Putting The Explorer Under The Microscope
America's best-selling sport-utility vehicle, the Ford Explorer, went into a skid last fall as a federal investigation of faulty Firestone tires prompted even more troubling questions about whether the Explorer itself was unsafe. Although Ford Motor Co. vigorously defended the SUV's safety record, sales dropped 18% in the fourth quarter. Yet as the bad publicity swirled, Ford dealers could take heart knowing that a much-improved Explorer was soon to be launched. The new model--the first complete overhaul since the Explorer's debut in 1990--would be far more stable and offer a host of new safety features, including rollover protection.
So how come three months after the redesigned Explorer began rolling off the assembly line, not a single one of the 5,000 built so far has landed in dealer showrooms? Instead, they're parked outside factories in St. Louis and Louisville while Ford engineers pore over them looking for defects. As eager as Ford execs are to erase the stigma of the Firestone crisis and fight off a torrent of new competition with the redesigned Explorer, the company cannot afford another launch marred by quality problems and subsequent recalls.
For a company whose mantra is "customer satisfaction," the past year has been admittedly disastrous. Ford's new compact car, the Focus, has been recalled four times in its first year, while its new SUV, the Escape, on sale only since September, has been recalled five times. "If you look at our launch performance, I am totally pissed off with it," Ford Chief Executive Jacques A. Nasser told analysts on Jan. 11. Rather than take any chances of a repeat, Nasser has ordered factory managers to hold off on shipping new Explorers until engineers have caught any problems.
It's an expensive way to run a company. The defects and resulting production delays cost Ford a bundle in lost profits over the past year. "Pick a number. It's over $1 billion," Nasser told the analysts. But Ford executives say the cost of fixing warranty claims later would be far higher. And in the case of the Explorer, Ford says, risks of having glitches pop up in customers' driveways are untenable. "Clearly, we are under the microscope because of the Firestone issue," says Gurminder S. Bedi, Ford's vice-president for North American truck operations. "Our integrity's on the line."
SWITCH GLITCH. Like every auto maker, Ford tests prototype components throughout the two- or three-year development process. While parts passed these initial inspections, Ford executives admit they were more concerned with getting the vehicles out to dealers than scrutinizing how components would work together after the car left the factory. Now, Ford has pulled 100 Explorers aside to put them through months of round-the-clock road tests under intense driving conditions to uncover defects.
The auto maker found plenty. Most were only irritants, like rust on a tow-hitch. But other problems had the potential to lead to big-time safety recalls, such as an internal steering-column switch that would have enabled motorists to start the engine in the "drive" position. Tracking down the root cause gets tricky since many components are now put together by suppliers at their own facilities from parts made by many smaller vendors. In the case of the steering-column switch, the problem was traced to a supplier using too much solder on a $1 circuit board. "When you get to the bottom of it, they are that trivial," says Bedi of such glitches. "But when you let them escape, they're just huge." And hugely embarrassing for a company trying to rebuild its reputation.