Director of Manufacturing (Ford)

This plant has been manufacturing vehicles for almost 30 years now, last year producing its 8 millionth car. In that time, what has been the plants greatest success or what are you most proud of?

The plant is the biggest sight of Ford in the world, so that really speaks a lot about the level of complexity and technology that we have in place here. For me, one of the great assets of this plant is the ability to manage that complexity in a high-volume facility. Up to this point, we have produced about 2050 vehicles per day, in three shifts, 5 days a week. That is about 1 vehicle every 28-30 seconds coming off the assembly line. We have something like 15 different engine families, half a dozen transmissions, and we also manage about 10,000 different part numbers. All of these components have to come and be assembled in the right place, at the right time, in the right color, in the right size, in the right everything, because you only have 35 seconds at each station because the line is moving constantly. The management of this complexity is also possible for a couple of reasons: on the one hand, the flexible body shops with a high level of automation in the area of 97-98%, and we have around 1,400 efficient robots in the plant, which is possible because of the high level of the training and education that our workers have. It is a very efficient system. Another factor that contributes to this high level of efficiency is that fact that all of those parts that I have mentioned are delivered from the industry park (next to our plant) directly to the point of fit on assembly line via tunnels.

Southern Europe is still has relatively inexpensive labor compared with Germany or other North-Europe countries. That is another reason why be believe the future of this plant if we maintain competitive in quality and productivity levels, we will stay here for many years because closing a plant like this in order to move east is not an easy thing to do. The recovery costs may take many, many years, and at the same time, during those many, many years the standard of living is going to increase in those countries thereby reducing the savings of low cost labor. So we believe the future is good for Spain in general and proof of that is here in Valencia where we have invested more than 1 billion dollars in the last 4 years, in an engine program, the Mazda 2, the Fiestas and a new body shop to build the new Focus. You do not make those sorts of investments unless you are planning to stay around for a while.

How did the region help you convince the people at Ford’s headquarters to make those heavy investments here in Spain?

You may know that no direct grants or help can be given to Ford because it is forbidden by EU regulations. However, the government is supporting us indirectly by helping the industry park and the whole automotive industry to be more competitive. For example, the tunnels that I just spoke about, the portions that belong to the industry park were subject to grants. We also receive grants for training and R&D. Another competitive advantage is a great university school that is right here on this sight. There we have a technical engineering degree of 3 years with double the practical portion that the regular universities provide. We have formed this foundation with the government in order to not only be able to utilize those facilities and knowledge for us, but to also extend it to the rest of the industry.

One area is which we have excelled in is safety. I think of the 160 plants in the world, we are ranked #4 or 5 with our safety record. Last year we only had 3 accidents in which we lost time, out of 7,500 workers, and this year we are at about 4 accidents with lost time. That also speaks volumes about the discipline that exists among our workforce and which is present here in Spain, despite the reputation that we Latins have. When you put good systems in place and develop good leadership in your people, then the systems are there and the people comply with those systems when they see the advantages.

You mentioned the advanced technological systems that are already in place here. What can we expect to see in the future?

We will keep up with the technological advances that are taking place within the industry in general, and that happens with every model change. Every time a new model comes to this plant, inevitably there are new technologies that come as well.

Have there been any processes, systems or procedures that were created or designed here that have been exported back to the States or to other Ford plants around the world?

I think this particular region of Spain has a wealth of creative people, which has resulted in some great ideas that have come to us here at Ford. For example, this plant has one of the best Suggestion Boxes in Europe, which allows our employees to share their ideas on how things can be improved. On a worldwide basis the company has received the Technology Excellence award on several occasions, which is very difficult to receive as a manufacturing plant.

For what process or system did the plant win the award last year?

It was a system to ensure the integrity of the spot wielding in the body of the car, so at the same time it is wielding it is also checking that it has been done properly. Safety, which I mentioned before, is another area in which was have won awards. Every year there is a President Health and Safety award given to a plant for performance and innovative application in safety. For example, we innovated a reinforced, plastic baseball caps for maintenance people who have to work with the robots, where there are many pipes and cables, which used to cause frequent, but minor head accidents. This has been implemented worldwide now.

As you mentioned, currently the plant is producing Mazdas, however that contract will expire in 2007. How will this affect the plant?

The future of the Mazda has not been decided. We know that this existing model may be discontinued, but no official decision has been made as to a replacement or not. Because we still have a competitive advantage in cost of labor and in safety, I have no doubts that Ford will continue to produce vehicles in high volume here in Valencia.

How do you go about lobbying or convincing Ford headquarters for the production of a new model to be manufactured here in Valencia as opposed to another Ford plant in Europe?

Basically, you have to prove that you are competitive in quality, delivery and cost as well as safety and environmental issues. Once all those criteria are laid out against other potential sights the business is awarded to a plant. It is not very different from the process that has been going on with regards to the bid for the 2012 Olympic Games.

I suppose the market is another factor that is considered, right?

Actually, the market is not a big factor because in our case, we export between 80-90% of what we produce. By the way, our exports represent 20-25% of the Valencia community’s total exports in any given years, which shows you just how important this plant is to the community.

As the European Union continues to expand, what challenges, opportunities and problems do you begin to prepare for?

We see the expansion of the EU as an opportunity for us as the markets that are growing the fastest are in Eastern Europe. Turkey for example is just exploding. Poland and Russia also have great potential. In addition to that, the strategy of flexible manufacturing, which is the ability to increase or decrease the production of a specific model, and in several different plants, is a great advantage for us. In our case, I believe we are also very strategically located. We export to such distant markets as the Saudi Arabia, Japan, and Australia. Although we do have a plant in China, we are investing cautiously because of what we saw happen in South America. We invested large amounts of money there, but it just never took off.

As future American companies look at Spain as a place to invest or establish operations, what would you say are the advantages of investing in Spain?

I think I already mentioned some of Spain’s advantages, but if I could reiterate a few of them I would say that after 30 years there are very qualified people. Within these people there are excellent engineers coming from the Spanish universities with great knowledge and talent. Their attitudes and dedication towards work is also excellent. The government is also aware of the need to continue to reduce unemployment and therefore every single local/community government will do everything within their power to help new or existing companies establish or expand their operations here. From a logistics standpoint, depending on where you are going to export, Valencia has improved its port so that it is now the best in Spain, and one of the best in the Mediterranean. Communication and transportation with the rest of the continent is also excellent whether by land, sea or air. Labor costs are also still competitive and if the government is able to hold inflation in check, we will remain very competitive. Finally, the amount of suppliers here in Spain is also very impressive. There are now Spanish companies that have the ability to follow their manufacturing clients around the world.