Automotive News - January 28, 2008 - (Page 8) 8 • JANUARY 28, 2008 advertising WANT RESULTS? NEED RESULTS? Dealers Prove Our Advertising Gets STOP BY BOOTH #3445W AT NADA (3RD FLOOR, WEST HALL) Ford wants to repair supplier relations Amy Wilson awilson@crain.com Ford trails pack Ford finished last among automakers in a 2007 Automotive News survey of suppliers conducted by J.D. Power and Associates. Ford’s scores were well below the average of all automakers in the survey’s 5 categories. 1. Openness to new ideas 2. Ease of working with automaker on innovative ideas 3. Level of trust 4. Willingness to offer financial incentives or rewards for innovation 5. Ability to carry out innovations RESULTS! • KEYES AUTO GROUP • IRA MOTOR GROUP • TOM WOOD AUTOMOTIVE • CHECKERED FLAG • AUTONATION • DIEHL MOTOR COMPANY • CORAL SPRINGS AUTOMALL • RUSTY ECK FORD • AUTOLAND • HENDRICK CARY AUTOMALL • PATRICK AUTO GROUP • HUBLER AUTOMOTIVE • PLEASANTON AUTOMALL • DEPAULA CHEVROLET • WALLACE NISSAN OF KINGSPORT • SUPERIOR CHEVROLET DETROIT — In a bid to repair fractured relationships, key Ford Motor Co. leaders will go on a listening tour of suppliers beginning early this year. Ford global product chief Derrick Kuzak and purchasing chief Tony Brown have scheduled meetings with CEOs at many of the automaker’s major parts makers. Ford CEO Alan Mulally says he may attend some meetings. The sessions are a direct response to Ford’s dismal results in several industry surveys of supplier-automaker relationships, including one conducted for Automotive News by J.D. Power and Associates. Ford finished last among automakers and scored low in every category of that survey, released in the spring of 2007. “It’s absolutely not OK,” Kuzak told Automotive News. “Your survey is very troubling. We need to correct that perception.” Last week at the Automotive News World Congress, former Boeing executive Mulally sarcastically called those last-place finishes “one of the highlights of my career.” Mulally is known for the improvements he made in Boeing’s purchasing network. “It’s something I can’t even imagine with my background,” Mulally ers achieve quality, productivity and cost-reduction goals, he said. That cooperation must get better this year: Ford is looking for as much as $1.2 billion in supplier-related material cost reductions in 2008, executives say. Better business case Besides listening, Ford leaders want to explain better to suppliers what the automaker is doing to help the bottom line for vendors. One example is rapid deployment of new technology across all Ford vehicle lines, Kuzak said. He cited Ford’s capless fuel filling system and Microsoft-developed Sync, a voiceactivated vehicle communications system. Both features will be rolled out in nearly all Ford models within two years. Ford’s strategy to build global vehicles with regional variations is another powerful tool. That will require large-volume contracts, and Ford intends to use the same supply base from region to region, Kuzak said. Said Mulally: “Just think of all the things we’re doing right now — reducing the number of platforms, getting the volume of the platforms up, reducing the order guide and complexity — all of that is absolutely the key for the suppliers to improve their performance.” c said, adding that he intends to do everything he can to move Ford up the list. All ears Ford executives are still counting on the company’s Aligned Business Framework program to help win over parts makers. Brown launched the program in September 2005 to improve collaboration by trimming the number of Ford’s suppliers and working more closely with those that remained. But more than two years into the Aligned Business Framework’s operation, much skepticism remains. That’s where the one-on-one meetings between suppliers and the Ford executives come in. “Tony and I are going to be there to listen,” Kuzak said of the planned sessions. He wants suppliers to tell Kuzak: Survey is “very troubling.” Brown: He’ll talk with suppliers. them “whether or not we’re doing well, how do you think we can do better, where are we doing OK and where do you see the improvement at Ford so we’ll know where to focus our attention. Mulally told Automotive News last week that improving collaboration is crucial because suppliers manage 60 percent of the dollar value of Ford’s vehicles. Only through a seamless partnership can Ford and its suppli- Ford cuts loss, will let share settle Amy Wilson awilson@crain.com Ford CEO Alan Mulally, shown here at the Automotive News World Congress last week: “We will stabilize at whatever, and then we will get a chance to earn our right to profitably grow again.” GET A COMPLETE MARKETING PROGRAM! Guerrilla TV Marketing Radio Print Hispanic Direct Mail Website Optimization Web Design Internet In-Store CALL, EMAIL, OR STOP BY OUR BOOTH TO RECIEVE A ONE ON ONE VIP PRESENTATION 1-888-878-ZADV zauto@zadv.com www.zadv.com or visit DETROIT — Ford Motor Co. executives say they will let the market share of their domestic brands drop rather than try to prop it up with heavy incentives. Instead of setting an arbitrary share number, it’s more important for Ford to maximize profits “so you can manage your cash and invest in new products,” CEO Alan Mulally told Automotive News last week. That comes after domestic brand market share fell farther than internal predictions in 2007. Ford’s share results: The company’s domestic brands’ share of the total light-vehicle market was 14.8 percent in 2007. Ford Motor’s domestic brands finished 2007 with 12.8 percent of the U.S. retail market, the company said last week. The retail market excludes fleet sales, which are counted in total sales and share. Ford’s retail share was 13 percent for much of the year, which is where many Ford executives were hoping to finish. Ford uses another measure in setting its share goals: its domestic brands’ retail share of the total market, which includes fleet sales. That was 10.1 percent in 2007, executives said last week when reporting fourthquarter earnings. Ford began 2007 JOE WILSSENS aiming for 10.5 to 11 percent. The company says it won’t manage operations to hit a predetermined share. “We will stabilize at whatever, and then we will get a chance to earn our right to profitably grow again,” Mulally said. He said Ford remains on track to return to profitability in North America in 2009. The automaker narrowed its loss in 2007. Ford reported a full-year net loss of $2.67 billion, an improvement from a $12.6 billion loss in 2006. In the fourth quarter, Ford posted a $620 million pretax loss from continuing operations, excluding special items. For the year, Ford reported a pretax profit from continuing operations, excluding special items, of $126 million. Ford did see revenue gains. Without special items, 2007 revenue came in at $173.9 billion, up from $160.1 billion a year ago. The gain reflected changes in exchange rates, higher net pricing and Ford’s 4th The fourth quarter was Ford Motor Co.’s worst of the year, but losses are narrowing. Full year 2007 2006 Revenue Pretax profit/(loss)* Total automotive North American auto 4th quarter $173.9 billion $126.0 million ($1.1 billion) ($3.5 billion) $160.1 billion ($3.3 billion) ($5.1 billion) ($6.0 billion) Revenue $45.5 billion Pretax profit/(loss)* ($620.0 million) Total automotive ($889.0 million) North American auto ($1.6 billion) * From continuing operations, excluding special items Source: Ford Motor $40.3 billion ($1.3 billion) ($2.3 billion) ($2.7 billion) improved product mix, the company said. Ford reported a full-year loss of $1.1 billion before taxes in its automotive operations, a gain from a pre- tax loss of $5.1 billion in 2006. In North America, Ford’s auto operations reported a loss of $3.5 billion before taxes, compared with a loss of $6.0 billion in 2006. c http://www.zadv.com http://www.zadv.com
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