Ford delays new Mondeo

[RichardJensen]

FoE's products are subpar, per JDP. Regardless of whatever else you may say, you are incorrect when you say that FoE 'has no problems' assembling its own designs.

 

QED. We're really and truly done here. You're wrong.

[Biker16]

What do they measure? And why are the results all over the place? How the hell does Mitsubishi do so well in Germany (VOSS) yet poorly in the UK VOSS and US IQS?

VW does well in Germany, a little worse in the UK and much worse here.

 

there are Cultural differences between the countries.

 

Americans will ding a car like the hummer for poor fuel economy Europeans will not.

 

this is the problem with comparing American to EU surveys the people are different, and the results will be different.

 

generally speaking Europeans are more forgiving when it comes to quality, they don't measure Quality in Things Gone Wrong (TGW) like JDP and Dick Jensen but in the overall experience for the owner. which makes it difficult to quantify quality in US terms.

 

Again I will agree there is disconnect between FNa and FoE in quality control and in finish manufacturing processes, but FOE quality has not caused the market share decline over the last 2 decades but the inability for FoE to get product to market fast enough, they fixed this issue and this is why FNA is basing so much on FoE platforms, because they are designed to be flexible and get products to market fast.

 

there are non simple or easy answers.

[Biker16]

FoE's products are subpar, per JDP. Regardless of whatever else you may say, you are incorrect when you say that FoE 'has no problems' assembling its own designs.

 

QED. We're really and truly done here. You're wrong.

 

If it makes you feel better about yourself, fine. but using you own absolute logic being 5% less reliable than Lexus in a Quality survey means Ford of Europe has a "problems' assembling its own designs"

 

yet nothing is said about Ford North America being 61% less reliable than Lexus in 2012 IQS.

 

indeed we are done here.

[RichardJensen]

using you own absolute logic

Worse than average. QED

[Gnostic]

If it makes you feel better about yourself, fine. but using you own absolute logic being 5% less reliable than Lexus in a Quality survey means Ford of Europe has a "problems' assembling its own designs"

 

yet nothing is said about Ford North America being 61% less reliable than Lexus in 2012 IQS.

 

indeed we are done here.

 

you cant argue with Richard, he is always right :slapfight:

[RichardJensen]

FNA doesn't enter into it. The assertion is that FoE did fine assembling its own products. They didn't. End of story.

[jpd80]

FNA doesn't enter into it. The assertion is that FoE did fine assembling its own products. They didn't. End of story.

FoE is jealously protective of its designs and steadfastly refuses to change unless ordered to do so from on high..

that culture of arrogance lends itself to systemic problems that ultimately manifest as customer dissatisfaction

 

Example,

Australia has different wiring specs due to local Australian design rules, so Mondeos ordered

from Genk go to the end of the queue, minimum four months waiting list and because FoE

wants as many 2.0 diesel engines for their own market, Australia misses out.

Sometimes I wish FoA and FAPA would just deal with FNA....

Edited July 27, 2012 by jpd80

[Biker16]

FoE is jealously protective of its designs and steadfastly refuses to change unless ordered to do so from on high..

that culture of arrogance lends itself to systemic problems that ultimately manifest as customer dissatisfaction

 

Example,

Australia has different wiring specs due to local Australian design rules, so Mondeos ordered

from Genk go to the end of the queue, minimum four months waiting list and because FoE

wants as many 2.0 diesel engines for their own market, Australia misses out.

Sometimes I wish FoA and FAPA would just deal with FNA....

 

those evil Europeans trying give the ROW the shaft once again.

 

they must be complete xenophobes, to hate you guys that way.

 

It is like they are trying to do what ever they can to kill FAPA and FOA.

 

Since the Sales units and production units are counted as one entity.

 

there are perverse incentive for doing what you said they did.

 

since FOE maintains all liability for production and capital investments, I.E. the benefits of investments are shared by all, but the risks are only borne by them.

 

the solution is to move global production away from regional sales, and seek to integrate global production so that over capacity in one part of the world can be used to supply other parts of the world.

 

in this way FOE sales would be on equal footing with FOA or FAPA when it comes to product. FOE would buy the product from Ford global Manufacturing and pay the price as FOA or FNA for that matter depending on what Ford global manufacturing wants to charge. and if FGM takes loss those losses can be accounted for a the global level and shared with the entire company. It is better than the current state where the incentives are against the sharing of capacity and towards the hoarding of resources.

 

FNA has nothing FOA can use because FNA doesn't make RHD. I'd imagine the same issue FOA is having with FOE would be repeated with FNA, except the costs would be higher because FOA alone would bear the costs for the tooling to RHD and FNA would not like to make a handful of complex vehicles for a single market.

