Six months after arriving at Ford Motor Co. from Boeing Co. in 2006, Alan Mulally had to decide the fate of the Explorer, once America’s top-selling sport utility vehicle.

Ford had just posted a $12.6 billion annual loss, and investors were clamoring for the new chief executive officer to replace such guzzlers as the Explorer with the gas-sipping models that buyers wanted.

Mulally had to think fast after Ford staked the company name as collateral on $23 billion in bank loans. At Boeing, he’d bet that lightweight parts would help the 787 Dreamliner burn 20 percent less fuel than rival airliners. He gave Ford engineers an ultimatum: Put the Explorer on a diet, or it’s dead, Bloomberg Markets magazine reports in its March issue...

“Weight is absolutely critical,” Mulally, 65, says in his 12th-floor office overlooking a factory where Henry Ford built the Model T...

(Ford engineer) Holland had to select from steel that came in different varieties, depending on which elements -- manganese, nickel or chromium -- suppliers mixed in.

For the front bumper, he chose steel laced with boron, which changes steel’s atomic structure so that a piece 15 percent thinner can be as much as four times stronger. Holland used so-called high-strength steel for 60 percent of the Explorer body. The industry average is 15 percent, says Jeff Makarewicz, Toyota’s vice president of materials engineering in North America.

“We’d like to understand more about how Ford is doing this,” he says...

More at: http://www.bloomberg.com/news/2011-02-07/mulally-makes-ford-leader-in-lightness-after-threat-to-terminate-explorer.html


1909 Ad

Ford is returning to its roots: light and strong.

Are they going to return to mags and buzz coils next?

When did they move the Glass House next to Highland Park?

That's what I wondered Luke. That 12th floor must give quite a view!

Ralph,

You are so correct. In many ways Ford is returning to some of the old but still valid ideas. The company is now posting profits and they must be so pleased that they have stayed in business without the benefit of a Government handout.

Another really important way Ford is staying in business is by rationalising the product range. Again, what goes around, comes around. While the return to just one model, as in the days of the T, is unrealistic we certainly have seen the choice heavily reduced. Most of what is left in the Ford range is expected to perform in a world marketplace, not just a regional one.

Another factor I wonder about is assembly. I see ships at the port here in New Zealand, unloading hundreds of finished cars, vans, trucks etc at a time. I do wonder why the economics of assembly close to the point of sale, as pioneered by Ford, no longer apply. Here in New Zealand we once assembled most of our own national fleet, but now there is no assembly whatsoever. Possibly the carbon footprint element may mean a return to localised assembly.

Sustainable fuel sources and fuel prices will also have their say as we look to the future. I would predict the days of the SUV are numbered (Paris is looking to ban them from the city!).

John Stokes
New Zealand

Stop socialism - buy a Ford.

The Ford Motor Company is far from out of the woods.

This is a February 11 2011 Wall Street Journal excerpt from a Jeff Bennett article:

The [Ford] Dearborn, Mich., company borrowed more than $23 billion in 2006, well before the financial crisis hit. The loans helped Ford through a restructuring and the sharp sales downturn at the end of the last decade. But the debt has become a heavy burden, especially after competitors General Motor (NYSE:GM) Co. and Chrysler Group LLC sharply cut their interest expenses after filing for bankruptcy-court protection in 2009.



Ford's total automotive debt at the end of 2009, excluding Ford Motor Credit Co., was $34.3 billion. The auto maker has since taken steps including redemptions and restructuring to pare its debt, leaving it with an automotive debt of $19.1 billion at the end of 2010.

By comparison, General Motors had $8.6 billion in outstanding debt as of Sept. 30. The company hasn't yet reported its earnings for the fourth quarter.

http://online.wsj.com/article/SB10001424052748704132204576136573440339968.html?r u=MKTW&mod=MKTW

I hope this link works if not let me know..Fred

Fred, I'm not sure what conclusion we are to draw from your statements and hyperlink. However, I am proud of the fact that Ford Motor Company prefers to deal with it's financial situation without looking to the general public for handouts. Chrysler is in shambles despite the billions in bailout dollars it received and Government Motors plays a shell game with bailout dollars and their 'supposed' repayment that can be seconded by none. If for absolutely no other reason, I have and will continue to patronize Ford Motor Company because their management has the business fortitude to solve their own problems as opposed to looking toward government to solve their problems for them. A rare commodity in today's world!

Well said Donald.

Surf-side Rick,
your technical mind has always impressed me, but your liberal leanings show that you are not a student of history....Europe has had gas prices far in excess of ours for many years...when I was young and driving, 1943, I put gas in my '39 Ford for 8 gallons for $1, all I could afford at that time, was four gallons for fifty cents...Check the gas prices in Europe for that period...Being a Marine vet of WWII and Korea, I, like you had cause to question the policies of my country, the U.S.A. and became an activist for smaller govt...Apparently, you did not read the whole list of world wide prices or you would discover that Exxon is not the whole cause, nor is our Capitalist government wrong...When the present administation took over GM and gave 17% to the auto union and Canada more than that,my retirement was really harmed as was the future payments for mew retirees....I lost my eye and hearing insurance, which is quite necessary at age 84, and all future retirees will no longer have that coverage at age 65...I've been retired for 29 years because I became a motorcyclist at age 51 and opted for early out and bike and camp...If you want to crusade, take on the highway toll charges....My bike and pop-top cost $12 for the Chesapeake Bridge and Tunnel crossing in 1990, while a 15 passenger Dodge van ahead of me paid $9...And this highway robbery continues to this day...bikers should be rewaarded for saving gas and low weight on roads instead of penalized while we ride in the wind, rain, etc...The reason
the sState Trooper gave me when thay called him to the booth to move me, was that I had three axels, even though two of them were under 6 inches long....When I asked the toll collector to show me the paper that said that, they did not have any charts or info to give me...So I paid and still do as I am very happy to be here and free to talk as I do, and you do too....
PS The van was fully loaded at the time..


Flivver Jack '25

I did my part. Bought a 2011 Explorer last month. One of the best cars I have ever had. My wife will get one next year if she can still drive.

Too bad she will never be able to drive a Model T, but one day hope to give her a ride in one of the 2 I have.

The kids don't hesitate.