Ford plans to combine operations worldwide

April 22, 1994|By Los Angeles Times

DEARBORN, Mich. -- Criticized for spending too much and taking too long to develop new vehicles, Ford Motor Co. said yesterday that it will improve efficiency by merging its North American and European operations.

The reorganization -- the most wide-ranging at Ford in more than 25 years -- could produce savings of as much as $3 billion a year by decade's end, when the changes will first touch car and truck production, the company said.

"We have these two big elephants called Europe and North America," Chairman and Chief Executive Alexander Trotman said a news conference at the company's worldwide headquarters here. Each unit develops, designs and markets its own vehicles, often resulting in duplicative efforts.

"Our concern is to have a harmonious dance between these two," Mr. Trotman said.

Ford's goal is to reduce the cost of product development, design, parts purchasing and related activities. That could mean some reductions in the company's 322,000-member work force, but executives said they hope the shrinkage can be handled through attrition.

Though Ford is the most efficient U.S. automaker and has one of the strongest balance sheets in the industry, its profit margins are slimmer than those of some competitors.

The reason: Ford's development costs are much higher. Mr. Harbour estimates that Ford spent $800 per vehicle on $l development costs last year -- 60 percent more than Chrysler.

The restructuring establishes Ford Automotive Operations to oversee operations in Europe and North America. Its president, Edward E. Hagenlocker, will be in charge of five vehicle programs, each with worldwide responsibility for the design, develop ment and engineering of vehicles as signed to it.

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