Home      Discussion      Topics      Dictionary      Almanac
Signup       Login
The Way Forward

The Way Forward

Discussion
Ask a question about 'The Way Forward'
Start a new discussion about 'The Way Forward'
Answer questions from other users
Full Discussion Forum
 
Encyclopedia
Ford Motor Company
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...

's restructuring plan, made public in 2006, is known as The Way Forward.

Ford is attempting to reduce fixed capital costs while maintaining a special focus on cars and car-based crossover vehicles. Over time, it hopes to make more of its product line profitable instead of relying on a limited portion of the products for profit. Making good profits across the product line requires that the company reduce the costs of development and production, while introducing new products that connect with consumers.

In the latter half of 2005, Chairman Bill Ford
William Clay Ford, Jr.
William Clay "Bill" Ford Jr. , is the great-grandson of Henry Ford, and serves as the executive chairman of Ford Motor Company, Ford also served as the President, CEO, and COO until turning over those roles to former Boeing executive Alan Mulally in September 2006...

 asked newly-appointed Ford Americas Division President Mark Fields
Mark Fields (businessman)
Mark Fields is Executive Vice President, Ford Motor Company; President, The Americas and an executive of the Ford Motor Company. As head of the Americas division, Fields was tapped to develop Ford's "The Way Forward" plan, an effort to repair the ailing automaker. He reports to Alan Mulally, the...

 to develop a plan to return the company to profitability. Fields previewed the Plan, dubbed "The Way Forward", at the December 7, 2005 board meeting of the company; and it was unveiled to the public on January 23, 2006. The plan was revised on September 15, 2006 to accelerate plant closings.

"The Way Forward" includes resizing the company to match current market realities, dropping some unprofitable and inefficient models, consolidating production lines, and shutting down seven vehicle assembly plants and seven parts factories. Among these are St. Louis Assembly
St. Louis Assembly
St. Louis Assembly Plant was an automobile factory owned by Ford Motor Company in Hazelwood, Missouri. In 2006, it was idled as part of Ford's "The Way Forward" plan...

 (near St. Louis
St. Louis, Missouri
St. Louis is an independent city on the eastern border of Missouri, United States. With a population of 319,294, it was the 58th-largest U.S. city at the 2010 U.S. Census. The Greater St...

), Atlanta Assembly
Atlanta Assembly
Atlanta Assembly was an automobile factory owned by Ford Motor Company in Hapeville, Georgia. Harbour Consulting rated it as the most efficient auto plant in North America in 2006...

 (near Atlanta), Batavia Transmission
Batavia Transmission
Batavia Transmission was a transmission factory owned by Ford Motor Company in Batavia, Ohio. The plant opened on July 24, 1980, and closed in September 2008. The plant produced front-wheel drive transmissions for Ford, Mercury, and Mazda vehicles...

 (Batavia
Batavia, Ohio
Batavia is a village in and the county seat of Clermont County, Ohio, United States. The population was 1,617 at the 2000 census.-Geography:Batavia is located at ....

, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

), Windsor Casting
Windsor Casting
Windsor Casting Plant was an Iron Foundry owned by Ford Motor Company in Windsor, Ontario, Canada. The plant first opened November 9, 1934 and was located next to Ford Windsor engine plant in downtown Windsor. It was known to area residents as the "Foundry"...

 (Windsor
Windsor, Ontario
Windsor is the southernmost city in Canada and is located in Southwestern Ontario at the western end of the heavily populated Quebec City – Windsor Corridor. It is within Essex County, Ontario, although administratively separated from the county government. Separated by the Detroit River, Windsor...

, Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....

, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

), and Wixom Assembly (Wixom, Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....

). Up to 30,000 hourly and salaried jobs (28% of the total workforce) in North America over the next six years are expected to be eliminated, which is comparable to similar cutbacks previously announced at General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...

. These cutbacks are consistent with Ford's roughly 25% decline in U.S. automotive market share since the mid-late 1990s.

New cars were developed faster using the new Global Product Development System (GPDS). This brings Ford's cycle time closer to its Japanese rivals.

