customers have converged. They want the same thing out of their vehicles. They want great features, they want quietness, they want great fuel efficiency and they want great design.

It's our customers who have driven us to the point where we think market-tuned global vehicles will work.

What kind of cost savings does this mean for Ford?

Let me give you a couple of examples of that rather than talk about specific numbers.

Today we have a Focus in North America that sells about 220,000 units a year. At the end of this year, we will have a global Focus.

The North American four-door becomes part of a family of about 850,000 to 900,000 four-door and five-doors globally. And the platform - that you can think of as the go-kart of the vehicle - will be used in over two million vehicles.

That's big savings on the material costs. We can share the investment not on 200,000, but on upwards of two million. So it really is what's allowing us to have small cars in North America profitably, which we have never achieved in the past.

From a product-planning perspective, how does Ford meet the difficult upcoming fuel economy regulations that will be fully in place by 2016? Do you have to sell nothing but small cars or all hybrids or what?

Absolutely not.

In North America, to meet the fuel economy requirements, we always start with the customer needs. You have to remember that the way the fuel economy regulations are devised now, it's not by fleet, it's targeted by each vehicle segment.

That's really important to us because it allows us to be a full line manufacturer. We have small, medium and large cars, utilities and trucks. If we achieve fuel economy leadership in each of those segments, we meet the fuel economy requirements.

Is the turnaround in Ford locked in?

Absolutely not.

We have a plan and that plan goes through the next five years and that plan is built around continuous improvement in everything that we do. Relentless, rigorous improvement on everything in the plan.

And we have to deliver on that plan to achieve the sustained profitability that we require in this business.

Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 2 p.m. on CTV.

mvaughan@globeandmail.com

 

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