May 3^rd, 2005

The Fusion at Ford

A new car, borne of a new strategy

"It's going to take us a while to get there," admits Ford Group Vice Pres-ident of North American Operations Jim Padilla. Yet the new Fusion, and its Milan and Zephyr sisters, are a clear indication of the attempt at Ford to fuse its global operations together, while working smarter in differentiating for local markets

Ford's strategy depends on retaining enough of the brand's value to make capitalizing on cars such as the Mustang strategically credible

Mazda6, launched in 2002 and the first of the CD3 cars

For North America this fall comes the Fusion – a midsize sedan with Mercury and Lincoln sisters on a variant of the Mazda6 platform itself set to spawn a total of twelve cars in the coming years. In Europe, incidentally, Fusion badges a rather different type of car: Ford's Fiesta-based entry to Europe's burgeoning multi-activity vehicle (MAV) market, which was first shown at the 2002 L.A. Auto Show and rumored to be coming to America

The Fusion derives from Joe Baker's 2003 Ford 427 Concept, but since Fusion is front-wheel-drive and 427 Concept was rear-wheel-drive, the proportions are somewhat different

2006 Ford Fusion - In an era where fragmentation of the market has become a phenomenon in most every aspect from magazines to cable television, Ford replaces the mainstream Taurus with two cars: the smaller Fusion, and the larger Five Hundred. Fusion is based on the CD3 platform underpinning the Mazda6, with a few mechanical variations and a rather different approach to design

2006 Mercury Milan - shares 90% of its parts (by value) with the Fusion, yet manages a touch of European sophistication - certainly, more so inside in its vertical dashboard layout than the Lincoln Zephyr with which it will share showroom space. Zephyr's dashboard (below) is more traditionally American in that it is horizontal in form. For as much SEAT Leon as there is to the Milan's rear, one might also consider that it seems apt: Mercury wants a Eurocentric appeal. The division talks of progressive style, amounting to vertical, waterfall grilles; HID headlamps that tower slightly above them; LED rear lights, and chrome-ringed analogue clocks, together with suede inserts and satin-aluminum. Mercury's tweaks now have a better chance of succeeding, both due to the better platforms that Ford provides - namely, those of the Escape; Five Hundred, and Fusion - and to the increased clarity of the differentiation itself

2006 Lincoln Zephyr - inside, one of the best dashboards to sit behind in this corner of the market. Real trees went into its production, with wood; leather seats, and chrome-tinged details lending a traditional feel to the satin-nickel-finished console. For more on the Zephyr, see '2006 Lincoln Zephyr Strives for Wider Appeal'

We have been rather enthusiastic about Ford’s prospects of late, most recently in electing the F-150 Pickup Truck of the Bear, 2005 (see 'Getting Better All the Time').

The F-150 may be the nation's best-selling vehicle, but the superlative execution that has followed the current-generation, launched late in 2003, was by no means inevitable. Analysts balked at the level of effort Ford invested, noting the extra $1,200 in costs over the outgoing generation, and perhaps even Ford itself was a touch nervous.

After all, had Henry Ford II himself not once canned the excellent Lincoln Continental because it was expensive to build, preferring not to worry potential shareholders as the company went public in 1956? Was this not the company which once fielded one of the most notorious bean-counters ever, Robert McNamara, whose push to make the Thunderbird a four-seater had fatally pulled the car away from Chevrolet's glamorous, perennially-focused Corvette? Had being forced to follow GM's incentives not depleted Ford's cash reserves enough, without increasing capital expenditure in the hope that the market still valued Ford enough to note and appreciate the results?

Ford's instincts appear to have been right: F-150 customers agreed with the strategy, with 50% opting for the two highest trim levels offered (FX4 and Lariat) at the truck's launch almost two years ago (Ford Tough, David Magee, John Wiley & Sons, 2005).

These days, Wall Street too has reason to agree; the company recently posted earnings of $1.2 billion in the first quarter - this, after losing $980 million as recently as 2002, and as much as $5.45 billion in 2001.

There are still concerns, largely related to whether Ford's focus on profitability is costing market share. "The Ford, Lincoln and Mercury brands finished 2004 with 18.3 percent of the market," remarked Amy Wilson for Automotive News last week. 

"To find a lower annual share figure, you must go back to 1928, when Ford switched production from the Model T to the Model A and ended the year with 15.8 percent of the market" (‘Ford’s share prognosis raises concerns; company says its domestic brands will lose ground in 2005,’ Automotive News, April 27^th, 2005).

We should point out that Wilson also noted an increase in Ford's domestic-brand car share, which climbed to 13.2% this past quarter from 12.8% in the first quarter of 2004.

Ford - whose strategy depends on retaining enough of the brand's value to make capitalizing on cars such as the Mustang strategically credible - remains convinced that tide will be turned in the medium term. "The biggest opportunity for share is going to come when the Fusion and its sister products hit the road," noted chairman and CEO Bill Ford, quoted in the same article.

The Fusion - and sisters Mercury Milan and Lincoln Zephyr - hit the road this fall. We reported on the Zephyr at some length in February (see article), but feel it is important to consider the trio as not only new products, but as evidence that the nature of product development at Ford is changing - and changing, largely, for the better.

