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Ford
banks on all-new F-Series |
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As
production begins, experts wonder if carmaker can profit |
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USA
Today |
06/11/03 |
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(Copyright
2003) |
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NORFOLK,
Va. -- Ford Motor Tuesday began building its most important vehicle -- the
all-new 2004 F-Series pickup. Designed
to offer customers as much interior comfort and style as a European sedan,
the only thing the pickup may lack is
enough profit. Ford
sold 814,000 F-Series -- the best-selling vehicle in the USA -- last year.
Wall Street estimates they accounted for about
half of Ford's automotive profit. But
a repeat in 2004 isn't likely. It's costing at least $1,200 a vehicle more to
build the new truck vs. its predecessor, and
few think Ford will be able to sell it for that much more. Ford also will
start selling the F-Series in August in the middle of
the most cutthroat truck price war in the industry's history. ''There
is no question we have to cut cost on the truck. But it's more important that
we get this launch right,'' said Ford CEO Bill
Ford. '' . . . This is the most important model to our turnaround.'' He ruled out cost cutting before the launch
because late engineering
changes led to 12 recalls of Ford Focus. That hurt Ford's quality scores and cost hundreds of
millions in warranty payouts.
The added costs for the F-150 are in five different plush interior designs, a
new 5.4-liter V-8 engine and about 500 additional
pounds of weight for safety and
performance features and space. After
the launch, Ford will try to beat down suppliers on costs, move some parts
production abroad, re-engineer some components
and take out content it hopes customers won't miss. ''But we have to be
careful not to hurt quality or disappoint our
customers,'' says Ford manufacturing chief Roman Krieger. Adding
to the price pressure is discounting by other automakers. General Motors is
discounting its trucks by 20.3%. Dodge is selling
the Ram pickup 17% below sticker price. Even Toyota is discounting its Tundra
by 16%. GM
is using its success in lowering manufacturing costs to inflict as much pain
as possible on Ford and Chrysler Group with its incentives.
''When you are the low-cost manufacturer, you can call the tune to which your
competition dances,'' says David
Cole, director of the Center for
Automotive Research in Ann Arbor, Mich. Given
the pricing pressure from GM, some analysts worry about Ford's ability to
make back its investment on F-Series in a reasonable
time frame, about two years. ''Negative
pricing pressure on Ford is only getting worse as it launches the new truck,
not better,'' says Goldman Sachs' Gary Lapidus.
Ted Lois, 48, of Norfolk, home to one
of three F-Series plants, has been tracking the progress of the new truck on
a Web
site and says he is poised to buy one. ''But there is no way I'd pay sticker
or close to it for a U.S. vehicle. Why should I? I'll
wait until early 2004 for the $3,000 rebate.'' |
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