Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor — Investor Day (January 2002)
32 slides from Ford Mtr Co Del's investor day presentation, Jan 11, 2002
Slide 1: Corporate Revitalization Plan Analyst Meeting
Fort lor Company, CORPORATE REVITALIZATION PLAN ANALYST MEETING JANUARY 11, 2002
Slide 2: Agenda -- Ford Revitalization Plan
AGENDA -- FORD REVITALIZATION PLAN OVERVIEW BILL FORD PLAN DETAILS NICK SCHEELE QUESTIONS & ANSWERS BILL FORD NICK SCHEELE JIM PADILLA MARTIN INGLIS
Slide 3: Key Elements of Ford Revitalization Plan
KEY ELEMENTS OF FORD REVITALIZATION PLAN NORTH AMERICA REVITALIZATION -- RESTORE TO STRONG PROFITABILITY — NEW PRODUCT ACTIONS — CONTINUE QUALITY IMPROVEMENTS — MAJOR CAPACITY RATIONALIZATION -- FROM 5.7 TO 4.8 MILLION UNITS — COST REDUCTION INITIATIVES EUROPE -- BUILD ON SUCCESSFUL TRANSFORMATION S
Slide 4: What Went Wrong?
WHAT WENT WRONG? LATE-90’s HIGH RETURN ON TRUCK BUSINESS IN NORTH AMERICA & FULL PLANT UTILIZATION REDUCED FOCUS ON CORE AUTO OPERATIONS DOWNSTREAM BUSINESSES E-BUSINESS STRAINED RELATIONS WITH DEALERS & EMPLOYEES POOR EXECUTION QUALITY FLAT POOR LAUNCHES REDUCED NEW PRODUCT FLOW SLOWED RATE OF COST
Slide 5: Ford Revitalization Plan
FORD REVITALIZATION PLAN CONTINUE EUROPEAN TRANSFORMATION ETS IMPLEMENT NORTH AMERICA REVITALIZATION PLAN BACK TO BASICS REFOCUS FORD CREDIT & OTHER OPERATIONS GROW PREMIER AUTOMOTIVE GROUP
Slide 6: Back to Basics
BACK TO BASICS + RE-BUILD PRODUCT PIPELINE IMPROVE QUALITY RIGHT-SIZE CAPACITY REDUCE COSTS EMPHASIZE RETURNS
Slide 7: Actions Already Taken
ACTIONS ALREADY TAKEN OPERATING CAPITAL NORTH AMERICA AUTOMOTIVE SHIFT DELETIONS & LINE-RATE CHANGES + REDUCED DIVIDEND FROM $1.20 COMPENSATION & BENEFIT REDUCTIONS TO $0.60 PER ANNUM PERSONNEL REDUCTIONS ENDED SHARE REPURCHASE AUSTERITY ACTIONS PROGRAM ANNUAL PROFIT IMPROVEMENT WORKING CAPITAL EFFI
Slide 8: Ford Revitalization Plan
FORD REVITALIZATION PLAN CONTINUE IMPLEMENT EUROPEAN NORTH AMERICA TRANSFORMATION REVITALIZATION PLAN SY —@ BACK TO BASICS eo 4 ETS REFOCUS GROW FORD CREDIT PREMIER & OTHER OPERATIONS AUTOMOTIVE GROUP
Slide 9: Europe
EUROPE CONTINUE TURNAROUND TO ACHIEVE SUSTAINABLE PROFITABILITY AUTOMOTIVE AFTER-TAX ROS (PCT.) LEADING RETURNS IN REGION RETURN TO PROFITABILITY om + EXCESS CAPACITY + CLOSURE OF 4 PLANTS & + FIESTA IN 2002 + POOR QUALITY IMPLEMENTED JVs & OUTSOURCING «DELIVERY OF 45 NEW + LIMITED PRODUCTS + WORKFO
Slide 10: Europe: Transformation Strategy Delivers Results
EUROPE TRANSFORMATION STRATEGY DELIVERS RESULTS FORD BRAND CAR & TRUCK MARKET SHARE CAPACITY UTILIZATION QUALITY -- CUSTOMER SATISFACTION* EUROPEAN REGION NET REVENUE (BILS.) AFTER-TAX RETURN ON SALES * GORS 3-MIS *~ Estimate 2000 8.2% 74% 57% $29 0% 2001 8.6% 84% 62%
Slide 11: Ford Revitalization Plan
FORD REVITALIZATION PLAN CONTINUE IMPLEMENT EUROPEAN NORTH AMERICA TRANSFORMATION REVITALIZATION PLAN ETS SY —@ BACK TO BASICS eo 4 REFOCUS GROW FORD CREDIT PREMIER & OTHER OPERATIONS AUTOMOTIVE GROUP
Slide 12: North America Key Actions
NORTH AMERICA KEY ACTIONS + RE-BUILD PRODUCT PIPELINE « IMPROVE QUALITY * RIGHT-SIZE CAPACITY * REDUCE COSTS « OPTIMIZE REVENUE GENERATION