 

SO in the Future of One Ford you would have:

 

Ford Global manufacturing

Ford Global product development

Regional sales organizations.

 

Directly reporting to Ford HQ.

[RichardJensen]

FOE maintains all liability for production and capital investments

Practically the first thing Mulally did is create global manufacturing and global PD business units. Thus the accounting system you wish for is the accounting system that is already in place.

 

However, when a plant is retooled in Europe strictly for European production, 100% of that cost is going to be assigned to the European sales & marketing unit. It isn't going to be spread around.

[jpd80]

FNA has nothing FOA can use because FNA doesn't make RHD. I'd imagine the same issue FOA is having with FOE would be repeated with FNA, except the costs would be higher because FOA alone would bear the costs for the tooling to RHD and FNA would not like to make a handful of complex vehicles for a single market.

FAPA is interesting and unique. When you look at it Ford has managed to group nearly all the RHD counties together,

all except the UK which is positioned in Europe. So from that view point, it makes sense that FoA is basically the

Centre of excellence for both FAPA and most of the RHD engineering development work.

 

So, can we please have Escape, CD4 Fusion-Taurus-Edge and next Mustang to turn into RHDs for our region...

Edited July 27, 2012 by jpd80

[RichardJensen]

Also, I should add that where volume outside a sales region (e.g. RHD Mondeos sent to Australia) are small enough, they're probably not accounted for on the manufacturing end, that is, FoA is not 'paying' Ford Manufacturing for the Mondeo, nor are they being assessed a portion of the charges associated with a new model launch. Rather all that is rolled up into the price which FoE charges FoA for the Mondeo.

 

---

 

Additionally, as a note on how Ford (probably) balances the books for Manufacturing, Product Development, IT, and the other internal business units (business units with no market presence):

 

When, say, global manufacturing books a loss for a quarter, possibly due to the expense of refitting a plant, that loss has to be assigned to one or more sales units. Dividing up the share of loss based on a mutual basis where, say, the NA business unit takes a hit for a refitted plant in Thailand that is only serving APAC, would not give a proper picture of how the sales units are faring. These losses are undoubtedly broken out on the basis of production destination.

 

Similarly, when a particular plant is quite profitable, the profits from that plant would be booked to the business unit or units using that plant on the basis of their utilization of the plant.

 

With the lowest utilization rates in the company, it should be no surprise that FoE's losses are the highest of any business unit. Not because they are liable for product development costs and refitting costs as such, but because proper bookkeeping requires a sensible allocation of losses in the internal business units.

 

It should also be noted that if FoE's sales organization had unrealistic volume projections, and those unrealistic volume projections were baked into the planning assumptions for new product, there again, the losses will return to FoE's business unit when books are balanced.

Edited July 27, 2012 by RichardJensen

[RichardJensen]

To put it simply:

 

Let's take the Fusion/Mondeo.

 

Certain costs of the Fusion & Mondeo are fractional, and are also assigned to various other platforms.

 

Certain other costs are going to be borne by both the Fusion and Mondeo and no other products (certain aspects of the engineering/design/prototype testing, etc.)

 

Still further costs will be assigned only to the Mondeo or Fusion (factory refitting, unique components, separate stamping)

 

AFAIK, this accounting system was installed by Kuzak when Mulally appointed him head of GPD.

 

Under Ford 2000, a single business unit would've been responsible for all or nearly all of these expenses. The system was, effectively, to charge the 'first unit' costs for any new component be it engine, transmission, or whatever, to a single business unit and a single product/platform. The result was horrendous costs for some projects and tiny costs for others. Because program engineers were rated on keeping costs down, this effectively stifled innovation. Nobody wanted a new transmission on their project because it would increase the cost of the project by maybe a billion dollars or more. So program engineers kept using the same old stuff.

 

Under the ad hoc groupings (EUCD, C1, B2), different business units contributed funds and staff to a 'pool' that was headed by an engineer who was under the head of one of the regional business units (FoE for EUCD, C1, Mazda for B2). The different business units could opt out of the pool at any time, and could change the design to any extent allowed by their budget. Under this scenario, business units basically paid FoE (EUCD, C1) to develop portions of the product that they later used. This may have had the effect of inflating FoE and Mazda (B2) results artificially. At least that's my understanding of how it worked. Volvo, for instance, would contribute a chunk of their PD to FoE to pay for a portion of C1 and EUCD development.

Edited July 27, 2012 by RichardJensen

[jpd80]

Also, I should add that where volume outside a sales region (e.g. RHD Mondeos sent to Australia) are small enough, they're probably not accounted for on the manufacturing end, that is, FoA is not 'paying' Ford Manufacturing for the Mondeo, nor are they being assessed a portion of the charges associated with a new model launch. Rather all that is rolled up into the price which FoE charges FoA for the Mondeo.

