DEARBORN, Mich. -- The early retirement of the man who headed the team that created the new Ford Thunderbird has focused attention on some pressing product development problems inside Ford Motor Co.
Tony Kuchta, 58, left the company May 31. And last week, after 32 years at Ford, he was toasted at a sell-out retirement party.
But his program was also the subject of some critical attention from Ford's senior management. Earlier this year, after the Thunderbird Super Coupe picked up Motor Trend magazine's Car of the Year award, the Thunderbird/Cougar team was summoned to a meeting with four top officers.
At the meeting the Ford brass chastised the team for overshooting targets on costs and weight. The session also carried a message for rest of Ford's product development troops: If you sign on to meet a target, you'd better meet it.
Insiders say at the meeting was led by Vice Chairman Harold Poling and also included Chairman Donald Petersen, Executive Vice President Philip E. Benton Jr. and Max Jorsek, Ford's vice president of car product development. It was not the first sign that all was not well with the program.
The development process exposed a range of weaknesses, including gaps in tracking costs, a shortage of manpower, surprise quotes from suppliers, and confusion over the project's mission. The magnitude of the cost overruns, Kuchita said, wasn't realized until less than a year before Jan. 1.
Some of the problems aren't exclusive to this program. As the Thunderbird/Cougar wind up their first model year on the market, the company is conducting an internal study to find out why product development targets are missed.
There is some feeling within Ford that Kuchta's departure was linked to senior management's displeasure with the program. Others say there was no connection, that after 32 years in Ford engineering trenches on three continents, Kuchta -- a father of eight and grandfather of nine -- had earned the right to call it quits.
Kuchta says it was his idea. "I asked to retire," he said in a telephone interview. "I wasn't asked to."
Despite the program's troubles, Kuchta is bullish about Ford, the Thunderbird and Cougar, and the company's new approach to product development. Many of the problems his team faced have been resolved, he said. Others have been identified and will be settled in future programs.
Kuchta believes the troubles stemmed in large part from a system that was trying to adapt to that new way of developing cars. As the first all-new cars launched after that change (the 1988 Continental was derived from the Taurus/Sable, the Thunderbird and Cougar were destined to shoulder some growing pains, Kuchta said.
The issues at hand -- primarily cost and weight -- are critical. Unexpected development costs aren't necessarily reflected in the price of the car, Kuchta said. But they bear directly on profits. The Thunderbird and Cougar, though designated as niche products, are important players in Ford's lineup. In 1987, for example, they accounted for 20 percent of Ford's North American automotive profits.
Weight is a concern primarily because of its impact on fuel economy ratings -- an increasingly important issue. The naturally aspired versions fell a bit short of the fuel economy target, Kuchta said. The supercharged entries -- the Thunderbird Super Coupe and Cougar XR7 -- met their goals. The base Thunderbird/Cougar carries an EPA rating of 19 mpg in the city, 27 mpg highway; the Super Coupe and XR7 with an automatic transmission gets 19 mpg in the city and 23 highway.
Ford's hopes for the series were reflected in the fact that the $ 1 billion program, developed under the code name MN12, received an all-new platform. According to Kuchta, it was the first time in Ford's history that a specialty car wasn't built off an existing base. The MN12 platform is expected to carry future specialty models, such as the Mark VII successor.
The car was concieved in traditional product development channels. The planning started in 1984. But in March 1986, shortly after the launch of the Taurus/Sable, Ford adopted the system, called car programs management, across its product-development network. Kuchta, who had been associated with the program as chief engineer of advanced engineering and technology, was named head of midsize specialty programs, one of five product groups created then.
The system, pioneered at Ford by the team that developed the Taurus/Sable, essentially puts a single group in chrage of a car's development, from start to finish, from concept to customer.
The varied Ford departments with a stake in the product -- design, engineering, manufacturing and others -- worked through the core team. That is seen as an improvement on the old system, where one group would do its job and then pass the prodcut on to a subsequent group. Cars tended to lose their original mission in the process.
