Ford's Fields and Stevens Call for New Roadmap, Innovation to Drive Auto Industry to the Future

WHITE SULPHUR SPRINGS, W.Va., Oct. 15, 2005 -- The automotive industry needs to quickly develop a new roadmap and press harder for innovation to connect the industry's great past with the needs of tomorrow, two Ford Motor Company executives told industry leaders at this weekend's "Global Leadership Conference at The Greenbrier."

Mark Fields, Ford executive vice president and president of the Americas, and Anne Stevens, newly appointed Ford executive vice president and chief operating officer of the Americas, made the comments as part of keynote addresses at the Society of Automotive Engineers' prestigious industry conference, attended annually by automakers, suppliers and business leaders.

"The auto industry events of the past week prove that the roadmaps our companies followed for 100 years are no longer valid," Fields said. "Business models have changed. Consumers and markets have changed. We have to change, too. From now on, only those automakers and supplier companies that find new ways to work together -- and strike down some new, uncharted paths -- are going to survive."

  Fields said the auto industry faces seven specific and serious challenges:
  * Globalization is bringing more competition to the U.S.
  * The "balance of power" in the industry has shifted with China and India
    emerging as top markets
  * Market dynamics are changing, causing intense competition in every part
    of the market
  * Customers are becoming even more demanding
  * Customers' views of their automobiles are changing faster than ever,
    with cars increasingly becoming an expression of who people are rather
    than mere transportation
  * Legislative pressure is increasing
  * Oil production is peaking, and concern for the environment is growing.

"We must grapple with all seven of these challenges," Fields said. "Guts, grit and new ideas will be the key to winning in the automotive game today."

At Ford, Fields says, the team is using the best lessons from around the world to develop the roadmap and innovation for the future. Personally, Fields says, he is bringing the lessons he learned from 10 years outside the United States -- at Mazda in Japan and in Europe running the Premier Automotive Group and Ford of Europe -- to his new role leading Ford's American operations.

"The task is to fix the business and then seek competitive advantage through innovation," Fields said. "All actions in North America are going to be fast, focused and fundamental. We will jettison excess bureaucratic baggage. We will break constraints. And we will make firm decisions.

"We are poised to win because we have a group of leaders who will not tolerate failure," Fields continues. "It's going to be uncomfortable but exhilarating at Ford Motor Company in the months ahead."

Newly appointed as Ford's chief operating officer in the Americas, Stevens outlined the critical role of innovation in moving the auto industry forward. With its expansive scientific and technical knowledge, the auto industry has the opportunity to be the first generation to actually give back to the planet, she explains. Ford's Escape Hybrid and Mariner Hybrid, along with the lean, green and flexible Ford Rouge Plant, are examples of the confident first steps Ford has taken toward this goal.

"Innovation is at the heart of American progress, and it is right up there with 'individual rights' and 'liberty' as attitudes that literally put this country on the map," Stevens said.

Additional steps need to be taken by all automakers in areas such as alternative fuels, biodiesel, fuel cells and hydrogen powered vehicles, she said. The industry can accomplish the goals in a timely and orderly fashion by using "good old American innovation."

But getting innovations off the ground requires engineers to breathe new life into new ideas. Stevens expressed concern that, with the declining number of students studying science and engineering, the future of the U.S. auto industry runs the risk of being completely dependent on engineering knowledge residing abroad. The building blocks of the auto industry are eroding at a time when such nations as China are gathering strength, she said, pointing to the fact that:

  * Fewer students are studying science and engineering. Enrollment in
    first-year engineering programs is down more than 5 percent since 2002.
  * Electrical engineering is starting to decline, as well. Computer science
    is even more alarming -- with enrollment for first-year students off 31
    percent from 2001.
  * China is graduating five times the number of engineers this year as in
    the U.S. -- and graduating an equal number of PhDs.
  * In the U.S., foreign nationals earned more than 50 percent of master's
    degrees in engineering and 63 percent of PhDs.
  * Less than 20 percent of graduate engineering students in the U.S. are
    women, and only 10 percent of the engineering workforce is female.  This
    makes it the most segregated of all professions in the U.S. today.

"This does not bode well for the manufacturing base in the United States -- and that means us," Stevens said. "If America is to maintain its manufacturing know-how, we must fill that engineering pipeline. We cannot afford to be slow to market because of an insufficient engineering base at home.

"We at Ford urge the entire auto industry to join together encourage our young people to pursue the studies that will prepare them to become our future colleagues. We need these engineers of the future if we intend to continue the spirit of American innovation that created our industry itself."