October 28, 2006
New York Times
By Micheline Maynard
DETROIT, Oct. 27 - The Ford Taurus is dead. Long live the Taurus?
This week produced one of those stranger-than-fiction moments in Ford's history: the last Taurus rolled off the assembly line Friday, in the same week that Ford's new chief executive, Alan R. Mulally, said the struggling company needed to transform itself with grand new ambitions - the same kind of ambitions that gave birth to the Taurus, which became the symbol of American automotive renaissance when it first went on sale in 1985.
The storyline is even more ironic, given that Mr. Mulally, as a top executive at Boeing, used the development of the Taurus as an inspirational case study for his team as they overhauled the way that Boeing built planes.
And, in a sense, he is doing the same again. "Ford's on a new plan," Mr. Mulally said last week. "We're in business to create value."
Yet, there is a deflating lesson in the way Ford allowed the Taurus to lose its value after creating a brand that became a legend.
Two decades back, Taurus "was a huge win, not just for Ford, but for the home team," said Karl Brauer, editor in chief of Edmunds.com, which offers car-buying advice. "Here was an American car that was scoring so well with American consumers."
In its 20 years on the market, Ford sold more than seven million Taurus cars, and millions more of its sister model, the Mercury Sable.
While they look almost mundane now, both Taurus and Sable boasted a revolutionary aerodynamic styling at the time. Taurus, in particular, touched a nerve in Americans who had grown tired of square cars whose personality had been drained away as Detroit focused more on meeting fuel economy standards than on bold design.
But Ford - because of later choices on where to put its product development dollars and a redesign that alienated customers - could not keep its appeal alive. So the plant in Atlanta that built the Taurus will close next week, part of the overhaul plan that Ford hopes will reverse one of the worst financial crises in its 103-year history.
Mr. Mulally is trying to focus on the future, and in less than a month on the job has set out a series of goals very close to what Ford tried to do with that original Taurus.
They include trying to captivate the American public with innovative design, streamlining its manufacturing processes and involving the United Automobile Workers union in trying to rally a company brought to its knees by foreign competition and a product lineup that is losing market share for Ford.
The Taurus broke the old mold of car development in Detroit, where designers passed off their ideas to engineers, who threw them over the wall to manufacturing experts, who never talked to the marketing staff. Instead, Taurus got everyone in a room together, creating a new paradigm that companies rushed to copy.
Mr. Mulally was not far behind. In the early 1990s, he borrowed ideas from Team Taurus to develop the Boeing 777 long-range jet. More recently, he also used those lessons to help create the medium-range 787, nicknamed the Dreamliner, which may turn out to be as big a hit for Boeing as the Taurus was for Ford.
But as others started copying Ford, the company grew distracted over the last 10 years - first by efforts to globalize its product development, assigning different sizes of cars to different parts of the world, and then by its efforts to dominate the sport utility market at the expense of cars like the Taurus.
Once consumers began losing interest in S.U.V.s this decade, Ford started losing its dominant hold on the marketplace.
Mr. Mulally, in a memo to employees this month, said he was determined to help Ford "restake our claim as history's best example of a company that enriches the lives of all its stakeholders: investors, customers, dealers, suppliers, employees, our union partners and the countries and communities in which we live."
But analysts said the strategy this time would not be to gamble big on a car like the Taurus - the equivalent of a moon shot. Rather, they said, the company needs a succession of well-thought-out cars that will be profitable at lower sales levels. That very much describes the product strategy that Mr. Mulally put in place for Boeing (in marked contrast to Airbus's big bet on the A380 double-decker plane).
Given the fierce competition and rising market share of foreign companies, Mr. Mulally cannot count on the 400,000 sales per year that the Taurus generated in its heyday.
That spot is already taken by the Toyota Camry, followed closely by the Honda Accord, meaning other automakers must be satisfied with smaller numbers. Instead, Mr. Mulally has to concentrate on lesser but steadier hits rather than a roll of the dice, said John Paul MacDuffie, a professor at the Wharton School of Finance at the University of Pennsylvania.
Ford will have trouble replicating the splash that it made when it introduced the Taurus, which was featured on magazine covers and populated Detroit freeways in its early months. Ford, in fact, sent 100 Taurus cars in a caravan down Jefferson Avenue in downtown Detroit, proudly showing off its new wheels to competitors.
Lately, Ford executives have made much of the Edge, a crossover vehicle that made its debut last week on the streets of San Francisco, where the company invited journalists to drive it and gauge bystanders' response.
On Monday, Ford said it had received 20,000 advance orders for the Edge, but that was just a fraction of the 103,000 advance orders that customers placed in 1985 for the Taurus and its sister car, the Mercury Sable.
Besides the Edge, Ford is introducing a new Super Duty version of its F-series pickup next year, just when G.M. and Toyota will have new trucks. And Ford officials are promising a new iteration of the Mustang each year. But the real muscle in its lineup does not come until later on this decade, when Ford overhauls the basic F-series and plans to introduce a small car.
For now, the Edge takes center stage but it is entering a segment of the market already populated with crossover vehicles, which are essentially sport utilities based on the underpinnings of a car.
It cannot claim to be first to that market - nor can it claim to be directly challenging a small group of Japanese models, as the Taurus did two decades ago when it took on the Toyota Camry and the Honda Accord.
Yet such smaller bets are safer for Mr. Mulally at this point, analysts said, until he instills the kind of discipline, business plan and production processes that he wants the company to follow.
This week, Mr. Mulally said he was actually glad that Ford was not a well-oiled machine. "Can you imagine if we were already lean? It would be terrifying," he said, because that would not allow him any room for improvement.
For its part, the Taurus does offers an example of a mistake that Ford would be wise not to repeat - namely in the way it largely abandoned the car when S.U.V.'s became popular, Professor MacDuffie said.
After a radical redesign in 1996 that failed to catch on with consumers, Ford shifted its resources into developing sport utilities, a move that allowed Camry to grab the top-selling car spot, which it has yielded just once to the Accord.
The latest Camry, introduced this spring, won good reviews for its fresh, modern look and smooth ride at a time when Ford was preparing to put Taurus out to pasture.
"American companies have not been as good at staying focused and keeping consistent," Professor MacDuffie said. "They do tend to jump around to whatever looks like it is going to be the most profitable."
He said he was encouraged that Mr. Mulally was "signaling the need for focus."
"He's shown in his background, not only in the things he's said, that he understands the need for strong products that are strongly manufactured," Professor MacDuffie said. "And the strong products are clearly the ones that are selling well."
That would be encouraging to Ford workers, currently deciding whether they want to accept buyouts and incentives to retire. Mr. Mulally said he understood their trepidation about the future. "It will take a while to go back up again," he said last week.
"It's just like at Boeing, where people said, 'Will you tell us when we'll be halfway done with the movie, so we can go out for popcorn? Can you tell us when we'll all be able to see it?' "
At Ford's Atlanta plant, where the last Taurus rolled off the line at 7:25 a.m. Friday, the local union president, Steve Stephens, said he was encouraging workers to remain upbeat despite the impending shutdown.
"We stood out," Mr. Stephens said. "It's something we're going to tell our grandkids about, that we were part of the evolution in the automotive industry."
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