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Old 01-05-2003, 22:11   #1 (permalink)
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Exclusive Report: Ford Rebuilds America's Truck

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.
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Old 01-05-2003, 22:16   #2 (permalink)
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Old 01-05-2003, 22:18   #4 (permalink)
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Charles V. Tines / The Detroit News

Andy Backy of Roush Racing, hired by Ford to assemble F-150 prototypes, inspects the interior of the new pickup's luxury version. The exterior redesign, below, includes large Blue Oval badges on the front and rear.
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Old 01-06-2003, 08:47   #5 (permalink)
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Trucks lure new breed of buyers

To satisfy multiple tastes, Ford offers five styles of F-150

By Mark Truby / The Detroit News
Morris Richardson II / The Detroit News

DEARBORN -- For years, the American pickup truck had a simple job description: work hard and look tough.

Those qualities were enough to satisfy James Arnold, 58, of Fort Worth, Texas, whose excavation business uses a small fleet of pickup trucks.

But Arnold's needs have changed in recent years. While his crew still needs basic no-frills work trucks, he recently bought himself a top-of-the-line pickup with leather seats. And on weekends, he now joyrides in his F-150 Lightning -- a hot rod pickup with a supercharged engine once reserved for sports cars.

As Ford began redesigning the 2004 F-150 -- which debuts today at the North American International Auto Show and goes on sale this summer -- buyers like Arnold only hinted at the profound changes in the truck market.

The pickup truck market -- the third-biggest light vehicle segment behind small and mid-size cars -- has expanded dramatically and now caters to host of individual tastes and preferences.

"The truck market has become even more varied than the passenger car market," said George Peterson, head of AutoPacific, a Los Angeles-based automotive research firm.

Take, for example, Shari Wheeler of Gibraltar, who calls her 1998 F-150 a "bad-ass man's truck." She's one of a growing number of women choosing pickups over minivans for shuttling kids and routine shopping trips to Costco.

Then there are the many affluent buyers who are eschewing a Lexus or Lincoln for a $35,000 luxury pickup. And don't forget the twentysomethings who rarely haul anything heavier than a backpack but love the rugged curb appeal of a truck.

In creating the new F-150, Ford searched for a way to satisfy all of the permutations of the modern truck buyer. The result -- the creation of five distinct versions of the F-150 -- could give Ford an edge in one of the most profitable segments of the U.S. auto market.


Lifestyles studied


Three years ago, Ford marketing experts embarked on a study of truck buyers, beginning with its own massive stable of customers. Thousands of trucks owners filled out lengthy surveys.

Researchers studied the lifestyles and behaviors of truck buyers, culling clues about their dreams, aspirations and motivations.

"It was a very large undertaking," said Jeff Marentic, Ford's F-150 marketing manager. "We were trying to establish the emotional and functional requirements of truck buyers."

It was no secret that today's pickup trucks have to be more than reliable workhorses. Nearly 70 percent of pickup owners buy trucks for mainly personal use, according to J.D. Power and Associates. Thirty years ago, four out of five pickups were used primarily for work.

In the same vein, two-thirds of all full-size pickups sold last year had extended cabs or super cabs with seating for up to six passengers, compared with about 50 percent just six years ago.

Ford researchers drilled deeper, looking for a clearer picture within this kaleidoscope of tastes and needs. What they found is that truck buyers fall into a handful of specific categories -- from blue collar owners who use their truck as a work tool, to young, mostly single adults who want an inexpensive but cool-looking pickup for a date, to wealthy professionals and business owners who consider a decked-out truck a reward for achievement.

Kirby Burden of Rockwall, Texas, plans to purchase a new F-150 in the next year or so, but only if he can find one that's within his budget.

"I would like to have a four-door truck, but anything near $30,000 kind of puts me out," said the 31-year-old father of one. "I have a long commute to work, over 30 miles, so gas mileage is becoming a concern. And I don't really haul much, except for trips to Home Depot."


Designers get data


Market researchers passed their data and conclusions onto designers and engineers, who started drawing up plans for an F-150 that could connect with all the key buyers groups.

"The traditional approach in the automobile business is building three versions -- good, better and best -- the Sears catalog paradigm," said Chris Theodore, Ford's head of North American engineering. "We had to break through that paradigm and think ahead."

Designers used the market research to inform their choices, but didn't allow the data to overtake the creative process. Designing vehicles isn't an exact science. Consumers tend to be fickle and rarely can predict what they will want in the future.

"We have to lead the customers. We are living five years ahead of them," said Pat Schiavone, head of Ford's truck design studio. "They don't know exactly where they will be in five years."

Engineers adopted a "Mr. Potato Head" approach, creating a basic truck that could serve as a foundation for a variety of looks and packages. Designers created three distinct interiors with different instrument panels and a variety of dashboard materials.

A new center console and a floor-mounted gear shifter were modeled for higher-end trucks. Less expensive models will carry the traditional steering column-mounted shifter and bench seating.

