Is Geography Destiny?

Teams are essential for most endeavors, and most certainly for developing what is arguably one of the most complicated electromechanical devices being produced today, the automobile.

In late February, Dr. Wolfgang Reitzle, formerly of BMW AG (where he’d worked for 23 years), now group vice president, Ford Motor Company, and president of its Premier Automotive Group (i.e. Aston Martin, Jaguar, Volvo, and Lincoln Mercury) announced that the Ford campus in Irvine, California, a campus known as the “Irvine Spectrum,” will be expanded in the form of a 300,000-sq. ft. facility that is to be completed by the end of next year. Irvine, since July 1998, has been the global headquarters site for Lincoln Mercury. The notion behind the move was that by transferring from southeastern Michigan to southern California, there would be greater freshness and zeal engendered among the staff; the proximity to the Art Center College of Design in Pasadena, as well as to the U.S. office operations of Toyota, Honda, and Nissan, certainly wouldn’t hurt come recruiting time, either. Once completed with the new addition, the campus will be the headquarters for Jaguar Cars North America, Volvo Cars of North America, and Aston Martin Lagonda of North America. In other words, it is the main site for Lincoln Mercury and the continental sites for the other premier brands. And also being fitted into the space will be headquarters for Mazda North American Operations.

Reitzle went on to remark, “As we look to develop our luxury automotive business in North America, we can leverage the strength and synergies of our premium brands by co-locating” them. He added, “As the Lincoln Mercury experience has demonstrated, California is an energetic, consumer-focused culture that will serve as an ideal location to plan the growth of these premium brands. The new headquarters will provide the Premier Automotive Group with a strong bicoastal understanding of luxury consumers.”

Presumably the bi-coastal reference has something to do with the fact that Volvo and Jaguar are currently housed in New Jersey, and that although such things as, for example, the president, franchise development, marketing, communications, and direct support of Jaguar are moving to the left coast, they’ll be keeping a light on in Mahwah, NJ, for dealer operations, parts, service, and systems. Not to minimize those functions, but really . . .

Then there is the comment about the Lincoln Mercury “experience” in California. Although they’ve been rolling out some concepts (e.g., a Mountaineer that is somewhat more distinct than the existing model vis-a-vis platform mate Explorer), their greatest success, the LS, was planned while the Lincoln folks in Dearborn were still California dreaming. . .to say nothing of the occasional rumors that the Mercury brand may go the way of Plymouth. Perhaps there’s something more going on in Irvine than is currently apparent. Although Lincoln Mercury sales in California were up last year more than ever before, what is the likelihood that there are more Grand Marquis cruising Wilshire because of a geographic affinity?

A somewhat troubling issue is the comment about leveraging the “strength and synergies of our premium brands by co-locating them.” The aforementioned LS shares the same platform as the Jaguar S-Type. Some people have argued that although the S-Type may be a fine motor vehicle, absent the distinctively sloping grille, the S-Type looks like, well, something designed in Dearborn. Although Volvo has long been knuckled for having a boxy design, isn’t that boxiness something that differentiates that product from the curved sheetmetal that is rolling out of assembly plants the world over? To be sure, the Volvo designers and engineers have been feverishly working to melt some of those edges to give their products a less distinctive profile, which could be a mistake in and of itself: Just what is a Volvo if it isn’t a boxy car? What I wonder about is whether this synergy may not just result in Volvos that look like Tauruses.

For years, people have been talking and writing (including yours truly) about the importance of teams, product and process development teams, and the paramount importance of co-location. We pointed out that close proximity of people is key. Teams are essential for most endeavors, and most certainly for developing what is arguably one of the most complicated electromechanical devices being produced today, the automobile.

But isn’t there the possibility of teams being non-co-located, of being connected via the Internet? Don’t you want to attract the best people, who may prefer to live elsewhere (although I must admit that when you get in the Newport Beach vicinity in California, those who’d prefer to work elsewhere are somewhat unusual)? Isn’t there a danger that by putting all of the Premier Automotive Group marquees under the same roof may lead to a blurring of the cultural distinctiveness that has provided their value?

Consider this sentence, the last, from Dr. Reitzle’s official Ford biography: “Dr. Reitzle will keep his primary office in London.”

Geography isn’t everything.