Ford 2002 Annual Report Download - page 8

Chairman’s Message
6
Europe, Ford Fiesta. These new and improved
vehicles joined a lineup that already featured the
best-selling car, truck and sport utility vehicle in
the world — Ford Focus, F-Series and Explorer.
An example of our drive for product leadership is
the Lincoln brand, which a year ago had the oldest
lineup in its history and today has the newest.
In the year after our revitalization plan was
launched, we removed the distractions of our
recent past and built a solid foundation for success.
But given the uncertainty in the world and the fierce
competition in our industry, we know we have to
accelerate our efforts. Investors are looking for con-
tinuing signs of progress and ongoing improvement
of results. To do that we are expanding a number of
proven initiatives and systematically identifying and
eliminating roadblocks to progress.
One of the processes we are expanding to accel-
erate cost reduction and quality improvement is
Consumer Driven 6-Sigma, a data-driven metho-
dology that uses statistical tools to reduce waste
and variability. Companies such as GE and
Motorola have applied 6-Sigma successfully to
their operations. Ford is the first and only auto-
maker to deploy 6-Sigma throughout all of its
operations. Our 6-Sigma projects have saved us
more than $675 million worldwide since we began
using it in 2000. Last year alone, it saved us $200
million in North America and was responsible for a
significant portion of our quality improvement. For
2003 we are asking our team leaders to double
the number of 6-Sigma projects they initiate.
Another process that we will expand in 2003 is
Team Value Management (TVM). TVM brings our
engineering, purchasing, manufacturing and finance
areas together with our suppliers in commodity-
focused teams to improve value while maximizing
quality. Following its very successful deployment in
Europe we launched it in North America late last
year. By April 2003, 59 TVM teams will be in place
in North America representing 70 percent of our
global purchasing buy. TVM is a key component
in achieving our financial objectives for the year.
In January 2003 we added a new process aimed
exclusively at systematically accelerating our cost
cutting. Our leadership team identified cost-reduc-
tion bottlenecks in two broad categories, global and
operational, and assigned a cross-functional team
led by a high-ranking executive to every issue. The
teams and their leaders are responsible for finding
faster and better ways to reach our cost reduction
goals, and will report their progress to senior
management on a monthly basis.
We are committed to improving our overall automo-
tive cost performance by at least $500 million in
2003 at constant volume and mix, and our quality
performance in every region. We also intend to
improve our market share around the world by
capitalizing on the first full year of sales for many
of our recently launched products and introducing
more new products, such as Ford F-150 and
Jaguar XJ. We expect our results for the year to
include break-even performance in our automotive
operations and improved cash contributions at
Ford Credit. We project that the end result will
be estimated earnings of 70 cents a share.
In 2003 we will honor our past as we celebrate our
centennial year. At the same time we will embrace
our future by building on our traditional strengths
and redefining them for the 21st century. Examples
of the innovative new approaches we are taking
can be found in our products and processes
around the world.
To build the new F-Series truck, we are transforming
the Ford Rouge Center — the icon of 20th century
manufacturing — into a model of 21st century
lean, flexible, and sustainable manufacturing. The
Dearborn Truck Plant at the Rouge, which begins
production mid-year, will be the flagship of Ford’s
next generation of lean and flexible plants, capable