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Stacy94PGT · 01-05-2003, 22:11

Sunday, January 5, 2003
By Mark Truby / The Detroit News
Charles V. Tines / The Detroit News

ABOUT THIS SERIES
Today: Ford is redesigning its top-selling model -- the F-150 pickup -- at a critical juncture as the automaker strives to lower costs and boost quality. The F-150 represents Ford's biggest opportunity to recover from its financial slump.

Monday: Ford is betting future pickup buyers will want to choose from among five versions of the F-150. It's a risky strategy that required Ford to lavish extra features on a truck that isn't expected to cost more because of brutal competition.

DEARBORN -- Bearing down a straightaway on Ford Motor Co.'s test track, Frank Davis is pushing the next-generation F-150 pickup truck to the limit.

The V-8 engine roars as the truck surges past 80 mph.

A moment later, he hits the brakes, bringing the 5,000-pound behemoth to an abrupt halt on the rainy pavement. After abusing the truck's suspension on a series of bone-jarring road surfaces, the veteran engineer stops to explain just what is at stake here.

"Redesigning this truck is a once-in-a-lifetime opportunity," he says. "It has to be perfect."

Ford has spent three years and $1.8 billion remaking the F-150, which bows Monday at the North American International Auto Show and hits showrooms this summer. Anything short of perfection could stall the automaker's attempt to claw its way back to prosperity.

Ford's F-Series full-size pickup is the world's best-selling vehicle, with buyers taking home more than 800,000 in each of the past five years. It accounts for a quarter of Ford's U.S. sales and half of its profits, analysts say.

No consumer product -- not Dell computers nor Sony TVs -- can match its $20 billion in annual sales. On its own, F-Series would be a Fortune 100 company.

Staying on top won't be easy. Chevrolet, GMC, Dodge and Toyota have rolled out new full-size pickups and have gained market share in the segment in recent years. Nissan Motor Co. joins the fray this year.

Engineers revamped nearly every aspect of the F-150 -- sculpting a tougher-looking exterior and crafting stylish new cabins. But progress was costly.

The 2004 F-150 will be about 500 pounds heavier than the current model, which could diminish fuel economy and performance gains. And analysts estimate the F-150 will cost $1,000 more per per truck to build -- or $800 million per year -- than its predecessor.

The money will be well spent if Ford reaches its lofty goal of selling 1 million F-Series pickups a year by 2005.

"The F-Series is our heart and soul," said Sam Pack, a high-volume Dallas dealer. "We can't afford to jeopardize it in any form or fashion. We have to get it right."

Daunting task

In 1999, as Ford engineers and designers first began drawing up plans for the new F-150, they faced a most daunting proposition: improving upon blockbuster success. Such high expectations court failure. Think New Coke or "Star Wars: Episode I -- The Phantom Menace."

Or, closer to home, consider the ill-fated 1997 redesign of the top-selling Taurus midsize car. The new Taurus and its oval-shaped curves turned off buyers, and the Toyota Camry and Honda Accord took over as America's new favorite sedans.

The current F-150 truck sports a soft-shouldered look that some believe doesn't square with its "Built Ford Tough" image. It nevertheless clicked with baby boomers and shattered sales records.

At the same time, though, the Dodge Ram, with its menacing big rig profile, and Ford's own rough-hewn Super Duty F-Series lineup generated brisk business.

Then-newly hired Ford design chief J Mays, the creative force behind the new Beetle and Audi TT while at Volkswagen AG , wrestled with how far to take the 2004 F-150.

"Everything was up for grabs at that point," Mays said. "There's a faction within the company that believes if the current vehicle has any flaw, it's that it might be too nice. We were listening very carefully. And you really have to listen carefully in this company to get the truth out of people."

Mays felt the Ram design was trendy instead of authentically tough -- a poser of sorts.

Ford designers came up with a new pickup that effectively split the difference -- not too nice, nor cartoonishly tough. The design featured a larger, more upright grill, geometric lines, a bulging hood to connote engine power, and large 9-inch Blue Oval badges on the front and rear.

"We couldn't be scared of walking away from the current truck too much," said Pat Schiavone, Ford's top truck designer.

