Phil Martens has been group vice-president of product creation for North America for Ford Motor Co. since Oct. 1, 2003.

Martens oversees the design, engineering and development of all Ford, Lincoln and Mercury cars and light trucks sold in North America. Previously, he was managing director, product planning, design and product development for Mazda Motor Corp.

Martens holds a bachelor's degree in mechanical engineering from Virginia Tech and a master's of business administration from the University of Michigan.

He is married, lives in Ann Arbor, Mich., and has three children.

Vaughan: Ford's doing better now, but you had those terrible years where you lost $6-billion (U.S.)? How do you develop a new line of cars when you can't throw unlimited amounts of money at it? Is there a new way of doing things?

Martens: You have to start from the bottom and work your way up. And I'll tell you, the key thing is you have to work with what you have. And a lot of times when you look at the Ford enterprise, people don't realize the depth of what we've actually got.

Vaughan: Thank you, Mazda!

Martens: Thank you, Mazda. Thank you, Volvo. Thank you to the Europeans. Thank you to a lot of our research groups. You pull it all together and you're able to come out with some exciting stuff and I think our new Lincoln Zephyr [midsize sedan] product is a good example of that.

Vaughan: Let's talk about Lincoln: General Motors spent $2-billion rebuilding the Cadillac product and brand, maybe more. Are you going to spend that much on Lincoln?

Martens: Well, you know I'm not going to tell you how much we're going to actually spend, but what I will tell you is that clearly at Lincoln, we're serious about making Lincoln a very relevant brand. And with the Zephyr, we actually started with the Mazda6 architecture and we evolved it. We developed it into a midsized car family that we're going to be producing here in North America.

Vaughan: Was this approach forced on you because of financial necessity or was this part of a great master plan years ago? Be honest now.

Martens: Well, you know I'd love to say it's part of a great master plan, but I also think it's because I've had the chance to see what the Ford group can offer. I've had the chance to work in Europe and I led [research and development] at Mazda for a while. Back in North America, you really do see what you can bring together.

And I'm not going to kid you. Bringing it together and delivering product like the Ford 500 and the new Lincoln is not easy. Because you do have to get people to accept other people's work.

Vaughan: Then are you a super diplomat?

If you're bringing in platforms from Mazda and from Volvo and telling the guys in Dearborn [Mich.] this is the way it's going to be . . . I mean this isn't Detroit Iron any longer.

Martens: It is not easy. And don't let anybody ever tell you it is easy. You have to get through the 'not-invented-here' objections.

But you have to give people some creative space and you have to let them put their own ideas into some of the final product. You can't mechanically copy everything without giving people the opportunity to say we can make this a little bit better.

You have to play the game as if it is a global game. And when you look at the market place in the United States, it truly is a global marketplace. It's how you actually design, develop and utilize assets globally to design, develop and build in North America. It's a bit of a different spin on it, but that really is how the game is being run and how you have to play it.

Vaughan: Let's talk about fuel economy because I have a bug about diesel cars. Diesel cars are half of the fleet in Europe. Diesel cars are terrific and they save nearly 40 per cent on the cost of fuel. But you don't sell them in North America. Instead of messing with continuously variable transmissions, give us a diesel.

Martens: I love diesels. And when you go to Europe and you drive the diesels there today, they're brilliant. I mean, the work that's gone on is outstanding. The big question here in North America, and everybody's working on it, is the emissions requirements for the 2007 model year which are very strict. And we're working on it for our mid- and large-duty diesels where you really do have a slightly easier time given the size and combustion level of the diesel. Once we get that cracked, I tell you I think the offerings of diesels are going to expand. I think in time it's only natural to start looking at them very seriously for cars.

Michael Vaughan is the co-host with Jeremy Cato of Car/Business, Monday nights at 8:30 p.m. on Report on Business Television. Michael Vaughan Live is on at 8 p.m. Monday to Friday.