Derrick Kuzak

Automotive News World Congress

Derrick KuzakGroup Vice President Global Product Development Ford Motor Company

January 23, 2008

Our Plan

• Aggressively restructure to operate profitably at the current lower demand and changing model mix

• Accelerate the development of new products that customers want and prefer and to grow profitably

– How We Plan– How We Work– Our Product Strategy

• Finance our plan and improve our balance sheet

• Work together

How We PlanGlobal Product Plan Principles

Goal Principles

Ensure a customer view of success

• Achieve benchmark levels of:- % of volume new or significantly freshened- Average age of portfolio- Number of unique showroom nameplates

• Achieve benchmark cadence of timing and scope of product change

Reduce investment through simplification and increased efficiency

• Achieve benchmark levels of:

- Platforms

- Powertrain architectures and combinations

- Order guide complexity

• Ford Brand vehicles shared globally

• Fully differentiated Ford-to-Lincoln vehicles

• Investment at benchmark levels

Average Age of Portfolio (Years)

Ford

Lincoln

2006 2007 2008 2009 2010 2011

Memo: Competitor A 3.1 – 4.2 yrs, Competitor B 3.9 - 4.8 yrs

35% Improvement

Investment Efficiency ImprovementTypical Tophat Investment Improvement (Car)

05CY 07CY

$ (

mils

)

Plant F&T Vendor Tooling Engineering Launch

Overall 20% reduction in tophat

investment

Commonality

• Part re-use and modular designs

Complexity Reduction

• Orderable combinations

• Platform reductions

Procurement Efficiencies

• Low-cost country die sourcing

• Direct tool sourcing with cost models

• On-line quoting for tools

• Direct gage sourcing / Generic gage designs

Plant Manufacturing

• Physical-based costing

• Digital pre-assembly validation

• Flexible automation: body shop, plant facilities

How We Work Achieving World Class Efficiency

PD factoryPD factory

Product Development Objectives

Efficiency Output

Input

# Programs

Engineering Costs

= =

More exciting products, Greater efficiency, Less cost More exciting products, Greater efficiency, Less cost

# Of programs weighted by

market impact

# Of programs weighted by

market impactPD Factory

Engineering costs

Engineering costs

Product Development Efficiency Improvement Actions

• Global Product Development System

• First-time Through Capability

• Improved Virtual Capabilities

• Global Product Development

• Engineering Footprint Migration

• Giving Engineers Time To Engineer

Global Product Development System – Accelerating Product Development

Calendar Year 2004 2006 2008+

New Top Hat Base 24% faster 49% faster

All New Vehicle

(Top Hat + Platform)

Base 19% faster 27% faster

Improved Virtual Capability• Overall prototype spending cut in HALF over 3 year period

– 35% fewer prototype vehicles (Increased Virtual Capability and Commonality)– 20% less cost per unit (Increased Commonality)– 20% less spending on prototype tooling (Increased Virtual and Commonality)

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0%

25%

50%

75%

100%

2006 2007 2008 2009

Calendar Year

% I

mp

rov

em

en

ts

50% Reduction In Spending over 3 Years

Definition Proposal

Top Hat

Platform

CoreCommodities/Subsystems

Top Hat Content and Vehicle Integration

Systems/CommoditiesShared within Platforms

Lead Engineering/Purchasing D&R

Single Lead Design and Engineering Activity for all Top Hats of each Platform

Single LeadEngineering Activity for each Platform

Single LeadFor each system• Body• Chassis• E/E• P/T

Global Product Development - How We Are Working

Our Product Strategy

Global Ford Brand Product Strategy

• Bold, emotive exterior designs

• Great to drive

• Great to sit in

- Comfort and convenience of a second home on wheels

- Remarkably quiet

• Fuel Economy as a reason to buy

• Unmistakably a Ford in look, sound, feel

• All with exceptional value

Design Leadership … What It Takes

• New design process, focused on target customer and design progressives

• Engineering creativity and resolve to deliver winning designs

• Brand aligned, consistent Design DNA

• Exciting designs – “unexpected from Ford” - that bring customers to the showroom