The interior was equally crucial. Today's upscale truck buyers want all the creature comforts absent from the austere cabins of the past.

Ford learned that lesson from the success of the special-edition King Ranch F-150, with cushy brown leather bucket seats reminiscent of a Rawlings catcher's mitt.

For the high-end F-150 Lariat version, designers fashioned a cabin of beige leather, wood grain and brushed aluminum. The gear shifter, traditionally mounted on the steering column, was moved to a large center console for certain high-end models.

For less expensive versions, two more interiors were designed. That meant three different instrument panels and three distinct dashboards.

"You shouldn't have the same interior as the landscaper when you own the company," Schiavone said.

Exclusive feature

The design team was just getting started. Small rear-swinging access doors were added to the regular cab version. Now every 2004 F-150 will have four doors of one size or another. Both the regular cab and the supercab were extended 4 inches.

Still, Ford searched for a "killer application," an exclusive feature that would leave the competition behind. The answer was an imaginative overhead storage system devised in collaboration with supplier Johnson Controls Inc.

With the so-called rail system, owners can personalize their cabin with snap-on modules such as DVD players, tool kits, first aid kits and two-way radio holders.

Designers were thrilled with the passel of new features.

But Ford's cadre of accountants, determined to keep costs from skyrocketing, was concerned.

In the cavernous Tough Truck design studio in the basement of Ford's product development center, designers often butted heads with finance staffers.

"Those guys will sell their grandmothers for five cents," Schiavone said jokingly. "We had to duke it out."

Clipboards were thrown in frustration. During one intense dispute, security was called to the design studio.

"My life would be a lot easier if I didn't didn't fight over these things," said Jim Smithbauer, F-150 design director for appearance and craftsmanship. "I love this truck too much to just say, 'Yeah, whatever.' "

The designers won many of the battles. A few were lost. In most cases, the two sides compromised. The F-150 will come standard with 17-inch wheels compared to the 16-inch rims on the current model. The design team, though, wanted to go even bigger. Plans to place a small Ford blue oval badge on the passenger side of the dash board were scrapped to lower costs.

And imitation wood grain will be used in lieu of real walnut in the interiors.

"As much as we don't like to talk about money, it's a big cost for real wood," Schiavone said. "At some point, though, we would like to see it with real wood because there's a legitimacy there we would like to have in this truck."

Performance hurdles

In Ford's truck engineering labs, where the chassis and frame of the new F-150 was developed, a similarly grueling process was under way.

The new F-150 had to be quieter, drive smoother and handle better than its predecessor. It had to be able to accelerate faster, pull heavier loads and brake quicker.

The engineers weighed decisions they would have to live with throughout the truck's seven-year life cycle.

"Any time you are redesigning a vehicle this successful, it gives you pause to think, 'Are we doing the right thing?' " said Frank Davis, the F-150's chief engineer. "Is there risk? Yeah, there's risk."

Ford constructed a new frame nine times stiffer than the current truck's backbone. A frame that twists and bends leads to shaky handling and cabin noise.

On the rear suspension, engineers broke with tradition and moved the shocks outside the frame, closer to the wheels, to provide better stability on turns and lane changes.

Engineers scrapped the time-tested, recirculating-ball steering system in favor of a rack-and-pinion setup for better response and precision. Larger brakes were designed for better stopping power.

The powertrain team, meanwhile, developed an updated 5.4-liter, three-valve V-8 engine that puts out 300 horsepower and 365 foot pounds of torque. The engine's added power and twist were crucial for Ford to prevent buyers from fleeing to Chevy's and Dodge's horsepower-laden trucks.

Rigging the F-150 to pass tough crash standards and other safety regulations proved to be a tall task. The breakthrough came when Ford crash-test experts designed high-strength steel reinforcements that will be bolted to the frame behind the front wheels.

The myriad changes, Ford engineers vow, made possible a pickup truck that can handle heavy-duty chores without sacrificing a smooth, quiet ride or passenger safety.

