Ford 2013 Annual Report Download - page 15

Ford Motor Company | 2013 Annual Report 13
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Trends and Strategies
We remain firm in our belief that our continued focus on executing the four key priorities of our One Ford plan enables
us to go further for our customers, dealers, suppliers, employees, shareholders, and other key constituencies:
• Aggressively restructure to operate profitably at the current demand and changing model mix;
• Accelerate development of new products our customers want and value;
• Finance our plan and improve our balance sheet; and
• Work together effectively as one team, leveraging our global assets.
Despite the external economic environment in recent years, we have made significant progress in transforming our
business.
Aggressively Restructure to Operate Profitably
Brands. In recent years, we have eliminated a number of brands from our portfolio in order to devote fully our
financial, product development, production, and marketing and sales and services resources toward growing our Ford and
Lincoln brands.
Manufacturing. We are committed to maintaining an appropriate manufacturing footprint in markets around the world,
both in the more mature markets in which we have an established presence, and in fast-growing newly-developed and
emerging markets. We are making substantial investments in newly-developed and emerging markets, including in
China, India, and Thailand, to increase our production capacity with flexible new manufacturing plants. We and our
unconsolidated affiliates in Asia Pacific Africa have launched four new plants in the past two years, and have announced
that we expect to complete six more plants in the region by mid-decade. We also are making substantial investments in
North America to grow production, including the addition of 200,000 annual incremental units of production capacity during
2013 and significant hiring in the United States as part of our manufacturing capacity expansions. In 2014, we are
increasing capacity or adding production at six of our assembly plants in the United States. In Europe, however, we are
reducing our capacity. As part of our Europe transformation plan, we completed the planned closures of two
manufacturing facilities in the United Kingdom in 2013, and will close our Genk, Belgium manufacturing facility at the end
of 2014. These and other actions are expected to reduce our employment levels and production capacity in Europe,
excluding Russia, by 13% and 18%, respectively.
Suppliers. We continue to work to strengthen our global supply base. As part of this process, we have been reducing
the global number of production suppliers from 3,300 in 2004 to about 1,200 at year-end 2013. We have identified plans
that will take us to a target of about 750 suppliers, and we are confident that our consolidation efforts will result in a
stronger and healthier supply base. We continue to work closely with our suppliers to address any near-term capacity
constraints as we continue to ramp up production. In addition, our move to global vehicle platforms increases our ability
to source to common suppliers for the total global volume of vehicle components resulting in a smaller number of
suppliers receiving a greater volume of purchases to support our global vehicle platforms and allowing us to gain greater
economies of scale.
Ford and Lincoln Dealerships. We have over 11,000 dealerships worldwide. Our dealers are a source of strength
around the world, representing the face of Ford to our customers and local communities. Our goal is to achieve a
profitable dealer network by rightsizing the number of dealerships, identifying the right locations with modern facilities that
deliver an innovative and engaging sales and service experience for our retail customers. In 2013, we added about 100
dealers in China, bringing the total number of Ford dealers in China to more than 600. We plan to add dealers in other
growth markets as well. In the United States, our Ford and Lincoln network had about 3,260 outlets at the end of 2013.
Product Development. Our One Ford global product development system is fully operationalized, utilizing global
platforms to deliver customer-focused programs rapidly and efficiently across global markets. Through our “hub and
satellite” approach, one lead product development engineering center—the hub—is assigned for each global vehicle line,
thereby ensuring global scale and efficiency through common designs, parts, suppliers, and manufacturing processes.
The hubs are supported by regional engineering centers - satellites - which also help deliver products tuned to local
market customer preferences while maintaining global design DNA.
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