derrick kuzak
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Automotive News World Congress
Derrick KuzakGroup Vice President Global Product Development Ford Motor Company
January 23, 2008
Slide 2
Our Plan
• Aggressively restructure to operate profitably at the current lower demand and changing model mix
• Accelerate the development of new products that customers want and prefer and to grow profitably
– How We Plan– How We Work– Our Product Strategy
• Finance our plan and improve our balance sheet
• Work together
Slide 3
How We PlanGlobal Product Plan Principles
Goal Principles
Ensure a customer view of success
• Achieve benchmark levels of:- % of volume new or significantly freshened- Average age of portfolio- Number of unique showroom nameplates
• Achieve benchmark cadence of timing and scope of product change
Reduce investment through simplification and increased efficiency
• Achieve benchmark levels of:
- Platforms
- Powertrain architectures and combinations
- Order guide complexity
• Ford Brand vehicles shared globally
• Fully differentiated Ford-to-Lincoln vehicles
• Investment at benchmark levels
Slide 4
Average Age of Portfolio (Years)
Ford
Lincoln
2006 2007 2008 2009 2010 2011
Memo: Competitor A 3.1 – 4.2 yrs, Competitor B 3.9 - 4.8 yrs
35% Improvement
Slide 5
Investment Efficiency ImprovementTypical Tophat Investment Improvement (Car)
05CY 07CY
$ (
mils
)
Plant F&T Vendor Tooling Engineering Launch
Overall 20% reduction in tophat
investment
Commonality
• Part re-use and modular designs
Complexity Reduction
• Orderable combinations
• Platform reductions
Procurement Efficiencies
• Low-cost country die sourcing
• Direct tool sourcing with cost models
• On-line quoting for tools
• Direct gage sourcing / Generic gage designs
Plant Manufacturing
• Physical-based costing
• Digital pre-assembly validation
• Flexible automation: body shop, plant facilities
How We Work Achieving World Class Efficiency
Slide 7
PD factoryPD factory
Product Development Objectives
Efficiency Output
Input
# Programs
Engineering Costs
= =
More exciting products, Greater efficiency, Less cost More exciting products, Greater efficiency, Less cost
# Of programs weighted by
market impact
# Of programs weighted by
market impactPD Factory
Engineering costs
Engineering costs
Slide 8
Product Development Efficiency Improvement Actions
• Global Product Development System
• First-time Through Capability
• Improved Virtual Capabilities
• Global Product Development
• Engineering Footprint Migration
• Giving Engineers Time To Engineer
Slide 9
Global Product Development System – Accelerating Product Development
Calendar Year 2004 2006 2008+
New Top Hat Base 24% faster 49% faster
All New Vehicle
(Top Hat + Platform)
Base 19% faster 27% faster
Slide 10
Improved Virtual Capability• Overall prototype spending cut in HALF over 3 year period
– 35% fewer prototype vehicles (Increased Virtual Capability and Commonality)– 20% less cost per unit (Increased Commonality)– 20% less spending on prototype tooling (Increased Virtual and Commonality)
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0%
25%
50%
75%
100%
2006 2007 2008 2009
Calendar Year
% I
mp
rov
em
en
ts
50% Reduction In Spending over 3 Years
Slide 11
Definition Proposal
Top Hat
Platform
CoreCommodities/Subsystems
Top Hat Content and Vehicle Integration
Systems/CommoditiesShared within Platforms
Lead Engineering/Purchasing D&R
Single Lead Design and Engineering Activity for all Top Hats of each Platform
Single LeadEngineering Activity for each Platform
Single LeadFor each system• Body• Chassis• E/E• P/T
Global Product Development - How We Are Working
Our Product Strategy
Slide 13
Global Ford Brand Product Strategy
• Bold, emotive exterior designs
• Great to drive
• Great to sit in
- Comfort and convenience of a second home on wheels
- Remarkably quiet
• Fuel Economy as a reason to buy
• Unmistakably a Ford in look, sound, feel
• All with exceptional value
Slide 14
Design Leadership … What It Takes
• New design process, focused on target customer and design progressives
• Engineering creativity and resolve to deliver winning designs
• Brand aligned, consistent Design DNA
• Exciting designs – “unexpected from Ford” - that bring customers to the showroom
Slide 15
Design Leadership: Millimeters Matter
Slide 16
Ford Verve Concept – North America
Slide 17
Ford Verve Concept - China
Slide 18
Ford Verve Concept - Europe
Slide 19
Global Ford Brand Product Strategy
• Bold, emotive exterior designs
• Great to drive
• Great to sit in
- Comfort and convenience of a second home on wheels
- Remarkably quiet
• Fuel Economy as a reason to buy
• Unmistakably a Ford in look, sound, feel
• All with exceptional value
Slide 20
“Infotainment” and Connectivity - Partnering with the Best
Slide 21
• Generally, product cycle times in the automotive industry range 3 to 5 years
• The electronics industry evolves more rapidly
• SYNC is a Platform that can bridge these two industries– Applications can be built on top of the platform– Faster development of new features enabled through
software– Software also provides upgradeability
Microsoft & the Speed of SYNC
Automotive Cycle Time Consumer Electronics Cycle Time
Slide 22
The Evolution of SYNC
• SYNC started with Hands-Free Phone and Media Player capabilities
• Now SYNC 911 Assist and Vehicle Health Report will be available later this year
• Ford will add in-vehicle GPS technology in 2008 to further enhance SYNC services
• SYNC will offer software upgrades through our dealerships
Slide 23
The Sony Partnership
Sony Branded Audio Unit
Slide 24
• Extending the Ford/Sirius relationship beyond media content to provide information and entertainment content through the Travel LinkTM navigation system.
