| Ford wanted a piece of the minivan market in the late 1980s, but Chrysler had a head start. | |
| Minivan | 1988 sales |
| Dodge Caravan/Plymouth Voyager | 403,191 |
| Chevrolet Astro/GMC Safari | 190,001 |
| Ford Aerostar | 184,578 |
| Source: Automotive News Data Center | |
A Nissan-Ford partnership - at least for a while
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And sometimes a partnership leads nowhere in the long run.
Such was the case when Ford Motor Co. locked arms with Nissan Motor Co. in 1988 to solve a mutual minivan problem.
Nearly the entire auto industry had a minivan problem in the late 1980s. Consumers wanted them, and the industry didn't have enough of them.
Certainly, there were plenty of vans - plenty of cargo vans and plenty of rugged commercial-sized vehicles that could be converted into recreational vehicles and shuttles. But minivans - the comfortable, smooth-driving, mom-friendly phenomenon of Lee Iaccoca's Chrysler Corp. - were the red-hot commodity and in 1988, still shockingly scarce.
Sometimes unusual problems require unusual solutions.
2 truths
Ford's survey of the situation in 1987 had revealed two truths.
First, even though Ford's Aerostar and Econoline were selling at a healthy clip, the writing was on the wall for new directions in the segment. Some customers wanted a more refined entry. They wanted a front-wheel-drive vehicle - maybe even one that appealed more to female drivers. Men were buying rear-wheel-drive Aerostars. But what of Ford's more female-oriented Lincoln-Mercury brand? Where was Ford's female-oriented minivan? Ford needed a product there in a hurry.
The second truth: To make such a quick product fix - especially considering the $1 billion price tag of engineering and manufacturing a new vehicle - it's nice to have a partner to defray the cost.
A fast-response partnership, a well-engineered vehicle, more like a car than a truck, a product with immediate female appeal and, most important, fwd - in short, what Ford needed was a leg up from the Japanese.
Ford had such a partnership with Mazda Motors Corp. Ford owned 25 percent of Mazda. The two automakers were operating a new factory together in Flat Rock, Mich. The plant gave Mazda dealers the MX-6 and Ford dealers the sporty Probe coupe. Mazda assisted Ford in building the Hermosillo, Mexico, assembly plant, Ford's first stab at building a lean-operating car plant from the ground up.
But without much comment, Ford officials in 1988 announced that Mazda would not be Ford's partner in creating a minivan. Rumors circulated that quality problems at Flat Rock had caused Ford to shun Mazda in favor of a different Japanese partner.
Ford dismissed the story, stating that Mazda simply had declined to participate - this time. Mazda's plate was full with other projects, Ford executives said. Besides, Mazda already had a minivan, the recently introduced MPV.
As if to tantalize Ford product planners, Mazda was touting the MPV as "the first Japanese minivan designed for the U.S. market."
But even Mazda's minivan was rwd. Ford was convinced that fwd was where the market needed to go.
Instead, Ford turned to Nissan.
Nissan engineers in Japan would design and engineer the minivan. Ford would assemble it at a specially constructed $700 million Ford-managed plant in Avon Lake, Ohio.
On Sept. 12, 1988, Philip Benton Jr., Ford Automotive Group president, appeared at Ford's older Ohio Truck Plant, next to the site where Nissan and Ford would build their new minivans. Benton explained the partnership to the plant's rank-and-file workers.
Crossed paths
The partnership, he said, "allows us to join with Nissan, a high-quality Japanese manufacturer, to realize a sort of combination of the best of American and Japanese design, engineering and production methods.
"We believe this program will be beneficial to both companies and will allow us both to continue to build for the future in a way and at a pace that are correct for our companies - which are, after all," Benton added, straying from his printed speech, "quite different."
They may have been different, but they were not strangers. Nissan and Ford had crossed each other's paths for years. Ford and Nissan dealers in Australia had just begun selling rebadged versions of each other's light trucks - Ford dealers selling the Nissan Patrol and Nissan dealers selling the Ford Falcon pickup. And there was talk of other partnerships to come, possibly even a joint SUV project in Europe.