Ford's realignment also included the sale of its wholly owned subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...

, Hertz Rent-a-Car
The Hertz Corporation
Hertz Global Holdings Inc is an American car rental company with international locations in 145 countries worldwide.-Early years:The company was founded by Walter L. Jacobs in 1918, who started a car rental operation in Chicago with a dozen Model T Ford cars. In 1923, Jacobs sold it to John D...

 to a private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....

 group for $15 billion in cash and debt acquisition. The sale was completed on December 22, 2005. A joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...

 with Mahindra and Mahindra Limited of India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

 ended with the sale of Ford's 15 percent stake in 2005.

Ford had announced a projected return to profitability sometime after 2010, but they returned earlier than expected during the year 2009. http://www.msnbc.msn.com/id/24855246/<

Plant closings


Ford reportedly plans to close 14 manufacturing plants by 2012 including 7 that assemble cars. Short-term results (by 2008) will reduce Ford's assembly capacity by 26%.

The first closures were announced on January 23, 2006. Ford announced on April 13, 2006 that two more plants would close as well. The plan was accelerated with a mid-September announcement which accelerated the closure of the Norfolk plant and added the Essex engine and Maumee stamping plants to the list.
Date announced Plant name Location Date of closing Products Employees
January 23, 2006 St. Louis Assembly
St. Louis Assembly
St. Louis Assembly Plant was an automobile factory owned by Ford Motor Company in Hazelwood, Missouri. In 2006, it was idled as part of Ford's "The Way Forward" plan...

Hazelwood
Hazelwood, Missouri
Hazelwood is a second-ring suburb of St. Louis, located in northwestern St. Louis County, Missouri. The population was 25,703 as of the 2010 census. Hazelwood, a northern suburb of St. Louis, is located north of Lambert-St...

, Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...

2006 Ford Explorer
Ford Explorer
The Ford Explorer is a sport-utility vehicle sold in North America and built by the Ford Motor Company since 1990, as a replacement for the smaller but related Ford Bronco II. It is manufactured in Chicago, Illinois...


Lincoln Aviator
Lincoln Aviator
The Lincoln Aviator was a mid-size sport utility vehicle produced by the Ford Motor Company's Lincoln luxury division. It was introduced in 2002, and production ended in 2005. The Aviator was built exclusively at Ford's St. Louis Assembly plant in Hazelwood, Missouri...


Mercury Mountaineer
Mercury Mountaineer
Although the redesigned Explorer had already been out for two years, Mercury introduced an Explorer twin called the Mountaineer. The Mountaineer was only slightly different from the Explorer, although it did offer a few extra luxury features that the Explorer lacked, such as a standard 302 cu in ...

1,445
Atlanta Assembly
Atlanta Assembly
Atlanta Assembly was an automobile factory owned by Ford Motor Company in Hapeville, Georgia. Harbour Consulting rated it as the most efficient auto plant in North America in 2006...

Hapeville, Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...

Oct. 2006 Ford Taurus
Ford Taurus
The Ford Taurus is an automobile manufactured by the Ford Motor Company in the United States. Originally introduced in the 1986 model year, it has remained in near-continuous production for more than two decades, making it the fourth oldest nameplate that is currently sold in the North American...


Mercury Sable
Mercury Sable
The Sable was a very important sedan for both Mercury and the American auto industry.Ford had lagged in introducing mid-size front wheel drive cars to compete against General Motors' Chevrolet Citation and its best-selling Chevrolet Celebrity/Pontiac 6000/Oldsmobile Cutlass/Buick Century quartet as...

2,028
Batavia Transmission
Batavia Transmission
Batavia Transmission was a transmission factory owned by Ford Motor Company in Batavia, Ohio. The plant opened on July 24, 1980, and closed in September 2008. The plant produced front-wheel drive transmissions for Ford, Mercury, and Mazda vehicles...

Batavia
Batavia, Ohio
Batavia is a village in and the county seat of Clermont County, Ohio, United States. The population was 1,617 at the 2000 census.-Geography:Batavia is located at ....

, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

2008 transmissions 1,745
Windsor Casting
Windsor Casting
Windsor Casting Plant was an Iron Foundry owned by Ford Motor Company in Windsor, Ontario, Canada. The plant first opened November 9, 1934 and was located next to Ford Windsor engine plant in downtown Windsor. It was known to area residents as the "Foundry"...

Windsor
Windsor, Ontario
Windsor is the southernmost city in Canada and is located in Southwestern Ontario at the western end of the heavily populated Quebec City – Windsor Corridor. It is within Essex County, Ontario, although administratively separated from the county government. Separated by the Detroit River, Windsor...

, Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....

, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

2008 Engine blocks, parts 684
Wixom Assembly Wixom, Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....

June 2007 Lincoln Town Car
Lincoln Town Car
The Lincoln Town Car is a full-size luxury sedan that was sold by the upscale Lincoln division of Ford Motor Company; it was produced from 1981 to the 2011 model years...


Lincoln LS
Lincoln LS
The Lincoln LS is a mid-size, rear wheel drive sedan from Lincoln. For its production run from 1999 until 2006, it was based on the Ford DEW98 platform, which was shared with the Jaguar S-Type and Ford Thunderbird...


Ford GT
Ford GT
The Ford GT is a mid-engine two-seater sports car. Ford Motor Company produced the Ford GT for the 2005 to 2006 model years. The designers drew inspiration from Ford's GT40 race cars of the 1960s.- Development :...

1,567
April 13, 2006 |Twin Cities Assembly
Twin Cities Assembly Plant
Ford Motor Company's Twin Cities Assembly Plant is located next to the Mississippi River in the Highland Park neighborhood of St. Paul, Minnesota, United States. It is the oldest Ford plant still in operation, having been first built in 1924. Today, the plant manufactures the Ford Ranger pickup...

St. Paul, Minnesota
Minnesota
Minnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...

, USA
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

2011 Ford Ranger
Ford Ranger
The Ford Ranger is a pickup truck produced by the Ford Motor Company. The "Ranger" name had previously been used for a premium styling package on the F-Series full-sized pickup trucks since 1965. The name was moved to this line of North American compact trucks for the 1983 model year.In North...


Mazda B-Series
Mazda B-Series
The Mazda B-Series is a pickup truck, first manufactured in 1961 by Mazda Motor Corporation. From the first B-Series, Mazda has used the engine displacement to determine the name. Thus, the B1500 had a 1.5 L engine and the B2600 had a 2.6 L engine...

1,885
Norfolk Assembly
Norfolk Assembly
Norfolk Assembly was a manufacturing plant operated by Ford beginning April 20, 1925 and most recently producing the Ford F150 truck. The plant was located on the Elizabeth River, near downtown Norfolk, Virginia, and produced its final truck just after 7AM, the morning of Thursday, June 28,...

Norfolk
Norfolk, Virginia
Norfolk is an independent city in the Commonwealth of Virginia in the United States. With a population of 242,803 as of the 2010 Census, it is Virginia's second-largest city behind neighboring Virginia Beach....

, Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...

, USA
2007 Ford F-Series
Ford F-Series
The F-Series is a series of full-size pickup trucks from Ford Motor Company which has been sold continuously for over six decades. The most popular variant of the F-Series is the F-150...

2,433
September 14, 2006 Essex Engine Windsor, Ontario
Windsor, Ontario
Windsor is the southernmost city in Canada and is located in Southwestern Ontario at the western end of the heavily populated Quebec City – Windsor Corridor. It is within Essex County, Ontario, although administratively separated from the county government. Separated by the Detroit River, Windsor...

, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

2008 Ford Triton engine
Ford Essex V6 engine
Ford Essex V6 engine
Ford Motor Company has produced two different V6 piston engines which have been commonly referred to as Essex:* Ford Essex V6 engine - A 60° V6, 2.5/3.0 L* Ford Essex V6 engine - A 90° V6, 3.8-4.2 L...

Maumee Stamping Maumee, Ohio
Maumee, Ohio
Maumee is a city in Lucas County, Ohio, United States. It is a suburb of Toledo along the Maumee River. The population was 14,286 at the 2010 census. Maumee was also declared an All-America City by the National Civic League in June 2006.-Geography:...

