How Ford Started a New Business Called Lincoln

DETROIT (TheStreet) -- For what could well be his last revitalization project at Ford ( F), CEO Alan Mulally has established a start-up business inside a $132 billion corporation.

That business is called Lincoln. Its goal is to introduce a new player, albeit one with an old name, in the harshly competitive, well-established luxury-car business, where the odds for success are long. The effort begins Tuesday. Last night, Lincoln unveiled the first step in its transformation, the MKZ luxury sedan.

"What you're going to see at the New York Auto Show with the MKZ is going to be one of those tremendous proof points that allows everyone to see where Lincoln is going, and then we'll follow up with other vehicles," Mulally said in an interview.

"We're doing it just right," Mulally said. "We had to restructure Ford and get Ford going again. Now we can do the same thing with Lincoln, and wait till you see the reaction."

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A team of about 200 people is working on Lincoln. That team has been growing -- 18 months ago, it numbered just 10 people -- with members brought in from outside as well as some hand-picked from within Ford. Included is design director Max Wolff, who was hired away from Cadillac in December 2010.

"We've got an incredibly dedicated Lincoln team of people who eat, breath and sleep Lincoln," Wolff said. "The Lincoln studio is proof of that from a design standpoint. It (represents) the first time Ford has dedicated space purely for Lincoln." The team includes about 25 dedicated designers.

For Wolff -- indeed, for many at Lincoln -- the excitement comes from working to transform something historic into something that is new.

"One of the things is that Lincoln, as a brand name, is recognized: I knew about it growing up in Australia," Wolff said. "But we have the opportunity now to position Lincoln as a different brand, a world class luxury brand, and design is one of the great differentiators."

Lincoln's design is "very modern -- not brash and overstated but refined," he said. Its elements include an open center console with a push button gear shift that enables an expanded storage area, a new interpretation of the split-wing grille first seen on the 1938 Lincoln-Zephyr, and an interior replete with leather and wood. Options include a retractable glass roof.

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