Vrooom At The Top

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Now Ford has started to operate like a fully integrated global company. It has turned its technical facilities in five countries into what Petersen calls "centers of excellence." Each center is assigned projects that will benefit the company as a whole. Some of the facilities may work on a particular engine, while others may design and engineer common platforms -- the suspension and other undercarriage components -- for an entire family of autos. Ford of Europe, which has its headquarters in Brentwood, England, has been delegated to develop platforms for all three of Ford's compacts: the Tempo, the Topaz and the European Sierra model. At the same time, a team at Ford headquarters in Dearborn, Mich., is working on platforms for a new generation to replace the midsize Taurus and Sable and the European Scorpio. A Ford design center in Hiroshima is working with Mazda to develop a replacement for the subcompact Escort, while a plant in Melbourne, Australia, is building the two-seater Capri sports car.

One of the savviest parts of Ford's strategy is its alliance with Mazda. Instead of continuing to engineer its own small cars, Ford decided to rely on an acknowledged expert. Each partner brings strengths to the collaboration: in general Ford provides the styling while Mazda supplies engineering and manufacturing expertise. The first Mazda-engineered Ford, an $8,500 compact called the Mercury Tracer, appeared in March 1987 and was followed two months later by the two-door Festiva subcompact ($5,900). Last year cars that Mazda helped develop accounted for 3% of Ford's sales, and that percentage will rise substantially with the introduction of the Probe.

Another factor in Ford's surge is a new spirit of cooperation between labor and management. Last September the United Auto Workers union, which represents 104,000 Ford employees, agreed to accept a contract that calls for a moderate average wage increase of 3% this year. The pact includes concessions by both sides. The union said it would help Petersen achieve his goal of creating more Japanese-style teamwork. In exchange, Ford agreed to a provision that bars the company from laying off workers in all but the sharpest of economic downturns. Says Ford Executive Vice President Philip Benton: "The union has come a long way in recognizing the need to be competitive." Adds U.A.W. Vice President Stephen Yokich: "I can see a totally different attitude. We're meeting and talking about our problems." Working together has its rewards: this year's $636 million profit-sharing disbursement is believed to be the largest such payout ever made by an American company. The workers received average bonuses of $3,700, up from $2,100 in 1987.

To protect itself from the vicissitudes of a fickle business, Ford has been moving to diversify. Since 1985, it has bought an 80% stake in Hertz (for $1.3 billion); California's First Nationwide Bank ($493 million), the fourth largest U.S. thrift institution; and BDM International ($425 million), a military research firm that will supplement Ford's longtime aerospace expertise. Ford is rumored to be interested in using its $10 billion cash hoard to go after a much larger acquisition, perhaps a company the size of Boeing, Lockheed or Singer.