We have been vehement in noting that the task which GM Vice Chairman Bob Lutz has ahead of him is the complete revamp of GM's global operations, and not merely the creation of one generation of peripheral, media-pleasing hits. In our view, the key for General Motors is to adapt the global organization to accept and empower people who are able to balance the use of global platforms and parts that are available to them with an understanding of how to adapt these to the local markets their brands serve.

Given this, we find the thoughts of Ford's head of product creation in North America, Phil Martens, encouraging. "You want to win regionally," he admits. "But to succeed, you have to work globally.

"We should take advantage of our global network, and that's what we are doing." (Ford Tough, David Magee, John Wiley & Sons, 2005).

Ford Group Vice President of North American Operations Jim Padilla freely admits to author David Magee, "it's going to take us a while to get there." Of course, such fusion of global operations, fused again with a renewed commitment toward respecting the potential - and potential for differentiation - between each of the brands under Ford's corporate umbrella, will take time.

Yet the Fusion/ Milan/ Zephyr, being based on the Mazda6 platform, are indeed the first products of the new effort. If Lew Veraldi was the Father of the Taurus, then Phil Martens, once managing director of product planning; design, and development at Mazda, is the Father of the Fusion. Author David Magee notes that, "when Martens arrived at Mazda, the company was in the midst of a product drought and, under his leadership, bet the farm, putting four entirely new architectures and frames in place. 

"The result was critical hits with the Mazda6; the RX-8, and the Mazda3" (Ford Tough, David Magee, John Wiley & Sons, 2005).

2.1-inches wider and 3.4-inches longer than the Mazda6, with a 2.1-inch longer wheelbase and improved legroom (which Ford says was tested by designers wearing size-14 shoes), the front-wheel-drive Fusion represents the somewhat more traditional, Ford-ified midsize version of the Mazda’s commendably sporty platform - an architecture dubbed CD3.

CD3 has a better chance of succeeding than did CDW27, the Mondeo/ Contour/ Mystique venture we recently cited in a remembrance of former Ford chairman and CEO Sir Alex J. Trotman, who passed away last week (see here). CDW27 was somewhat ahead of its time, and did not have the organization backing behind it to ensure success, a lack of integration perhaps reflected in the $6 billion that the Mondeo was said to have cost Ford to develop. By contrast, the three newest CD3 sisters have been rumored to run about a sixth of this.

The CD3 platform features equal front and rear tracks; double-wishbone front suspension, and a multi-link at the rear. Weight distribution, as seen on the Mazda6 launched in 2002, has run about 60:40.

For the Fusion and Milan, stabilizers are 16mm at front and rear; Mazda6 runs 23mm and 21mm stabilizers, which - when one considers that stabilizers create roll on a straight, uneven road - again illustrates Ford's emphasis on the mainstream: ride quality over ultimate roadholding.

Ford claims that its latest tweaks have boosted torsional rigidity by 12.7% over the Mazda6, in part due to a roof that is said to be up to 36% stronger than required by U.S. roof crush standards which take effect in 2009. Furthering the more mainstream values of safety, all-wheel-drive is expected to figure for 2007.

When Ford first badged a car, Fusion, back in January 2002 when it showed the Fiesta-based Fusion Concept at the L.A. Auto Show, it talked of the multi-activity vehicle concept as being tough. While that small SUV concept went on to sell in Europe rather than the U.S., our new Fusion sedan also adheres to the tough visual language Group Vice President of Global Design J Mays has envisioned for the Ford brand and, slightly more loosely, to Ford designer Joe Baker’s 2003 Ford 427 Concept, as shown at the North American International Auto Show in Detroit two years ago. J Mays maintains that "Fusion is a closer sibling to the Mustang than anything else in our line-up," even as this is not quite the design that the 427 Concept promised. Baker admits as much, suggesting to Automotive News earlier this year, "the Fusion isn't the production version of the 427.

"It’s a front-wheel-drive car whereas the 427 was a rear-wheel-drive car. But I think they’ve done a really good job of translating it to a front-wheel-drive car." ('Rising star’s work on 427 Concept becomes part of Ford’s new design language,' Automotive News, January 27^th, 2005).

Baker, who is widely credited with both the 427 Concept and Ford's new three-bar grille, has also worked on the 2004 Bronco Concept, and the 2005 Syn^US Concept.

Fusion volume is expected to hit 160,000, annually, suggests Ford car marketing manager Ben Poore  (‘Fusion debuts on Mazda6 platform,’ Automotive News, January 9^th, 2005).

For its part, Mercury wants to move 40,000 '06 Milans annually. Milan shares 90% of its parts (by value) with the Fusion, but the differentiation is enough, Mercury hopes, to credibly lower the average age of its buyers (61 at the close of last year)  ('2005 Chicago: Milan will be most affordable Mercury; awd version planned for '07,' Automotive News, February 8^th, 2005).

