Ford aims to differentiate brands

Automotive Industries, Feb, 1998 by Marjorie Sorge

FAO President Jac Nasser may lose his `Jac the Knife' nickname. Are you ready for `Jac the Savior?'

It's been a little more than a year and a half since Jac Nasser took over as head of Ford Automotive Operations, and it's never going to be the same.

He's been busy, chopping out costs and products. Some say he continues to earn his nickname, "Jac the Knife." Others says he's tired of that moniker and hopes to soften his image a bit

In the last 18 months Nasser has:

* Cut $3 billion from FAO's costs, helping to boost Ford earnings to a record $6.9 billion and outdoing rival General Motors, which ended 1997 with a $6.7 billion profit. Cost cuts for 1998, however, won't be that high, Nasser says.

* Axed several models including the Aerostar, Probe, Thunderbird, Kia-based Aspire, rear-wheel-drive Cougar and most recently, the Lincoln. Mark VIII. However, a new Thunderbird with retro cues (think '57) debuts around 2000.

* Moved Lincoln-Mercury's headquarters from Dearborn, Mich, to Irvine, Calif., to pump some fresh-think into a stodgy division

* Added a fourth vehicle to the Jaguar operation. Due out in 2001, the X400 joins the current XJ8 and XK8 and the X200, which is scheduled to debut about a year from now. The X400 goes up against the BMW 5-Series and the Mercedes C-Class. For all intents and purposes, Jaguar seems to be Ford's luxury global car.

* Begun making Ford's six brands -- Ford, Lincoln, Mercury, Jaguar, Aston Martin and Mazda -- more distinctive as part of a worldwide strategy to gain share. Mazda, which already has a strong reputation in Asia, will take the lead there. Aston Martin and Jaguar are aimed at the "upper crust," while Ford, Lincoln and Mercury hold down the fort in the U.S. and Europe.

"We've got Ford, Jaguar, Lincoln/Mercury, Aston Martin and Mazda," Nasser says. "I think it is pretty clear that we are going to push our brains to get the maximum out of each of those."

The changes are showing up in design, technology and marketing strategies. Ford Div. vehicles will have an oval front end. It's on the Mondeo, Contour, Escort and Fiesta, and there's a suggestion of it on the sub-B-class Ka. Lincolns have a distinct front end with a vertical texture on the headers of the grille.

The next challenge is to develop a distinct Mercury design. The '99 Cougar is one example of Ford's new "edge" design. It has a very "precision look," a technical look both on exterior and interior.

The brands will also share technology. Ken Kohrs, head of the large and luxury vehicle center, says he's most proud of the Aston Martin Project show car revealed at the98 North American International Auto Show. "The technology that's on that car is something I hope we can see in the future," Kohrs says, pointing to the Formula One-inspired paddle shifters and carbon fiber technology which could show up soon on the Aston Martin and possibly an upmarket Jaguar. Once the new electronic shifter debuts it will be anybody's guess how the transmission is controlled in the future -- perhaps by voice. "One of the nice things about Aston Martin is, it's so small and nimble. Things just happen very quickly. There is no bureaucracy, " Kohrs says.

"By the numbers, Nasser is doing the right thing," says Dave Cole, director of the Center For The Study Of Automotive Transportation in Ann Arbor, Mich. "But we must test it with history The question is, by doing these things in the haste of cost-cutting, are you mortgaging your future?"

All that aside, Ford still has a capacity problem. Things are OK in the U.S., Nasser says. Ford's increased sport-utility capacity to meet skyrocketing demand by adding a third shift and becoming more efficient. But he claims killing the Aerostar, Probe, Thunderbird, rear-wheel-drive Cougar and Lincoln Mark VIII helped reduce capacity to keep total production in balance.

However, he admits, "We don't have enough capacity in India or China."

Does that mean Ford might buy an operation in one of these regions to boost capacity" Probably not, Nasser says, emphasizing Ford doesn't need any more brands.

"We can stretch our own capacity with efficiencies," he says.

Ford's doing that with Jaguar Europe by adding the new X400 to the Halewood, England plant, which would have been idled when the Escort pulled out around 2000. Now, Halewood not only stays open, but it will build a higher margin vehicle, which should please stockholders.

That decision earned Nasser high praise from the British press, and perhaps the end of the "Jac the Knife" reputation there. During one press conference at the Detroit show, one of the reporters jumped up and said, "All this `Jac the Knife' stuff isn't right. You are `Jac the Savior.'" That took Nasser back a bit. He responded, "No, don't go that far. I don't want to go from a knife to a savior."