Join Date: Feb 2001
Location: The Hills of North Georgia,USA
Ford may scale back plans for redesigned F-150
Ford may scale back plans for redesigned F-150 pickup in cost-cutting effort
By MARY CONNELLY
DETROIT - Burdened by billions of dollars in losses last year, Ford Motor Co. is trying to remove costs and content from the redesigned Ford F-150 pickup, which goes on sale in 2003.
"We will examine every facet of the vehicle. The content we can take a look at. There will be some things that we can do,'' said Jim Padilla, group vice president of Ford North America.
Ford's engineers are scrambling because vehicles such as the 2004 F-150 - designed in an era of prosperity - are arriving with content and assembly complexity that the automaker no longer can afford. In fact, Ford's product development costs are rising, Padilla said, even as the company tries to erase losses.
Ford is reviewing the content of every future model as it tries to slash an average of $700 per unit from U.S. vehicle costs by mid-decade, Padilla said.
The redesigned 2003 Ford Expedition and Lincoln Navigator, which went on sale this spring, are examples of Ford Motor's high-cost dilemma. The Navigator offers an optional power-activated running board. Both models boast an optional power switch that folds the third row seat flat, and redesigned interiors are more luxurious.
"In programs in the concept phase, prior to approval, we are doing a proctoscopic analysis of what is going into those vehicles - what we can afford to do, and what we think the market will bear,'' Padilla said. "Every week, we spend about an hour and a half as a team going through the specific recommendations by product line and by commodity as to what we can do and how fast we can do it.''
Michael Bruynesteyn, auto analyst with Prudential Securities, said General Motors will have the upper hand against Ford in the full-sized pickup segment because of Ford's open-handed spending on the updated F series.
"(Ford) management stated to us that the cost on the new F series will exceed the current model,'' Bruynesteyn said in a written report. "This is in sharp contrast to the 1999 redesign of the GM large pickups, which reduced costs by approximately $2,000 per unit, allowing GM much of its freedom to offer incentives of over $2,200 on its GMC Sierra/Chevrolet Silverado without dramatically lowering profitability vs. the prior generation.''
Ford cannot appreciably raise the price of its full-sized pickups because of segment competition, Bruynesteyn said. But the automaker likely will need incentives on the new model to maintain sales volumes, he said.
"This is a distinct possibility given GM's demonstrated willingness to spend to defend share, Chrysler's likely weak position by that time on the Dodge Ram, and the prospect of new competition from Nissan and Toyota,'' Bruynesteyn said.
In the full-sized pickup market, Ford is locked with General Motors in a hot sales battle.
Both automakers claimed bragging rights at the end of 2001. The F-150 won the crown as the best-selling light vehicle in the United States. But combined sales of the Silverado and Sierra made GM the top company in full-sized pickup sales for the first time since 1995.
The F series is critical to Ford's profitability. In 2001, the F series represented 23 percent of Ford Motor's U.S. sales volume. F-series sales totaled 911,597 units last year.
The F-series total includes SuperDuty versions. The SuperDuty redesign will follow the F-150 redesign.
In the first quarter of this year, Ford's North American operations reported a $430 million loss, compared with a profit of $754 million a year earlier.
Padilla did not specify what changes are being considered for the F-150. Any changes will be weighed against the risk to vehicle quality and launch timing, he said.
"The new F-150 is in the execution phase," Padilla said. "We're very heavy into the prototype stage. The last thing you want to do is complete your prototypes and then change everything. You've got to be very careful."
Ford has not updated the F-150 since a 1997 model-year redesign. The interior and the exterior are being restyled, and the chassis and suspension are being re-engineered.
GM, on the other hand, redesigned the Silverado and Sierra in the 1999 model year and plans upgrades this fall. The 2003 Silverado and Sierra will be restyled from the A-pillar forward to further differentiate the models. The models will have new interiors and engineering upgrades.
At the 2002 North American International Auto Show in Detroit, Ford used the F-350 Tonka concept truck to showcase the interior and exterior direction of its updated F series. A more rugged exterior wraps around an interior designed to convey "tough luxury,'' the company said. Oversized switches and chrome accents on gauges are meant to evoke the look and feel of upscale tools, Ford Motor said.
"This truck hints strongly at the next-generation F series and the shape it will take," J Mays, Ford vice president of design, said in January. The interior will become "a staple of Ford trucks in the future," he said.
On future product programs, Ford will try to achieve its targeted average savings of $700 per unit, in part by using more carryover parts from the model's previous generation, Padilla said.
Ford is in the process of overhauling several high-volume models for the 2005 and 2006 model years, including the Ford Ranger, Taurus and Focus.
"Many of our programs have had just too much content change,'' Padilla said. "That takes with it more investment, more engineering cost. And every time you change a part, there is equal opportunity to raise the cost of that part. There is also a risk factor relative to the quality.''
The percentage of carryover parts will vary by model. But Padilla described a "norm of about 50 percent.'' Ford is targeting parts and subsystems "transparent'' to the customer, he said.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....