Ford Needs Thunderbird Launch to Fly
WIXOM, Mich. — Rows and rows of newly minted Ford Thunderbirds stand idle, swathed in protective film and ready for delivery--but going nowhere for now.
Ford Motor Co. hoped a flawless launch of its $40,000 T-Bird would help restore a reputation that has been battered over the last year by troubled model launches and allegations about the safety of its Explorer sport-utility vehicle.
The Thunderbird was due in early summer, but Ford suspended deliveries and was forced to shut down its Wixom Assembly Plant for two weeks after it discovered a defect in an engine cooling system. The company put the plant back online Thursday but said it would not ship the cars until replacement parts arrive.
The launch is underscoring the quality problems that have beset the world’s No. 2 auto maker in recent months and plagued the launch of the three Ford vehicles that preceded it.
The new Thunderbird was meant to evoke memories of one of Ford’s most coveted models, the 1950-era two-seat convertible with an optional hardtop roof and round porthole windows. Ford held itself to exacting standards, hoping a perfect Thunderbird launch would prove it remains one of the industry’s best auto makers.
Instead, only a few cars have been delivered, and Ford is intercepting cars in transit to return them to Wixom to replace a faulty cooling fan unit that caused the engines to overheat.
Analysts say that to Ford’s credit, the company is making every effort to ensure the cars are defect-free when they are delivered. The company has gone to great lengths to prove its commitment to quality.
“It’s an icon car. We want to make sure it’s perfect,†said Jason Vines, Ford’s vice president of communications.
Suppliers Under Heavy Pressure
Since the 1970s, Ford and the rest of the U.S. auto industry have been waging a difficult battle to close the quality gap with foreign companies. Ford, in particular, led the charge by domestic manufacturers to improve quality, but it is now faltering all over again.
“This is clearly a hallmark vehicle, a ‘halo’ vehicle. They absolutely cannot afford any quality issues or glitches on it,†said Joseph Phillippi, a longtime Wall Street auto industry analyst. “It’s absolutely critical that they launch without a hitch. . . . To have it fall on its face at its introduction is a major issue.â€
But it’s hardly the only issue Ford faces. The auto maker is stumbling by virtually every yardstick of automotive success: profit, market share, quality, bonuses, credit rating and public image.
Costly tire replacement programs and lawsuit settlements resulting from the Firestone tire debacle have cost Ford more than $1 billion and wiped out profit in the second quarter. This month, Ford scaled back its profit outlook for this year and said it would cut as many as 5,000 jobs to try to halt the decline in its profitability and market share. This week the company also said it is eliminating bonuses for its 6,000 top white-collar workers.
Ford was forced to halt production of the Thunderbird, begun only last month, to fix the overheating problem.
“It’s unbelievable. They’ve never done something like this--shut down a whole plant--for the sake of quality,†said a worker outside the factory in this town just northwest of Detroit. “Before, they’d just keep making them and then try to fix them later.â€
As recently as the 1980s and early ‘90s, auto makers were notorious for letting defects through and then, if problems arose with consumers, letting warranties take care of them.
That Ford is taking the unprecedented measure with the T-Bird underscores how hard the company is trying to restore its reputation for workmanship. In a recent survey of new-vehicle buyers by J.D. Power & Associates, Ford fell from third place to seventh--or last--in a ranking of the top auto makers’ initial quality.
Quality and reliability are where Ford is concentrating its efforts to boost sales, which have lagged beyond the slip in the overall U.S. market. Ford’s overall volume was down 11.7% in the first seven months of this year, while the overall market dipped 4.8%.
“There’s a renewed intensity on quality at Ford because it’s been an area that’s led to issues of consumer confidence in Ford vehicles,†said Greg Salchow, an automotive analyst with the investment bank Raymond James & Co. in Detroit.
“When you have three, four or five recalls, it creates doubts about the vehicles,†he said, referring to troubled launches of the Ford Focus compact car, Escape compact sport-utility vehicle and redesigned 2002 Explorer mid-size SUV.
Suppliers are under heavy pressure to assure a flawless launch for the Thunderbird.
At a meeting in mid-March, Ford executives met with scores of top suppliers to the M205 program--as the Thunderbird is known internally--for a status report on preparations to build the car.
A Ford participant at the M205 Supplier Quality Standown Process Meeting told at least one supplier Ford executives were embarrassed at cocktail parties because of talk of the auto maker’s problems with vehicle launches--and that his business with Ford could be threatened if the supplier were involved in a T-Bird recall or launch delay.
Attendees were told to pass on the message to their own suppliers, according to a parts maker who was briefed by a supplier in that meeting.