2008 body panels
Total11,787

Product replacements


The following products are currently assembled at the Wixom (Michigan) Assembly plant, which is closing. They will be replaced by future vehicles. In June 2006, Ford announced that it will not move production to St. Thomas
St. Thomas, Ontario
St. Thomas is a city in southern , Ontario, Canada. It is the seat for Elgin County and gained its city charter on March 4, 1881.-History:...

, Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....

, Canada (where its body-on-frame
Body-on-frame
Body-on-frame is an automobile construction method. Mounting a separate body to a rigid frame that supports the drivetrain was the original method of building automobiles, and its use continues to this day. The original frames were made of wood , but steel ladder frames became common in the 1930s...

 platform-mates Ford Crown Victoria and Mercury Grand Marquis are produced), likely meaning that Town Car production would end permanently. Ford eventually changed its mind, and the company reversed this decision, announcing in September that it would move the Town Car after all. As of 2011, production of the Town Car has been cancelled, with the MZT crossover intended as its replacement for livery fleets.

The Way Backward


This was a stinging attack by Japanese firms, Toyota and Honda
Honda
is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles.Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than...

, on Ford and its proposed restructure. The comments were dismissed by Ford.
Date announced Product End of production Replacement
January 23, 2006 Ford GT
Ford GT
The Ford GT is a mid-engine two-seater sports car. Ford Motor Company produced the Ford GT for the 2005 to 2006 model years. The designers drew inspiration from Ford's GT40 race cars of the 1960s.- Development :...

September 21, 2006 Shelby Cobra GT500
Lincoln LS
Lincoln LS
The Lincoln LS is a mid-size, rear wheel drive sedan from Lincoln. For its production run from 1999 until 2006, it was based on the Ford DEW98 platform, which was shared with the Jaguar S-Type and Ford Thunderbird...

April 2006 Lincoln MKZ
Lincoln MKZ
The Lincoln MKZ, initially named the Lincoln Zephyr, is a mid-size, entry-level luxury car from the Lincoln division of the Ford Motor Company. Lincoln revived the Zephyr name in the fall of 2005 as a platform-mate for the Ford Fusion and Mercury Milan; the vehicles were based on the CD3 platform,...


Lincoln MKS
Lincoln MKS
The Lincoln MKS is a full-size luxury sedan from the Lincoln division of the Ford Motor Company. The MKS first appeared in concept form at the North American International Auto Show in January 2006 with the production version, a 2009 model, appearing later at the Los Angeles International Auto...

Lincoln Town Car
Lincoln Town Car
The Lincoln Town Car is a full-size luxury sedan that was sold by the upscale Lincoln division of Ford Motor Company; it was produced from 1981 to the 2011 model years...

June 2007 Assembly to be moved

Staff reductions


Up to 30,000 factory jobs would be eliminated with the downsizing envisioned in The Way Forward. The company is also eliminating 4,000 salaried, contract, and agency jobs during the first quarter of 2006, and the company is eliminating 6 or 7 corporate officer positions out of 53 immediately.

Ford is reportedly offering severance package
Severance package
A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:* An additional payment based on months of service...

s of up to $100,000 for workers who are willing to give up all future benefits except their pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...

. The company will also pay up to $15,000 in tuition
Tuition
Tuition payments, known primarily as tuition in American English and as tuition fees in British English, Canadian English, Australian English, New Zealand English and Indian English, refers to a fee charged for educational instruction during higher education.Tuition payments are charged by...

 for workers returning to school. Workers over 55 can reportedly get a $35,000 bonus to retire early, provided they have 30 years of service with the company, and those with 28 years can get leave and 85% pay for two years.

Divestment


Ford's plan called for divesting, selling, and closing some businesses in order to raise cash.
  • Jaguar Cars and Land Rover
    Land Rover
    Land Rover is a British car manufacturer with its headquarters in Gaydon, Warwickshire, United Kingdom which specialises in four-wheel-drive vehicles. It is owned by the Indian company Tata Motors, forming part of their Jaguar Land Rover group...