"Our main goal was to design a vehicle with modularity and flexibility that allows buyers to plug and play and get what they want," said Ford design chief J Mays.

"We wanted to create a spectrum of possibilities from the guy who's an electrician with the base model, right up to the guy from Houston who wants to be driving a luxury truck when he takes his girlfriend line-dancing."


Five basic versions


Ford settled on five basic versions of the new F-150, up from the current three. They include:

F-150 XL. In the Ford lexicon, the XL is called the "workhorse." The target customer needs towing and hauling capability, tends to be family oriented and enjoys outdoor activities such as hunting and fishing. Ford extended the F-150's regular cab to allow storage of toolboxes, five-gallon paint buckets and even golf clubs without impeding three-across seating.

F-150 STX. This truck is aimed squarely at what Ford calls the "want the image, but can't afford it" or "young and cheap" crowd. The STX exterior was designed for sportiness, with painted bumpers, cast aluminum wheels and two beams running horizontally and vertically through its trapezoid-shaped grill. The STX comes standards with the smaller of Ford's two V-8 engine options, the 4.6-liter Triton. "These buyers are looking for something cool, that makes a statement," Marentic said. "They are trying to establish their image."

F-150 XLT. The XLT -- the "family carrier" -- is expected to continue as the best-selling version of the F-150. It's available with a supercab or a larger supercrew cabin. "The XLT owners want to use the truck for work and still be able to clean it up and go to Denny's for a family dinner," Scott said. Second-row power windows and an overhead storage system are available. Ford's revamped 5.4-liter V-8 engine is optional. An XLT supercab with a shorter 51/2-foot pickup box was designed for families who want to stow their truck in the garage.

F-150 FX-4. Designers pictured the typical FX-4 buyer as a single male who wants a king-of-the-road image -- the kind of guy who wears wraparound sunglasses and wants his truck to make a statement. The FX-4 offers a sportier appearance enhanced by large wheels and a four-wheel drive system.

F-150 Lariat. Ford's most premium offering, the Lariat features a vaguely Teutonic interior of leather, wood-grain and satin nickel effects. Buyers can purchase a DVD player to go with the in-dash message center, heated side mirrors and adjustable foot pedals. Engineers went to great lengths to reduce the noise and vibration that creeps into the Lariat's cabin. "You have a plumber who has driven a lot of workhorses but now wants a truck with amenities of a Lincoln," Marentic said. "This is the person who has arrived and wants to treat himself to the pinnacle of truck luxury."

While prices won't be announced for several months, analysts say Ford will be pressured by rivals to hold the line on any price hikes.


Experts hail lineup


Ford's five-flavors approach is winning plaudits from automotive marketing experts.

"It's dead-nuts on target for the marketplace," said Jim Hall, an analyst for AutoPacific Inc.

Independent researcher Art Spinella said Ford is wise to cater to the needs of truck buyers. While nearly 70 percent of Ford truck buyers still buy another Ford truck, the automaker can no longer afford to rely on owner loyalty, Spinella said.

"What Ford has done is important and necessary," said Spinella, vice president of CNW Marketing/Research Inc. in Bandon, Ore. "We are seeing less and less loyalty in the full-size truck market.

"Two years ago, they were complacent and assumed that because they were selling Ford trucks they could just keep raking in the money. The market is too competitive now for that."

One note of caution came from James Bulin, a marketing expert and a retired Ford researcher who played a crucial role in the creation of the current hugely successful F-150.

Now head of The Bulin Group in Northville, Bulin authored a study on the tastes and values of six generations of Americans that led Ford to design the F-150 with a softer-looking appearance and a raft of family-friendly features.

Bulin wonders if Ford went a little too far in changing the truck's personality and appearance.

"If you are in step with the customer, you don't want to risk getting out of step," he said. "The new truck is very different from the current version, so there's a risk."

Ford designers saw more risk in standing pat.

"You don't want to be in the studio thinking, 'What if we blow it?' You have to trust your instincts," Schiavone said.


F-150 shines in Texas


To find out if truck buyers would respond to the new F-150, there was only one place to go. This fall, Ford market researchers loaded the shiny prototype F-150s on a carrier and went to Texas, the heart of the U.S. truck market.

The Lone Star state is to trucks what New York and Milan are to fashion. If a truck isn't embraced by Texans, then it's likely to fail. Ford, in fact, sells 20 percent of its full-size trucks in Texas and Oklahoma.

In a Dallas showroom, Ford lined up the new F-150 beside several of its competitors from Chevy, Dodge and Toyota and invited a few hundred truck aficionados to give their impressions.

"The response was incredible," Scott said. "It was the most positive reaction we've ever had."

Theodore, the engineering chief, summed up the reaction in a word: "Gangbusters." He then added a few more words that a more superstitious car executive might not have uttered.

"If ever there was a sure thing," he said, "this truck is a sure thing."
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