The Way Forward

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In 2006, the Ford Motor Company made public a restructuring plan named 'The Way Forward'.

The plan aimed to reduce fixed capital costs while allowing Ford to maintain a special focus on cars and car-based crossover vehicles. Over time, the company had hoped to make more of its product line profitable instead of relying on a limited portion of the products for profit. Making satisfactual profits across the product line required that the company decrease the economical impact of development and production while introducing new products that aimed to appeal to buyers.

In the latter half of 2005, Chairman Bill Ford asked the newly appointed Ford Americas Division President Mark Fields, to develop a plan to return the company to profitability. Fields previewed the plan at the December 7, 2005 board meeting of the company, and it was unveiled on January 23, 2006 to the public. The plan was later revised on September 15, 2006 to accelerate plant closures.^[1]

The plan included resizing the company to match market realities, dropping some unprofitable and inefficient business models, consolidating production lines, and shutting down seven vehicle assembly plants and seven parts factories. Among these were St. Louis Assembly in Hazelwood, Missouri, Atlanta Assembly in Hapeville, Georgia, Batavia Transmission in Batavia, Ohio, Windsor Casting in Windsor, Ontario, Canada, and Wixom Assembly in Wixom, Michigan. Up to 30,000 hourly and salaried jobs (28% of the total workforce) in North America over the next six years were expected to be eliminated, which is comparable to similar cutbacks previously announced at General Motors. These cutbacks were consistent with Ford's roughly 25% decline in U.S. automotive market share since the mid-late 1990s.^[2]

New cars were developed faster using the new Global Product Development System (GPDS). This brought Ford's cycle time closer to its Japanese rivals. Ford also announced that every vehicle in the Ford and Lincoln line up would be built on one of its nine new global platforms, cutting costs significantly. A new style for all Ford and Lincoln vehicles was introduced as Ford wanted "an unmistakable Ford or Lincoln look".^[3]

In addition to said plant closures, the plan also resulted in divestitures; for instance, a joint venture with Mahindra and Mahindra Limited of India ended with the sale of Ford's 15 percent stake in 2005. It also included the sale of wholly owned subsidiary Hertz Rent-a-Car to a private equity group for $15 billion in cash and debt acquisition. The sale was completed on December 22, 2005.^[4]

While Ford had projected returning to profitability sometime after 2010, they beat this goal, and received their first profit in 2009.