Slide 13: North America: Re-build Product Pipeline
NORTH AMERICA RE-BUILD PRODUCT PIPELINE MAJOR NEW MODEL INTRODUCTIONS 2001 2002 2003 2004- 2006
Slide 14: North America: Improve Quality
NORTH AMERICA TEAM HAS DEMONSTRATED ABILITY TO IMPROVE QUALITY SIGNIFICANT ACHIEVEMENTS QUALITY IMPROVEMENT JAGUAR (RANK) * 30 mm 2 FORD EUROPE * 57% mm 62% FORD MOTO! 7 AMERICA “* TODAY * J.D. Power IQS (by make) = GORS (Ford intemal) =* J.D. Power IQS (by multi-Corp. OEM) ACTION PLAN ESTABLISH FOC
Slide 15: North America: Right-size Capacity
NORTH AMERICA RIGHT-SIZE CAPACITY -- DELIVER MORE STABLE & PROFITABLE MANUFACTURING SYSTEM + MORE CONSERVATIVE PLANNING — TRADE CAPACITY SHORTFALLS DURING SALES PEAKS FOR BETTER SYSTEM EFFECTIVENESS + INCREASE MANUFACTURING SYSTEM FLEXIBILITY CONCURRENT WITH SPENDING ON NEW PRODUCTS -- ENHANCES UTIL
Slide 16: North America: Improved Capacity Utilization
NORTH AMERICA IMPROVED CAPACITY UTILIZATION CAPACITY COMPARED TO PRODUCTION (UNITS -- MILS.) MAXIMUM INSTALLED “ CAPACITY PRODUCTION “4-1 —- 1997 2001 ONGOING MANNED 106% 101% 106% 106% 95% 104% 105% = 112% CAPACITY UTILIZATION
Slide 17: North America: Facility Plans
NORTH AMERICA FACILITY PLANS PLANT CLOSURES BY MID-DECADE EDISON ASSEMBLY CLEVELAND ALUMINUM ONTARIO TRUCK VULCAN FORGE ST. LOUIS ASSEMBLY PLANTS WITHOUT NEW PRODUCTS OHIO ASSEMBLY CUAUTITLAN ASSEMBLY MAJOR DOWNSIZING / SHIFT REDUCTIONS -- 11 PLANTS OPERATING PATTERN / LINESPEED CHANGES -- 9 PLANTS
Slide 18: North America: Full Benefits of Cost Reductions
NORTH AMERICA FULL BENEFITS OF COST REDUCTIONS REALIZED MID-DECADE COST REDUCTIONS — CAPACITY — MATERIAL — OVERHEAD x PRODUCT COST INCREASES — NEW PRODUCT INTRODUCTIONS — CUSTOMER SATISFACTION — SAFETY & EMISSIONS 2001 MID DECADE
Slide 19: North America: Cost Reductions Will Improve Margins
NORTH AMERICA COST REDUCTIONS WILL IMPROVE MARGINS INTENSIVE PRODUCT (MATERIAL) COST REDUCTION PROGRAM + 300 DEDICATED ENGINEERS -- INCREASED FOCUS ON COST REDUCTION EFFORTS + SUPPLIER COST IMPROVEMENT SHARING (65% / 35%) + TECHNICAL ADVANCEMENTS FOR EMISSIONS OVERHEAD COST REDUCTIONS + PEOPLE -- SA
Slide 20: Powertrain Strategy -- Example of Cost & Quality Improvement
POWERTRAIN STRATEGY -- EXAMPLE OF COST & QUALITY IMPROVEMENT THROUGH GLOBAL SYNERGIES SMALLER MANUFACTURING CELLS INCREASE FLEXIBILITY & REUSABILITY COMMON PRODUCT DEVELOPMENT & MANUFACTURING PROCESSES WORLDWIDE ENGINE & TRANSMISSION ARCHITECTURE REDUCTION — 82% OF ENGINES OFF SEVEN ENGINE FAMILIES
Slide 21: Ford Revitalization Plan
FORD REVITALIZATION PLAN CONTINUE IMPLEMENT EUROPEAN NORTH AMERICA TRANSFORMATION REVITALIZATION PLAN ETS SY —@ BACK TO BASICS eo 4 REFOCUS GROW FORD CREDIT PREMIER & OTHER OPERATIONS AUTOMOTIVE GROUP
Slide 22: Premier Automotive Group Strategy
PREMIER AUTOMOTIVE GROUP STRATEGY OPPORTUNITY & STRATEGY + FASTEST GROWING HIGH MARGIN SEGMENTS + EARN PREMIUM RETURNS BY SELLING GREAT PRODUCTS WITH PREMIUM BRANDS THAT DO NOT HAVE SIGNIFICANT CUSTOMER OVERLAP PRIORITIES LEAD IN CUSTOMER SATISFACTION & LOYALTY CONTINUE TO IMPROVE MARGINS & THE BUSI
Slide 23: Premier Automotive Group: Strategy to Deliver Premium Returns
