Global Insight Perspective | |
Significance | For the first time, global vehicle development responsibility lies with one person, Derrick Kuzak. CEO Alan Mulally has also reshuffled responsibilities so that heads of the various divisions and areas now report directly to him. |
Implications | The opportunity now exists for serious consolidation and coordination of Ford's far-flung vehicle development operations, cutting costs by eliminating complexity and duplication of work, and creating opportunity for the Toyota-style platform engineering so envied by the rest of the industry. Kuzak's goal will be to streamline the process and create that push for communisation across regions. |
Outlook | Kuzak and company have their work cut out for them, and concerns abound that while he may be a talented engineer and excellent manager, the level of automotive enthusiast that Kuzak represents creates worry that he does not have his finger on the pulse of consumer tastes. Ford needs more than engineering solutions to its product woes, it needs an injection of style and relevancy. |
Ford CEO Alan Mulally has named Derrick Kuzak as the new global product development czar. Kuzak, formerly vice-president of product development for the Americas region, will now oversee and coordinate all of Ford's vehicle programmes worldwide, in an attempt to integrate the disparate fiefdoms of the Ford global corporate empire into one cohesive unit. The approach is similar to the tack taken by General Motors (GM) in appointing Bob Lutz as that company's product czar. Lutz has integrated vehicle development and platform usage globally, and Kuzak is largely expected to do the same.
An engineer by education and training, Kuzak has had a number of positions since joining the company in 1978. He has had assignments overseas at Ford of Europe in managerial product development positions, and is one of the key people responsible for the successful first generation Focus compact and Ford's family of sports-utility vehicles (SUVs).
Since taking the top job for North American product development, a position he has had for over a year, Kuzak has made several key changes to how Ford does vehicle development. Gone is the practice of shuffling engineers from programme to programme, and instead cross-border core competency groups are being formed that are eliminating waste and complexity. Kuzak's self-stated goal is to implement a more streamlined system similar to the highly admired Toyota system, in which multiple vehicles can be created on common global platforms. Quickly communising those platforms globally is Kuzak's number one challenge in his new position.
More Direct Reporting
In addition to the new global product czar position that will be filled by Kuzak, the top management has been shuffled somewhat at Ford. Kuzak will retain responsibility for North American product development presumably until that post is filled, but will also now have J Mays, Ford's global design chief, reporting to him.
Mulally will now have direct reports from Kuzak and a number of other executives, including:
- Mark Fields, president of Ford of the Americas
- Lewis Booth, head of Ford of Europe and Premier Automotive Group (PAG)
- John Parker, head of Ford of Asia, Pacific, Africa, and Mazda
- Tony Brown, from Ford Purchasing
- Bennie Fowler, quality and advanced manufacturing engineering
- Nick Smither, information technology
- Richard Parry-Jones, chief technical officer
Outlook and Implications
This is a big move at Ford, but was absolutely necessary if the Way Forward was to have a chance at success. A large part of the relative success (thus far) of GM's turnaround can be attributed to the coordination of its various global activities through one newly centralised command structure centred in Detroit. Ford is now looking to emulate that format by consolidating that responsibility for global development under one person. Mulally is looking to get information straight from the source by having the various executives report directly to him, which follows with the talk out of Dearborn that the buzzword at Ford these days is "accountability."
Kuzak himself is a talented engineer who is very well respected at Ford, and has been proven as a successful manager in leadership positions over three decades. But the position of global product czar requires more than just a knowledge of good engineering practices, it requires an enthusiasm for the product that makes decisions about style and content second-nature. It requires having a finger on the pulse of the consumer public to know what is a good design that will sell, what will be popular, what might generate buzz for the company. Kuzak has talked about success at Ford through feature content, things like small innovations like a petrol cap that is integrated into the fuel filler neck, eliminating the need and cost for the cap itself. Such innovations may be a part of the overall "surprise and delight" element required in any new vehicle in order to please a customer, but such things alone will not save the company.
Global Insight's position has been that Ford most desperately needed two things in order to turn the company around: cash, and a product guru to spend it. With the recent financing deal made by the company, nearly US$23 billion is available to fund the turnaround. And with the appointment of Derrick Kuzak, one person is now responsible for all of Ford's vehicle development. There is hope now that with one person in charge of all vehicle development that the right moves can finally be made in order to bring the company to profitability. But there is also fear that while he is a very competent engineer and excellent manager, Kuzak may not be enough of a car enthusiast or carry the kind of uncompromising drive that such a position requires. The bigger fear is that Ford simply does not have enough time to pull off such a massive restructuring of global platforms. With any new global product at least two to three years off, the challenge of keeping Ford alive while Kuzak tends to new product will be daunting.