Both Fusion and Milan will be available with DOHC engines featuring intake variable camshaft timing - either an undersquare 160hp @ 6,500rpm, 150lb-ft @ 6,250rpm 2.3-liter 4-cylinder used in the Mazda6, or the familiar, oversquare 210hp @ 6,250rpm, 200lb-ft @ 4,750rpm 3.0-liter V6 Duratec, here down on the Mazda6's 220hp @ 6,300rpm, but up slightly on its 192lb-ft @ 5,000rpm. Mazda, it turns out, toys with the heads of the Duratec to achieve the parameters it desires.

Four-cylinder versions will have a five-speed-manual standard; optional, and mandatory with the V6 models, is the new six-speed automatic. Mazda will sell you a five-speed manual with the V6-equipped Mazda6, but makes do with a five-speed automatic as its self-shifting option in the four-cylinder. Both variants offer a rather sporty, low 2.7 turns, lock-to-lock, dropping to 2.5 turns with the optional 17-inch wheels. The Mazda6 makes do with 2.54 turns, no matter the options.

As Automotive News recently reported, Ford’s second-generation hybrid technology will debut in the Fusion and Milan for 2008. These will supplement the Mercury Mariner hybrid expected in the fall, and the Mazda Tribute Hybrid which will arrive in 2007. Chairman and CEO Bill Ford is known to be a hybrid advocate, and remains convinced that the cost of hybrid powertrains will drop over time.

That said, as we noted late last year, Ford is hedging its bets (see article). Where there are hybrids in Ford's strategy, there is also the unbridled performance of the Ford GT and Mustang - performance that is desperately needed in vehicles such as the Five Hundred sedan, no more than adequate with the current, hand-me-down 3.0-liter Duratec. Ford is not talking Fusion curb weights quite yet, but the Mazda6 weighs in at between 3,102 lbs (4-cylinder, 5-speed) and 3,347 lbs (6-cylinder, automatic).

This is where Ford's Special Vehicle Team (SVT) comes in. SVT has been modifying both performance-minded and more mainstream Fords since 1991. "Think of them as very sophisticated corporate hot rodders," suggest authors Patrick C. Paternie and Dan Lyons (Modern American Muscle, Patrick C. Paternie & Dan Lyons, MBI, 2003).

Now under '05 Mustang Chief Engineer Hau Thai-Tang, the division has, according to Martens, expanded to 200 people from 120 ('SVT Boost: Ford sets a 5-model limit; Focus, Fusion among likely candidates).

In recent years, SVT has faded somewhat from view. Thai-Tang promises this will change, as he takes over both SVT from John Coletti and the Advanced Product Creation Group (APC) from Chris Theodore. "We need to do a better job of getting the message out," admits Thai-Tang.

"Our challenge from our CEO (Bill Ford) was to do (the Ford GT) and get it out on time for the centennial. We did that. I think we established credibility internally and externally.

"Now you will see our focus shift back to more affordable cars" (Road & Track, April 2005).

Under Thai-Tang, SVT is likely to get much closer to the product development process of the vehicles it works on, thinking about SVT derivatives from the very beginnings of the base car. SVT may also eventually benefit from a consolidation of all performance-minded engineering at Ford, leaving cars such as Mercury's (now defunct) Marauder to be tuned by SVT, rather than the platform team.

Although Martens has set a five-vehicle limit on SVT ("if you get beyond that, it really gets too expensive... it's difficult to fund and manage the cycle" he told Automotive News), SVT’s impact will be felt far beyond the five models chosen to overtly wear its badge.

The first SVT vehicle, the $40,000 2007 Shelby Cobra GT500, is due in the summer of ’06, to be followed by the Ford Sport Trac Adrenalin. The next cars slated for the SVT badge are not yet announced but, certainly, the Fusion platform makes sense. It is unclear at this point how much SVT had to do with the Mazdaspeed6, but that 274hp, 280lb-ft, 15.6-psi turbocharged 2.3-liter all-wheel-drive car demonstrates what can be done with the CD3. Mazda claims to have pushed the Mazda6's torsional rigidity by approximately 50%, boasting 25% and 37% higher front and rear spring rates, respectively, and 24mm and 23mm stabilizer bars.

Ford 427 Concept designer Joe Baker notes of the three-bar grille he penned, "I wanted to create something that could kind of be pushed and pulled in either direction and still remain essentially the same thing" ('Rising star’s work on 427 Concept becomes part of Ford’s new design language,' Automotive News, January 27^th, 2005).

Similarly, Ford has stretched itself globally in an effort to return to the basics of its brands, and of the design; engineering, and manufacturing industry in which it plays. Quite unlike the vertical integration of both former chairman and CEO Henry Ford II (at times) and of former CEO Jac Nasser, the new way of doing business focuses on the core product, while horizontally integrating the company's departments. This fusion not only has the potential to create better products (much as Lew Veraldi did with the Taurus twenty years ago in a far more localized organizational revolution), but it may well safeguard against stretching some brands beyond recognition. As author David Magee points out, sharing parts between a Ford and a Mazda is one thing; between a Jaguar and a Ford, quite another.

Gradually, Ford appears to be moving toward an understanding of this, while at the same time taking full advantage of its reach as a global company. The results will be interesting to watch.