The transition to the new system helped improve the development time, Kuchta said. In the contrast, the Taurus/Sable and Continental were late. Issues that would have delayed the process in the past were resolved quickly under a group whose sole focus was the production schedule.
"We had some organizations that were fantastic," Kuchta said. "Other organizations weren't as successful. As you change from one system to another in a very large company, it's difficult to expect that there aren't going to be problems. It would be like trying to change the Pentagon to a new system."
Cost control was one of the troublesome areas. When Kuchta realized the extent of the overruns it was early 1988, he said, 10 months before the scheduled October start of production.
At the point he was faced with a choice. He could have tried to carve more cost out of the car before launch. But that strategy would have delayed Job 1 and extended the changeover shutdown of the Lorain, Ohio, assembly plant, where the cars are built.
The alternative was to build the car on schedule and chart a plan to go after the costs later. Kuchta opted for that approach.
Today he counts the program a success because it was built on time and, he said, it surpassed the quality of the old models.
"Certainly there was pressure on me because of the costs," he said.
Kuchta said some of the problems can be traced to the staff reductions over the past decade. Cuts on some areas were to deep, he said. As a result, some things that should have been done weren't.
Some Ford insiders point to flaws in the communication system. Executive Vice President Benton, in a recent interview, said there are checks and balances -- and Ford missed some of them.
One prominent area was supplier costs. Ford chose some of its suppliers early in the program. They did preliminary development work and developed prototypes.
But when it was time to quote prices, Kuchta said, Ford was often taken by surprise. Now Ford tells suppliers of cost goals earlier.
The weight problem had its roots in a variety of areas, Kuchta said.
The car was intended to be heavier than the GM models in the same segment: Pontiac Grand Prix, Oldsmobile Cutlass Supreme and Buick Regal. Ford's models are rear drive; GM's are front driven. The Thunderbird and Cougar have a longer wheelbase than the predecessor, which helped free up space for passengers.
The weight issue came to light less than two years before Job 1, when Ford began weighing prototypes. As with the cost concerns, Kuchta decided that the problems would have to be resolved later. As a result, there is a firm schedule to cut cost and weight from the Thunderbird and Cougar each year into the early 1990s.
"I'm a firm believer that you have to have stability at Job 1. You cannot be doing things on cost and weight (late in the program). That creates problems for the customer."
The cars were designed to be heavier and cost more than the GM cars, Kuchta said. But by overshooting the targets, they moved even further away from the GM models. The standard MN12 models weigh about 400 pounds more than their GM competitors.
Benton also discussed the issue.
"Our message has been that, first and foremost, we are to produce a high-quality product," he said. "That doesn't mean we can afford to move product from a market we had been serving and have to add $ 1,000 to the cost of that product, and therefore abandon what the customers want."
Some insiders have found the comparisons to GM puzzling when, during the development, the team was aiming for the BMW class.
"Maybe we compared it to the wrong car," concedes one member of the MN12 team. "But while we may have stepped a little bit out of the segment, we've got a product people appreciate and will pay the extra dollar for."
Kuchta admitted that the comparisons to BMW have caused some confusion.
Under its "best in class" system, Ford used more than 350 features in other cars -- many from prestigious German makes -- as targets for the Thunderbirds and Cougar.
Some interpreted that to mean that Ford would attempt to build a BMW at the cost of a Thunderbird.
Kuchta said that's not the way to look at it. Ford can set its sights on high quality, but it must make trade-offs to do it at an affordable cost.
"The objective is to keep the plant full," he said. "BMW is a great car, but it's not a car that's going to sell 300,000 units a year."
The sales record to date shows that the Thunderbird and Cougar won't repeat the sell-out performances of the Taurus, Continental and other recent Ford launches.
Through May, Thunderbird sales were nearly 6 percent below year-ago levels while Cougar sliped nearly 9 percent.
But total industry sales have been weak. And for much of the year Ford has been without the supercharged models that were expected to account for about 25 percent of Thunderbird volume and about 12 percent of Cougar.
That shortage stemmed from a decision made late in the program to change from a cast crankshaft to a forged one. Kuchta said management supported that move and never criticized the delay.