Ford Motor Co., which won praise for centralizing its operations in an effort to cut costs, said yesterday it was decentralizing its operations in order to better target customer needs.
Ford's new strategy is in effect an acknowledgment that centralizing decision-making--while achieving savings on the bottom line--had left the company unable to respond quickly to shifts in customer demands.
For instance, toward the mid-1990s, consumers started asking for minivans with four doors, including a sliding door on the passenger sides of those vehicles. Chrysler Corp., which is now a part of DaimlerChrysler AG, responded with four doors. Other automakers followed. But Ford introduced its 1995 Windstar with three doors, and that model took a beating in the marketplace as a result.
Today's Windstar comes with four doors, but officials want to avoid making a costly three-door mistake in the future.
So, now, the company will reorganize itself into 11 major business groups, hoping to better target products and marketing, and plans to speed up product delivery to customers worldwide.
The reorganization, scheduled to take effect Jan. 1, 2000, could result in different cars and trucks being sold in different regions, depending on regional consumer demand.
The changes also could lead to the reduction of generic, national corporate advertisements in favor of broadcast and print pitches with a more regional message, according to some company officials and auto industry analysts.
That development could shift more of Ford's annual ad spending to local television, newspaper and print outlets, analysts said.
Ford, the nation's fifth-largest national advertiser, spent $654.7 million on media ads in the first six months of this year, a 7.1 percent increase over the $611.3 million it spent in the same period in 1998, according to figures provided by Competitive Media Reporting in New York.
"These changes are more about how we work together to get closer to consumers than they are a change in our organization chart," said Jacques A. Nasser, Ford's president and chief executive, who has vowed to turn Ford into the world's "top consumer business."
"What we really want to achieve is a business philosophy that empowers teams to closely focus on consumers," Nasser said. "These changes better align our work with our visions."
Under the plan, Ford will have seven main auto business units and four service groups.
The business groups include Ford North America, Ford Europe, Ford Asia Pacific and Ford South America. Ford North America will be subdivided into Ford Car, Ford Truck, Ford Division (primarily to handle dealer relations), Ford Canada and Ford Mexico.
There also will be a global Premier Automotive Group to handle Ford's luxury brands, including Jaguar, Aston Martin, Volvo, Lincoln and Mercury.
Ford's Mazda Motor and Visteon Automotive Systems subsidiaries will function as separate groups. However, Ford officials said Visteon remains a spinoff candidate.
Service groups will include Ford Credit, Hertz Rental Car, Ford Customer Service, and the company's new global electronic-business unit, Ford Investment Enterprise Corp.
The new organization will "allow Ford to consistently deliver innovative products and services that delight customers by focusing on brands and consumer needs," Nasser said.
CAPTION: Ford President and CEO Jacques Nasser