In the late 1970s and early 1980s, as Nissan's sales and fortunes in America soared, Ford suffered a corresponding sales loss. Ford stewed over the Japanese import situation, beating the made-in-America drum, pressing Washington to impose import limits and refusing to do business with Japanese suppliers.
In the midst of that Japan-bashing, Nissan introduced the man who would lead the company to American manufacturing prominence: former Ford production executive Marvin Runyon. He would write the operations book for Nissan Motor Manufacturing Corp. U.S.A. in the late 1970s. He would pick Nissan's first plant site in Smyrna, Tenn., and launch the company's first U.S. production lines. He would lay the groundwork for Nissan to operate a union-free shop in America, much to the consternation of Ford's UAW rank and file.
Ford didn't care for Nissan's nonunion approach to building cars in America. Nissan didn't like Ford throwing its weight around on U.S.-Japanese trade issues.
Exodus to Tennessee
Runyon recruited a roster of other Ford executives to join him at Nissan in Tennessee, many of whom still manage the company's now sprawling and expanding U.S. operations.
Such examples of shifting loyalties and changing fortunes between the Big 3 and the Japanese auto industry went public as the theme of a best-selling 1986 book, David Halberstam's The Reckoning. Rubbing salt into Detroit's already stinging public relations wounds, Halberstam drew a less than flattering portrait of Ford's outlook at the hands of the Japanese. And standing in Halberstam's spotlight, embodying the book's message of what Japan was doing right and what Ford was doing wrong, was Marvin Runyon.
Runyon retired from Nissan in 1988 and was succeeded as CEO by his first lieutenant and fellow Ford alumnus, Jerry Benefield. Only months later, Ford announced its decision to team up with Nissan for a minivan.
Ford would rely on Benefield's Tennessee operations to manufacture and deliver all the body panels for the minivan. And Nissan would expand its capabilities to assemble the engines that would go into the minivans.
Avon Lake would make two minivans - the Villager for Mercury and the Quest for Nissan.
Just as one hand washes the other, both partners of convenience got what they needed in the deal. Ford plugged the hole in its product line. Nissan entered the minivan market in earnest, replacing its own low-selling rwd van.
Ford learned about the traditional Japanese methods of working closely with suppliers through a vehicle's design phase. Nissan learned something about Ford's North American supply chain.
Ford was able to have what essentially was a Japanese engineered, Japanese-quality minivan built by UAW labor. Nissan was able to nod to its UAW critics that it now incorporated union workers in its product line -without actually bringing the UAW into Smyrna.
Mutual respect
And in moments of soft Nissan sales in the years ahead, Benefield was able to keep his Tennessee work force fully employed thanks to the contract to supply panels and engines to Ford, his alma mater, his rival and his customer.
Maybe there was mutual respect there, even if there was no love lost.
As the Avon Lake project took shape in the early 1990s, Ford was busy on a different industry battlefield trying to push its North American suppliers toward higher quality. Ford dubbed this quality drive "Q1."
All suppliers were expected to meet Ford's Q1 standards or risk losing its business. Those that made the grade would be presented with a blue Ford Q1 flag to fly proudly outside their parts factories, right next to the Stars and Stripes.
It occurred to Jerry Benefield that now he, too, was part of that Ford supply chain - gone from Ford's direct employment, perhaps, but still answering to Ford in some way.
A reporter asked Benefield: Would Nissan, like every other Ford parts maker, now have to stand in the Q1 line and comply with Ford's definitions of quality?
The partnership was an important one to both Nissan and Ford, Benefield answered. And, yes, he would have to meet Ford's Q1 demands, just like every other Ford supplier.
But, he added, "I don't think I'll fly the flag."
Less than a decade after Avon Lake's 1992 start-up, the Ford-Nissan partnership was over. By the end of the 1990s, SUVs caught the industry's fancy. Sales had fallen for the aging Quest/Villager products. And by the beginning of the new decade, Nissan had a new parter: Renault. Flush with new investment capital, Nissan embarked on a new design for the Quest, along with a fleet of U.S.-made light trucks, and the $1.5 billion to construct a factory to build the vehicles itself.
You can reach Lindsay Chappell at lchappell@crain.com.
