Ford counts on little things in cost-cutting

August 23, 2002

BY JIM MATEJA Chicago Tribune/KRT

Somewhere along the way, used cars became predriven and standard equipment made optional became decontenting.

General Motors said it will decontent about 14 base 2003 model cars by making anti-lock brakes optional rather than standard. That means it can advertise a lower price to attract folks from Japanese rivals that offer ABS as optional.

At Ford Motor Co.'s recent preview of its 2003 lineup, executives treated questions about decontenting with caution.

"We don't call it decontenting, we call it right contenting," said Chris Theodore, vice president of North American product development.

"We'll remove manual lumbar seat support from some base models, but keep power lumbar support in our uplevel models," he said.

"While the others are doing wholesale stripping, we're doing just a little. We're not doing ABS, for example," said Allan Gilmour, Ford's chief financial officer.

In some cases, an item or two that was standard in '02 will be optional for '03, Theodore said, though not elaborating other than on lumbar support.

But, Theodore said, Ford's goal of reducing vehicle costs by $700 per unit in the next five years will focus on engineering expense out of items you don't see rather than deleting equipment that you do.

Dave Marinaro, director of value engineering, provided a number of examples of how Ford will get to its $700 goal:

* Replacing the foam strips in headliners on the Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car with a lighter-weight plastic beginning in December. On these three vehicles alone the savings will be $4 million annually, with more to be realized because the plastic liner will be recyclable. The application is pending in other Ford vehicles.

* Changing the Backup Aid Radar Sensor offered in those cars (that beeps when backing up to close to an object) from two low-cost ultrasonic sensors and one high-cost radar sensor to four ultrasonic sensors and no radar sensor for a savings of $4.4 million annually beginning in December.

* Using lighter-weight plastic in floor consoles in all vehicles to save $1.5 million annually, starting in November.

* Molding a plastic hinge into the glove box lid to replace the separate metal hinge. Earmarked for the compact '03 Ford Escape/Mazda Tribute, midsize Ford Explorer/Mercury Mountaineer and full-size Ford Expedition/Lincoln Navigator SUVs, it will save $2 million annually.

* Replacing pins and bolts used to fasten fixed side door, windshield and rear window glass to the body with a urethane adhesive beginning with the '03 Windstar, Escape, Focus and Mustang for a savings of $15 million annually, with more vehicles targeted for the treatment later.

"You don't have to have as much decontenting when you do this," Theodore said.

Theodore said Ford learned its lesson in fiddling with content, recalling that the automaker attempted to remove standard equipment in the mid-'90s to lower the price and attract more buyers.

"Wrong! Customers pounded us," Theodore recalled.

"For example, we took the key pad off the doors of our cars, the one with the numbers you'd press to unlock the doors without having to use the keys," he said.

"Golfers went nuts. They told us they wanted to lock the keys in the car so they wouldn't have to carry them in their pocket while playing."

Despite the cost-cutting target, Ford will add content to some cars and raise the price.

"We're putting $8 more into the Taurus interior by replacing some of the black plastic trim with woodgrain trim. If the customer perceives better value for the money, he or she is willing to pay for it; and they'll see more than $8 worth of value in the woodgrain trim."

Golfers won't mind.