     — On 2 June 2008, Ford sold both of its British operations to Tata Motors
    Tata Motors
    Tata Motors Limited is an Indian multinational automotive corporation headquartered in Mumbai, India. Part of the Tata Group, it was formerly known as TELCO...

     of India for a cost of £1.7 billion.
  • Aston Martin
    Aston Martin
    Aston Martin Lagonda Limited is a British manufacturer of luxury sports cars, based in Gaydon, Warwickshire. The company name is derived from the name of one of the company's founders, Lionel Martin, and from the Aston Hill speed hillclimb near Aston Clinton in Buckinghamshire...

     — On 12 March 2007, a British consortium led by Dave Richards of Prodrive purchased the iconic automaker for £479 million.
  • Automobile Protection Corporation — Extended warranty company APCO will also be sold
  • Mazda
    Mazda
    is a Japanese automotive manufacturer based in Fuchū, Aki District, Hiroshima Prefecture, Japan.In 2007, Mazda produced almost 1.3 million vehicles for global sales...

    , On November 18, 2008, Ford announced that it would be selling a 20% stake in Mazda, bringing its stake to 13.4%, and surrendering control of the company.
  • Mercury (automobile)
    Mercury (automobile)
    Mercury was an automobile marque of the Ford Motor Company launched in 1938 by Edsel Ford, son of Henry Ford, to market entry-level luxury cars slotted between Ford-branded regular models and Lincoln-branded luxury vehicles, similar to General Motors' Buick brand, and Chrysler's namesake brand...

    , On June 2, 2010, Ford officially announced the closure of Mercury by the end of Q4 of 2010.

New products


Ford, reportedly will also invest in new products and productions sites to better compete in the marketplace. The company plans to build a new low-cost manufacturing site in North America, possibly in Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

.

Product plans reportedly call for more crossover SUV
Crossover SUV
A crossover SUV is a vehicle built on a car platform and combining, in highly variable degrees, features of a sport utility vehicle with features from a passenger vehicle, especially those of a station wagon or hatchback.Using the unibody construction typical of passenger vehicles, the crossover...

s, compact car
Compact car
A compact car , or small family car , is a classification of cars which are larger than a supermini but smaller than or equal to a mid-size car...

s, and hybrid vehicle
Hybrid vehicle
A hybrid vehicle is a vehicle that uses two or more distinct power sources to move the vehicle. The term most commonly refers to hybrid electric vehicles , which combine an internal combustion engine and one or more electric motors.-Power:...

s. The company announced the Ford Five Hundred
Ford Five Hundred
The Ford Five Hundred is a full-size sedan that was produced by the Ford Motor Company during the 2005 to 2007 model years in North America. In North America, the name evoked the classic Fairlane 500 and Galaxie 500 models of the 1950s through 1970s.-Overview:The Five Hundred was introduced at the...

/Mercury Montego
Mercury Montego
The Mercury Montego was a mid-size vehicle in the Mercury line of Ford Motor Company from 1968 to 1976. The namplate first appeared in 1967 in Canada as part of the Mercury-derived Meteor line. After 1976, the basic design of the Montego was updated and the nameplate disappeared as the Cougar...

 and Ford Edge
Ford Edge
The Ford Edge is a mid-size crossover SUV manufactured by Ford, based on the Ford CD3 platform shared with previous generation Mazda6 and marketed in rebadged form as the Lincoln MKX...

/Lincoln MKX
Lincoln MKX
The Lincoln MKX is a mid-size luxury crossover from Ford's Lincoln division and a de facto successor to the Lincoln Aviator luxury SUV. It debuted as a 2007 model in December 2006 as a production version of the Lincoln Aviator Concept shown at the 2004 North American International Auto Show...

 hybrids as part of the plan.

Ford also intends to revive the Lincoln
Lincoln (automobile)
Lincoln is an American luxury vehicle brand of the Ford Motor Company. Lincoln vehicles are sold mostly in North America.-History:The company was founded in August 1915 by Henry M. Leland, one of the founders of Cadillac . During World War I, he left Cadillac which was sold to General Motors...

brand.