Ford and General Motors approach globalization differently. In its quest for a ‘‘world car,’’ Ford developed the so-called Ford 2000 program by creating five new vehicle centers—four in the United States and one in Europe—each responsible for designing and developing a different type of car worldwide. Ford’s plan was put to test when it built a midsize world car in 1993 known as the Mondeo in Europe and the Ford Contour in North America. Its plan was to manufacture 700,000 cars a year in Europe and North America for nearly a decade with only a ‘‘refreshing’’ after four or five years. Ford executives say they can no longer afford to duplicate efforts and they want to emulate the Japanese, who develop cars that with minor variations can be sold around the world. While the Mondeo/ Contour sold 642,000 units in the first two years in Europe, it had disappointing sales in the United States, attributed to its comparably higher price relative to the car’s predecessors. Successful product development efforts require that the com- pany avoid two problems that can arise from pursuing global design. First, the high cost of designing products or compo- nents that are acceptable in many settings could negatively affect efficiency. Second, the product, in this case a ‘‘world car,’’ may be low cost but meet the lowest common denomi- nator of taste in all countries.
Alternatively, General Motors took a more regional tack by retaining strong regional operations that develop distinctly different cars for their own. If a car has a strong crossover potential, engineers and marketers cross the Atlantic to sug- gest customization. Thus, Cadillac got an Americanized ver- sion of the Opel Omega small luxury sedan developed by GM’s Opel subsidiary in Germany. GM managers contend that ad hoc efforts are cheaper and more flexible. One senior execu- tive at Ford of Europe countered that ‘‘doing two conventional car programs would have cost substantially more than doing one global program. If we did it again, we could do it in 31⁄2 years.’’