PREMIER AUTOMOTIVE GROUP STRATEGY TO DELIVER PREMIUM RETURNS BRAND EXCLUSIVITY SCALE WERGEDES BMW VOLVO LINCOLN LAND JAGUAR ASTON MERCEDES BW VOLVO LINCOLN LAND JAGUAR ASTON ROVER MARTEL ROVER MARTEL HIGH TRANSACTION PRICES & LOWER COST, ASSET EFFICIENT STRONG RESIDUAL VALUES
Slide 24: Premier Automotive Group: Share of Profit to Increase
PREMIER AUTOMOTIVE GROUP SHARE OF TOTAL COMPANY PROFIT TO INCREASE DRAMATICALLY 2000 MID-DECADE
Slide 25: Ford Revitalization Plan
FORD REVITALIZATION PLAN CONTINUE IMPLEMENT EUROPEAN NORTH AMERICA TRANSFORMATION REVITALIZATION PLAN ETS SY —@ BACK TO BASICS eo 4 REFOCUS GROW FORD CREDIT PREMIER & OTHER OPERATIONS AUTOMOTIVE GROUP
Slide 26: Ford Credit: Re-focus Strategic Direction
FORD CREDIT RE-FOCUS STRATEGIC DIRECTION MODIFY VISION & MISSION MODERATE ASSET GROWTH FROM GLOBAL AUTO FINANCE SUPERPOWER INDUSTRY- LEADING GROWTH BROAD RANGE OF PRODUCTS & SERVICES MANAGED RECEIVABLES (BILS.) PRIOR $245 PLAN To FOCUS ON AUTO FINANCING TO. FORD BRANDS SUPERIOR PROFITABILITY $210" F
Slide 27: Ford Credit: Three Key Elements in Strategy
FORD CREDIT THREE KEY ELEMENTS IN STRATEGY REDUCE NON-FORD BRAND & HIGHER RISK FINANCING COMPLETE SERVICE CENTER RESTRUCTURING MAXIMIZE SYNERGIES ACROSS NORTH AMERICA STRATEGIC PARTNERING IN BRAZIL & OTHER: SELECTED MARKETS MONITOR DIVIDEND TO MANAGE LEVERAGE FORD TO CONTRIBUTE $700 MILS. OF EQUITY
Slide 28: Strategy for Other Businesses
STRATEGY FOR OTHER BUSINESSES ACCELERATE RESTRUCTURING LEVERAGE LOWEST COST PLANT FOR MARKETS OUTSIDE SOUTH AMERICA 4 LEVERAGE JOINT VENTURES RIGHT-SIZE CAPACITY & IMPROVE EFFICIENCY SOURCE FOR COST EFFECTIVE IT & BUSINESS SERVICES + EXTENSIVE COOPERATION — PLATFORM SHARING — POWERTRAIN ARCHITECTURE
Slide 29: Fourth Quarter Restructuring & Other Charges
FOURTH QUARTER RESTRUCTURING & OTHER CHARGES 2001 PRE-TAX EFFECT OF CHARGES a FIXED-ASSET IMPAIRMENTS NORTH AMERICA $(3.1) SOUTH AMERICA (0.7) TOTAL FIXED-ASSET IMPAIRMENTS 5(3.8) PRECIOUS METALS (1.0) PERSONNEL (PRIMARILY N. AMERICA SALARIED) (0.6) ALL OTHER (0.3) TOTAL FOURTH QUARTER CHARGES 55.7)
Slide 30: Revitalization Improves Profits $9 Billion
REVITALIZATION IMPROVES PROFITS $9 BILLION ANNUAL PRE-TAX OPERATING PROFIT (BILS.) U.S. ASSUMPTIONS PLANNING IMPROVEMENT, ins 8 PLAN 2001 _ BEYOND INDUSTRY SAAR (MILS.) 17.6 6 FORD BRAND MARKET SHARE (PCT) 18.9% += 19% NET PRICING (PCT.) - LESS THAN ZERO RUNNING RATE MID-DECADE (BASE)
Slide 31: 2002 External Milestones
2002 EXTERNAL MILESTONES RESTRUCTURING PRIORITIES COMMUNICATE / IMPLEMENT PLANS QUALITY (U.S.) CAPACITY UTILIZATION (N. AMERICA) NON-PRODUCT-RELATED COST DIVEST NON-CORE OPERATIONS FINANCIAL RESULTS + CORPORATE — PRE-TAX OPERATING EARNINGS — CAPITAL SPENDING + EUROPE + SOUTH AMERICA MILESTONES REPOR
Slide 32: Key Elements of Ford Revitalization Plan
KEY ELEMENTS OF FORD REVITALIZATION PLAN NORTH AMERICA REVITALIZATION — RESTORE TO STRONG PROFITABILITY — NEW PRODUCT ACTIONS — CONTINUE QUALITY IMPROVEMENTS — MAJOR CAPACITY RATIONALIZATION -- FROM 5.7 TO 4.8 MILLION UNITS — COST REDUCTION INITIATIVES EUROPE -- BUILD ON SUCCESSFUL TRANSFORMATION ST