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Old 09-29-2003, 03:29   #1 (permalink)
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U.S.A.:Ford ditches plan for new van

Vehicle would have replaced the Econoline and Transit

By Amy Wilson
Automotive News / September 29, 2003

Keeping Econoline

Why Ford won't develop a full-sized van to replace the Econoline in North America and the Transit in Europe

1. Cost of a new program
2. Econoline's strong position in North America
3. Different preferences for engines and transmissions in Europe and North America

DETROIT -- Ford Motor Co. has killed a plan to replace its Econoline and Transit full-sized vans with one new van for North America and Europe.

Ford was studying the new van, code-named V349, for assembly at one of two plants in northeast Ohio, a source familiar with the project says. The company canceled the project just weeks before it served up one of those Ohio plants - Lorain Assembly - as a bargaining chip in the UAW contract negotiations. Lorain is scheduled to close under the new contract.

Ford told suppliers about the new van this year but hadn't sought bids or received final approval for the program, supplier sources say. By mid-August, Ford had scrapped the V349 because of costs and concerns about market acceptance.

"With the money crunch and the position the company is in right now," one source says, "they just didn't want to go that far and invest all that money on the tooling and take a chance on this thing not selling."

Ford officials wouldn't confirm the V349's cancellation. But Ford COO Nick Scheele acknowledged in mid-September that Ford had considered merging its full-sized van programs. The timing is not right, though, he said.

"The Transit and the Econoline are really very different vehicles, although they look appealingly the same," Scheele said. "There is some crossover, but this ain't a slam dunk."

In North America, Ford sells several versions of the rear-drive Econoline, or E-series van, including recreational and commercial versions. Its curb weight tops 6,100 pounds for a 15-passenger version.

The European Transit van also comes in several configurations, with various roof heights and smaller engines. Both front- and rear-drive are offered in the Transit.

Ford sold 165,085 E-series vans in the United States in 2002, up 3.5 percent from 2001. Ford held 49.2 percent of the full-sized van market in 2002. The base sticker price of the 2004 model is $23,060, including the destination charge.

The V349 next-generation van would have been a significant departure from the Econoline, the perennial leader in the North American full-sized van segment. It was to combine attributes of the Econoline and Transit, suppliers say, and would have been produced and sold on both continents.

The new van would have been a unibody vehicle with the option of front-wheel drive, as opposed to the rwd, body-on-frame Econoline. Powertrains were expected to provide better fuel economy than the current Econoline. Though planning was in the early stages, passenger and cargo versions could have hit the market for the 2007 or 2008 model year, sources say.

Even then, Ford likely would have kept some version of the current Econoline in production for a year or two, sources say. The automaker has employed a similar strategy with this year's F-150 replacement by keeping a carryover pickup, dubbed the Heritage model, in its lineup until mid-2004.

Now, Ford will stick with the Econoline in North America.

UAW bargaining chip

Ford intends to close the Lorain plant, with about 1,600 hourly employees, pending ratification of its contract with the UAW. It will consolidate work and remaining employees at its nearby plant in Avon Lake, Ohio.

Ford makes Econoline bodies at Avon Lake and ships them to Lorain for final assembly. Avon Lake, with about 1,700 hourly employees, also makes the Ford Escape SUV.

Now that it has dropped the V349, Ford won't need all the production capacity available at Lorain and Avon Lake. Lorain was a surprise addition to Ford's plant-closing list after the UAW talks. Ford instead had said since January 2002 that it would close its suburban St. Louis assembly plant, its Edison, N.J., assembly plant and two parts plants.

But after appeals from the Missouri governor and the UAW, the St. Louis plant, which has 2,560 hourly workers, was saved while Lorain is slated to close. The state of Missouri's bid included a package of government incentives for the St. Louis plant to stay open.

Not the first attempt

The V349 wasn't Ford's first attempt to merge its U.S. and European vans, and it may not be the last. Scheele, who as a young purchasing executive bought parts for the original 1968 Transit, said the company has explored the combination many times. Some Transits even have been brought to the United States with their labels stripped for testing in commercial delivery fleets.

The van merger will remain on Ford's radar, Scheele said. There are several challenges, though.

American drivers like large, powerful engines, but Europeans prefer small, fuel-efficient engines. The Transit's biggest engine is a 2.4-liter diesel, he said.

Americans prefer automatic transmissions, but the current Transit only has manual and auto shift manual transmissions.


The Econoline is a leader in the U.S. market.

Said Scheele: "The Econoline damn well takes near 50 percent of the segment. You don't play around with those kind of numbers."
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