Ford Has Figured Out How To Save Billions By Doing More With Less

Industry News

The plan is so simple it’s brilliant.

Back in 2005, then newly hired Ford CEO Alan Mulally realized the automaker wasn’t going to make it, financially speaking. It was not good business to have 30 global architectures. In fact, it was horrible business and it drained Ford’s bank accounts. The solution was One Ford, Mulally’s extremely successful plan that saw a reduction in the total number of global architectures brought down to nine.

Ford saved billions as a result and it managed to survive the Great Recession without a government bailout. Today, according to Automotive News, Ford has a new plan to further modify One Ford by further reducing its global architectures down to just five.

By having five modular platforms available, the automaker has realized it can compete in every market in which it sells cars and save billions as a result. Supposedly, Ford will save $25.5 billion in costs over the next five years by having five modular architectures.

"This is not saying One Ford was wrong. This is building on the strategy of One Ford and evolving from it," said Hau Thai-Tang, Ford's head of product development and purchasing. Not only will reducing the number of platforms down to five save money but will also increase supplier base efficiency.

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Put it like this: “Up to 70 percent of a vehicle’s value can be managed through a modular approach,” according to Tang. What will these five platforms ultimately be? Here they are: rear-wheel-drive/all-wheel-drive body-on-frame; front-wheel-drive/AWD unibody; commercial van unibody; RWD/AWD unibody; and a unibody platform for battery-electric vehicles. As you can see, this will accommodate trucks/SUVs, crossovers/passenger cars, sports cars like the Mustang, utility vans, and, of course, electric vehicles. Ford has already announced its plan to phase out sedans in the US in order to focus on crossovers, trucks/SUVs, and the Mustang. This upcoming modular platform setup is specifically catered to that.

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