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 company
avoid two problems that can arise from pursuing global
design. First, the high cost of designing products or components
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 denominator
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 suggest
customization. Thus, Cadillac got an Americanized version
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 executive
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 3½
years.’’