One problem: The modifications added significant weight to an already heavy vehicle. The added heft -- about 500 pounds, depending on factors such as engine size and bed length -- won't completely offset performance and fuel economy gains Ford achieved with the truck.

Nevertheless, a senior Ford executive said engineers are searching for ways to cut weight out of the truck in future model years.

Added cost

A bigger problem facing Ford is the price of building the new F-150 with all of its added features. Analysts estimate it will cost $1,000 more per truck to produce than the current model, a figure Ford hasn't disputed. Over a full year's production, the added cost amounts to about $800 million that won't go toward Ford's bottom line.

"We certainly have some cost issues in the vehicle," said Steve Lyons, president of Ford division.

By comparison, when General Motors Corp. redesigned its large pickup trucks in 1999, it cut its per-unit production costs by approximately $2,000.

Lyons said he believes high demand for the new 2004 F-150 will allow dealers to sell the truck without heavy incentives in the short term. And Ford already has started an intensive program to lower the cost of building the F-150 in future model years.

Analysts aren't as optimistic that Ford can maintain healthy profit margins in an environment of ever-increasing rebates.

"The problem is Honda and Toyota, as well as GM, are taking 20 percent of their cost out when they redesign models, and these guys aren't," Prudential Securities' Michael Bruynesteyn said. "This is bad news."

Added Saul Rubin of UBS Warburg: "They missed the opportunity to pull cost out of the vehicle. That's the fact of the matter. It's going to be very challenging for them."

Crucial launch

As production approaches, an army of engineers are sweating over the massive launch of the new F-150 starting next summer at three separate North American assembly plants.

"The F-Series launch next year is a huge one for us," Ford Chairman and CEO William Clay Ford Jr. told The Detroit News.

Ford has suffered a number of botched and delayed vehicle launches in recent years, many because of late engineering changes, poor planning or subpar quality. Bill Ford and Chief Operating Officer Nick Scheele have demanded frequent progress reports from the front lines of the F-150 team.

The early reports have been encouraging. Engineers are putting prototypes of the new F-150 through a harrowing boot camp at the Ford Truck Proving Grounds in Yucca, Ariz. In a desert where summer temperatures reach 120 degrees, the trucks are driven for hours and days on end and subjected to a series of obstacles with nicknames like Mudbath, Twist Ditch and Power Hop Hill.

"The prototypes have been the best we have ever built," said Chris Theodore, Ford's vice president and head of North American product development. "We have to make sure we can deliver the toughness we promise."

The sheer scale of the launch invites problems.

And with the F-150 program under a microscope, even minor delays, quality glitches or safety recalls could be devastating.

"You can't help but to be sucked into the launch," said Matt Demars, head of Ford's truck engineering group. "It puts huge pressure across the system."

Ford will initially retool its truck factories in Norfolk, Va., and Kansas City, Mo., to begin building F-150s this summer. The new Dearborn truck plant at the Rouge complex will go on line a year later. To keep dealer stock levels high, the Oakville, Ontario, truck plant will continue churning out the current F-150 through the summer of 2004.

"This is maybe the biggest launch in our history," Lyons said.

Doubts erased

The problems and potential pitfalls have done nothing to dampen enthusiasm within Ford about the new F-150.

Nearly everyone involved in developing the new truck -- from engineers to designers to executives -- believe they have an unqualified hit on their hands.

Any doubts that may have lingered were erased on a hot September day in Las Vegas when more than 1,000 Ford dealers gathered to see the new F-150 for the first time.

In a glittering ballroom at the Mandalay Bay casino, full-size fiberglass F-150 mockups rolled 30 feet overhead on an elaborate rail system suspended from the ceiling. When the new truck was unveiled, dealers jumped to their feet and applauded.

Even the most hardened and skeptical dealers congratulated Ford executives and gushed over the pickup they would be selling in less than a year.

"Everybody went wild," said Jerry Reynolds, a Garland, Texas-based dealer who sells more F-Series trucks than any other Ford retailer in the nation. "I have never ever seen a reaction like from the Ford dealers. We all looked at each other and said, 'This is going to sell like hotcakes.' "

For the sake of Ford, a company traveling the creaky footbridge between success and failure, it better.