“You have to submit detailed exercises to Ford; we have to document potential problems. That gives the quality-control guys lots of ammo,†the parts maker said on condition of anonymity, because he feared his contracts with Ford might be jeopardized if he were identified. “Even though the program was nerve-racking, it was great. But they didn’t need to [invoke the threat].â€
The meeting was a positive one with suppliers and hardly threatening, said Vines, the Ford communications executive.
“It was not a beat-’em-up meeting; it was bring-’em-up,†he said. “Many of the suppliers were taken down to the line to meet the installers.â€
Evaluation forms filled out by participants expressed moderate to high satisfaction with the program.
“The summary was a great help to understand past failings and prevent actions for the future,†one participant said about the segment of the meeting on lessons learned from the 2002 Explorer launch.
“It made everyone remember what vehicle we are dealing with and made each attendee think about what needs to be done,†another wrote. The unsigned evaluations were provided to The Times by Ford.
Mood Upbeat at Plant
No supplier faces automatic termination of business because of quality glitches, Vines said.
“We have some of the finest relations with suppliers in the industry,†he said. “You don’t get that way by beating them over the head.â€
Ford representatives at headquarters in Dearborn, Mich., won’t identify the supplier behind the Thunderbird stoppage at the plant, a sprawling complex of light-beige buildings with a forest of ventilation tubes extending from its paint shop.
But workers at the factory say the problem component came from Japan.
“The Japanese sent us a bunch of bogus parts,†a worker in a hairnet said through a fence surrounding the facility. “Eight out of 10 were bad; only two were good.â€
A maintenance worker at the plant, in a separate conversation, said he had been told the problem was with a hydraulic cooling system imported from Japan.
A tooling problem caused the fan blades to push insufficient air to cool the engine, and hence the overheating, industry sources told The Times.
Inside the plant, however, the mood is upbeat, Wixom worker Kevin Dodd said.
“I’m glad Ford is doing this; it shows they’re serious about quality,†said Dodd, whose 2002 Explorer was recalled because the rear glass could shatter when the lift gate was shut.
“I went to the dealership and it seemed I was out in two minutes,†he said while catching dinner near the plant this week, adding that he takes pride in Ford’s willingness to fix problems.
Morale is good among Wixom workers, said Tim Lampi, who like Dodd is in materials handling. At a quality meeting last week, he said, personnel were told suppliers and assemblers alike will be held responsible for their work. “That’s what it’s about: accountability,†Lampi said.
Ford Chief Executive Jacques Nasser, under pressure from Wall Street and shareholders, has been distracted by problems resulting from scores of fatal accidents linked to Firestone tires on pre-2002 model Ford Explorers.
He also has been criticized for taking on too many initiatives and having too many executives reporting directly to him. The creation last month of a joint office for Chairman William Clay Ford Jr. and Nasser decentralized power somewhat, but other problems still engulf the auto maker.
The Firestone replacements and lawsuit settlements have cost billions of dollars; productivity is slipping, according to at least one respected industry survey; morale was eroded by an employee evaluation system that became the subject of class-action lawsuits; dealers were incensed by a plan by Ford to buy a number of dealerships; Standard & Poor’s warned that it might lower Ford’s credit rating; and the possibility of a dividend cut looms.
This month Ford advised analysts to reduce their full-year profit forecasts from $1.20 to 70 cents a share, and Thursday Ford’s stock dropped 43 cents to $19.76 a share on the New York Stock Exchange, a 52-week low.
Despite all the downbeat headlines for Ford in the last year, not all the news is bad. Ford had a strong first quarter, the Escape is a hit and the Focus has become the best-selling vehicle in the world.
The redesigned Explorer, with an optional third row of seats and independent rear suspension, has received positive reviews in the automotive press and was rated highest among six non-luxury SUVs evaluated recently by Consumer Reports.
Future Owners Growing Impatient
Many future Thunderbird owners--who are on waiting lists and in some cases have already paid in full--are growing ever more impatient, grousing on Internet bulletin boards that their cars are long overdue.
But that’s OK with Paul Berkman, a Fullerton restaurant owner who has been on his local Ford dealer’s waiting list for more than two years. Though he originally had expected to be driving his new red Thunderbird by the beginning of this month, he said he’s not upset at the delays.
“A lot of buyers wanted it for summer, and now summer is over,†he said. “But I guess it’s smart that they are getting it all fixed before they put it out.â€
“I really want my T-Bird,†Berkman said. “I guess I’d take it even if they delivered it with a seat missing.â€
*
Times staff writer John O’Dell in Los Angeles contributed to this report.
