One of Ford Motor Co.’s strategies to overtake rivals is to reduce the weight of its lineup. CEO Alan Mulally said that coming up with lightweight vehicles is the foundation of the carmaker’s plan to comply with stricter fuel and safety regulations without having to let go of the pickups and SUVs where most of its profits come from.
It was in 2006 that Mulally joined Ford from Boeing Co. He was immediately tasked with deciding the fate of the Explorer, which had once been the top-selling sport utility vehicle in the US.
Mulally felt the pressure as at the time, Ford had just reported a $12.6 billion annual loss, and investors wanted the new CEO to replace the Explorer and its other guzzlers with models that had better fuel economy ratings. In addition, Mulally had to act quickly as Ford had staked the company name as collateral on $23 billion in bank loans.
During his stint in Boeing, Mulally had emphasized that the 787 Dreamliner would use up 20% less fuel than rival airliners by installing lightweight parts. It’s no wonder then that Mulally gave Ford engineers an ultimatum to “put the Explorer on a diet, or it's dead.”
In an interview in Ford’s domed-shaped showroom in its Dearborn, Mich., design studio, Derrick Kuzak, Ford's product development chief, said that Mulally asked them to “truly reinvent the Explorer.”
In early 2009, Kuzak had made a request for $400 million to start production of the Explorer that his team had spent two years overhauling. Instead of starting his pitch with profits or costs, Kuzak claimed that he had found how to shave off nearly 100 pounds (45 kilograms) from the 4,450-pound total weight, achieve 24% better gas mileage; but at the same time, make the vehicle longer and wider and keep its off-road performance.
This pitch so impressed Mulally, who was with 15 executives in the Thunderbird Room at Ford's Dearborn headquarters, that he didn’t hesitate to give Kuzak the cash to begin production in a renovated Chicago assembly plant. [via autonews - sub. required]