Design Leadership: Millimeters Matter

Ford Verve Concept – North America

Ford Verve Concept - China

Ford Verve Concept - Europe



• Great to drive

• Great to sit in


- Remarkably quiet




“Infotainment” and Connectivity - Partnering with the Best

• Generally, product cycle times in the automotive industry range 3 to 5 years

• The electronics industry evolves more rapidly

• SYNC is a Platform that can bridge these two industries– Applications can be built on top of the platform– Faster development of new features enabled through

software– Software also provides upgradeability

Microsoft & the Speed of SYNC

Automotive Cycle Time Consumer Electronics Cycle Time

The Evolution of SYNC

• SYNC started with Hands-Free Phone and Media Player capabilities

• Now SYNC 911 Assist and Vehicle Health Report will be available later this year

• Ford will add in-vehicle GPS technology in 2008 to further enhance SYNC services

• SYNC will offer software upgrades through our dealerships

The Sony Partnership

Sony Branded Audio Unit

• Extending the Ford/Sirius relationship beyond media content to provide information and entertainment content through the Travel LinkTM navigation system.

• This includes:

– Real-Time Traffic

– Movie Listings

– Weather

– Sports

– Gas Prices

Sirius & The Latest In Satellite Communications

Branding with the Best



• Great to drive

• Great to sit in


- Remarkably quiet




Showroom Fuel Economy Label Competitiveness2008 vs 2007 Product Line

% C

om

pet

itiv

e L

abel

s

2007 MY 2008 MY

Ford

Industry

Fuel Economy and Performance Competitiveness - Flex

20.5

21

21.5

22

22.5

23

23.5

24

24.5

25

25.5

0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4% Performance Feel

% F

uel

Eco

no

my

Better

AWD Competitor C

Flex 3.5L 6spd Auto AWD

AWD Competitor B

AWD Competitor A

Flex 3.5L 6spd Auto FWD

29

29.5

30

30.5

31

31.5

32

0.8 0.85 0.9 0.95 1 1.05 1.1 1.15%Performance Feel

%F

uel

Eco

no

my

2009 Escape 2.5L 6spd Auto

Competitor A

Competitor B

Better

Fuel Economy and Performance Competitiveness - Escape I4

Fuel Economy and Performance Competitiveness - Fusion I4

30

30.5

31

31.5

32

32.5

33

33.5

99.51010.51111.5 %Performance Feel

%F

uel

Eco

no

my

I4 09 Fusion Auto FWD

Competitor B

Competitor C

Competitor A

Better

EcoBoost

=

(10-20%)

andand

andand

Improved Fuel Economy

Direct Injection

Reduced Emissions (7 – 15%)

Turbo-Charging

Equal or Better Performance

Downsizing

+

+

150

200

250

300

350

400

450

1000 2000 3000 4000 5000 6000

3.5L V-6 EcoBoost

4.6L V-8

EcoBoost Torque Comparison

Engine Torque Comparison

What’s Different – Ford’s EcoBoost• Learned from extensive R&A work and initial

Mazda applications

• Optimized:

a. Ports and chamber through extensive CAE for maximum efficiency without compromising performance.

b. Combustion system for extended stoichiometric operation and maximized compression ratio.

c. Cam events and turbo charger for low speed performance for best powertrain system matching

EcoBoost Application can be Tailored

20

25

30

35

40

0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2% Performance Feel

%F

uel

Eco

no

my

2.5L 6spd

Small I4 EcoBoost Powershift Bette

r

EcoBoost as a base Engine – Mid-Size Car

22.5

22.7

22.9

23.1

23.3

23.5

23.7

23.9

24.1

24.3

24.5

1 1.05 1.1 1.15 1.2 1.25 1.3%Performance Feel

% F

uel

Eco

no

my

4.6L

3.5L EcoBoost

Better

EcoBoost Can be Tailored

EcoBoost as a Premium Engine – MKS

0%

5%

10%

15%

20%

25%

Fuel Economy as a Reason To Buy Near Term Fuel Economy Improvements

Mid-Size Utility

% F

uel

Eco

no

my

150 LBS FinalEPAS, BMS, Fast

Engine Warm-up, ADFSO, N/V opt

Downsized PT with EcoBoost

Technology

5 to 6 speed +ASC

Aero and Parasitic

Improvements

EcoBoost Consumer Perspective

EcoBoost I-4 I-4 Diesel I-4 Hybrid

Payback of Incremental Purchase Price Through Fuel Economy Savings

LowerIs

Better

EcoBoost Migration Plan

0

5

10

15

20

25

30

35

40

45

2009CY 2010 CY 2011 CY 2012 CY

Global Nameplates offering Eco Boost Technology

NA

RoW

Thank You

Derrick Kuzak

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