• This includes:
– Real-Time Traffic
– Movie Listings
– Weather
– Sports
– Gas Prices
Sirius & The Latest In Satellite Communications
Slide 25
Branding with the Best
Slide 26
Global Ford Brand Product Strategy
• Bold, emotive exterior designs
• Great to drive
• Great to sit in
- Comfort and convenience of a second home on wheels
- Remarkably quiet
• Fuel Economy as a reason to buy
• Unmistakably a Ford in look, sound, feel
• All with exceptional value
Slide 27
Showroom Fuel Economy Label Competitiveness2008 vs 2007 Product Line
% C
om
pet
itiv
e L
abel
s
2007 MY 2008 MY
Ford
Industry
Slide 28
Fuel Economy and Performance Competitiveness - Flex
20.5
21
21.5
22
22.5
23
23.5
24
24.5
25
25.5
0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4% Performance Feel
% F
uel
Eco
no
my
Better
AWD Competitor C
Flex 3.5L 6spd Auto AWD
AWD Competitor B
AWD Competitor A
Flex 3.5L 6spd Auto FWD
Slide 29
29
29.5
30
30.5
31
31.5
32
0.8 0.85 0.9 0.95 1 1.05 1.1 1.15%Performance Feel
%F
uel
Eco
no
my
2009 Escape 2.5L 6spd Auto
Competitor A
Competitor B
Better
Fuel Economy and Performance Competitiveness - Escape I4
Slide 30
Fuel Economy and Performance Competitiveness - Fusion I4
30
30.5
31
31.5
32
32.5
33
33.5
99.51010.51111.5 %Performance Feel
%F
uel
Eco
no
my
I4 09 Fusion Auto FWD
Competitor B
Competitor C
Competitor A
Better
Slide 31
EcoBoost
=
(10-20%)
andand
andand
Improved Fuel Economy
Direct Injection
Reduced Emissions (7 – 15%)
Turbo-Charging
Equal or Better Performance
Downsizing
+
+
Slide 32
150
200
250
300
350
400
450
1000 2000 3000 4000 5000 6000
3.5L V-6 EcoBoost
4.6L V-8
EcoBoost Torque Comparison
Engine Torque Comparison
Slide 33
What’s Different – Ford’s EcoBoost• Learned from extensive R&A work and initial
Mazda applications
• Optimized:
a. Ports and chamber through extensive CAE for maximum efficiency without compromising performance.
b. Combustion system for extended stoichiometric operation and maximized compression ratio.
c. Cam events and turbo charger for low speed performance for best powertrain system matching
Slide 34
EcoBoost Application can be Tailored
20
25
30
35
40
0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2% Performance Feel
%F
uel
Eco
no
my
2.5L 6spd
Small I4 EcoBoost Powershift Bette
r
EcoBoost as a base Engine – Mid-Size Car
Slide 35
22.5
22.7
22.9
23.1
23.3
23.5
23.7
23.9
24.1
24.3
24.5
1 1.05 1.1 1.15 1.2 1.25 1.3%Performance Feel
% F
uel
Eco
no
my
4.6L
3.5L EcoBoost
Better
EcoBoost Can be Tailored
EcoBoost as a Premium Engine – MKS
Slide 36
0%
5%
10%
15%
20%
25%
Fuel Economy as a Reason To Buy Near Term Fuel Economy Improvements
Mid-Size Utility
% F
uel
Eco
no
my
150 LBS FinalEPAS, BMS, Fast
Engine Warm-up, ADFSO, N/V opt
Downsized PT with EcoBoost
Technology
5 to 6 speed +ASC
Aero and Parasitic
Improvements
Slide 37
EcoBoost Consumer Perspective
EcoBoost I-4 I-4 Diesel I-4 Hybrid
Payback of Incremental Purchase Price Through Fuel Economy Savings
LowerIs
Better
Slide 38
EcoBoost Migration Plan
0
5
10
15
20
25
30
35
40
45
2009CY 2010 CY 2011 CY 2012 CY
Global Nameplates offering Eco Boost Technology
NA
RoW
Slide 39
Thank You