I get that, the pricing of the cars appears to be a lot more expensive than expected,

if our country would accept ECE wiring, we could take the UK RHD Mondeo without waiting.

 

But FoE made FoA pay for all the developmental changes needed for Australia

So now, FoA signs off on the liability for problems with the whole vehicle.

 

---

 

Additionally, as a note on how Ford (probably) balances the books for Manufacturing, Product Development, IT, and the other internal business units (business units with no market presence):

 

When, say, global manufacturing books a loss for a quarter, possibly due to the expense of refitting a plant, that loss has to be assigned to one or more sales units. Dividing up the share of loss based on a mutual basis where, say, the NA business unit takes a hit for a refitted plant in Thailand that is only serving APAC, would not give a proper picture of how the sales units are faring. These losses are undoubtedly broken out on the basis of production destination.

 

Similarly, when a particular plant is quite profitable, the profits from that plant would be booked to the business unit or units using that plant on the basis of their utilization of the plant.

Which makes complete sense form a regional accounting stance.

 

With the lowest utilization rates in the company, it should be no surprise that FoE's losses are the highest of any business unit. Not because they are liable for product development costs and refitting costs as such, but because proper bookkeeping requires a sensible allocation of losses in the internal business units.

 

It should also be noted that if FoE's sales organization had unrealistic volume projections, and those unrealistic volume projections were baked into the planning assumptions for new product, there again, the losses will return to FoE's business unit when books are balanced.

Part of the past Ford culture was to paint "blue sky" regarding sales projections to get projects past the financing department,

I wonder if Genk would fall over without the aid of export numbers, maybe this is why it's being looked at, shrinking ROW exports

as Russia, China and Asia production come on line..

Edited July 27, 2012 by jpd80

[RichardJensen]

But FoE made FoA pay for all the developmental changes needed for Australia

That's par for the course under the old accounting system.

 

I expect that expenses were accounted for differently under CD4, as Oz volumes would've been programmed in from the get go, with cost of differentiation considerations applied to the price that manufacturing would charge for an FoA spec Mondeo, based of course on volumes.

 

(also, where volumes fall short of projections, that books a loss for manufacturing which is transferred back to the sales org., not unlike the way co-ops distribute annual profits based on member purchases).

[jpd80]

That's par for the course under the old accounting system.

 

I expect that expenses were accounted for differently under CD4, as Oz volumes would've been programmed in from the get go, with cost of differentiation considerations applied to the price that manufacturing would charge for an FoA spec Mondeo, based of course on volumes.

 

(also, where volumes fall short of projections, that books a loss for manufacturing which is transferred back to the sales org., not unlike the way co-ops distribute annual profits based on member purchases).

 

OK thanks.

A friend has advised that delays could be partially due to different safety requirements between USA and Europe/ROW.

FNA only had to consider Fusion's requirements for the Americas where as FoE takes control of ROW market requirements.

CD4 Mondeo still uses parts of the previous Mondeo's floorpan and that probably causes issues with other equipment, ripple effect.

And then there's the work on diesels, whether Europe want the hybrid tech and of course, the RHD versions too..

Edited July 27, 2012 by jpd80

[RichardJensen]

Delays, at this point, are probably not due to platform engineering. Manufacturing engineering seems much more likely.

Edited July 27, 2012 by RichardJensen

[jpd80]

Delays, at this point, are probably not due to platform engineering. Manufacturing engineering seems much more likely.

The time line would suggest, field evaluation and reliability testing is beginning,

that usually takes about 12 months with no real way of shortening the process.

[Edstock]

So, Mondeo will be late to a market that sucks. Might as well take their time. The lower-priced models, like B-Max are competitive for what business is out there.

[jpd80]

So, Mondeo will be late to a market that sucks. Might as well take their time. The lower-priced models, like B-Max are competitive for what business is out there.

12 months after Fusion arrives, that's why people are annoyed.

FoE is basically stuck with selling a superseded Mondeo for 12 months.

 

It's not that bad as the current car has most of the Fusions features, if not styling upgrade.

 

Maybe a simple nose cone change of appearance keeping the car looking fresh

would let FoE slide through for 12 months and deflect some of the criticism...

[Edstock]

12 months after Fusion arrives, that's why people are annoyed.

FoE is basically stuck with selling a superseded Mondeo for 12 months.

 

Well, they weren't buying it before the EU went into the toilet, so another 12 months really won't matter. The Mondeo is a BIG EU car, and the market just isn't that big for that size of sled. Add crappy market conditions, and IMHO, it's just as well that the new model is late to market. If it were available now, the car will be "old" in the market when it recovers 12-18 months from now.