Getting the new F-150 up and running won't be easy

DETROIT -- These are scary times at Ford Motor Co. as workers rip out the body shop at the company's 2.6-million-square-foot Dearborn, Mich., truck plant and replace it with a radically different one.

By converting its best-selling F-150 pickup from a steel body to aluminum, Ford is replacing the tried-and-true spot-welding process with a far more complex technique that uses a combination of rivets and industrial adhesives.

It's a huge undertaking, loaded with risk, and even with Ford's intense preparations, some wonder if the automaker is overconfident.

"We believe we're ready," said manufacturing whiz Joe Hinrichs, Ford's president of the Americas.

But as AutoPacific analyst Dave Sullivan says: "Nobody's riveted and glued at this speed yet. That's the big unknown."

Ford developed the process when it owned Jaguar Land Rover, which uses a variation of the system to build luxury aluminum-body vehicles such as the Range Rover and Jaguar F-Type in the United Kingdom. But those English factories don't approach the line speeds Ford must hit with its most profitable vehicle -- 60 jobs an hour.

"We really believe in the product and its execution," Hinrichs said in an interview.

At the same time, he admits that Ford has little margin for error.

"There's not a lot of buffer, trust me. Because every day we don't build F-150s means a lot," says Hinrichs. "No one has been given a lot of extra time. We have laid this out hour by hour, day by day. We have all the company's resources at our disposal. There's nothing more important than this."

Ford doesn't disclose how much it makes on every F-150. Some analysts have put the figure as high as $10,000 per F-150, depending on trim level.

Ford has told dealers that the factory will crank out enough F-150s to supply dealers by year end. Retail orders will begin arriving in February, the company told dealers in an August memo.

Ford has struggled with several recent launches -- notably the 2013 Ford Escape, 2013 Ford Fusion and 2013 Lincoln MKZ -- which were much less complex than the massive F-150 changeover. As if the F-150 wasn't enough, Ford is in the middle of the biggest launch year in its history -- 16 vehicles in the United States and 23 worldwide. Among those is the redesigned 2015 Mustang, which started production at the end of August.

Ford has been testing its system by building test bodies for a year at three locations in southeast Michigan. The machinery used in the test builds was disassembled and shipped to the Dearborn plant, where it is being installed. Ford executives have been test driving a fleet of 250 preproduction F-150s.

Some skeptics wonder whether Ford is overconfident.

"The new truck entails a delicate balance of procurement, handling, metal forming, bonding and testing unlike any other product Ford (or any auto manufacturer) has ever produced at this scale," said Adam Jonas of Morgan Stanley in a July note to investors. "This cannot be easy. We expect an on-time launch, but a very slow ramp-up."

Timing is critical. Ford is orchestrating an elaborate industrial ballet in Dearborn involving about 1,100 semitrailers that arrived in late August to begin carting away nearly 300 robots, loads of conveyors and other equipment.

While workers toil away tearing out the spot-welding robots and replacing them with machines that will join bodies with rivets and glue, Ford's Kansas City, Mo., plant will continue cranking out steel-body 2014 F-150s until year end.

Once Dearborn hits its stride, Ford will shut down Kansas City and go through the conversion a second time.

Hinrichs knows the job won't be easy.

"There are really two massive undertakings associated with this: One is the installation of the equipment, debugging it and ramping up to 60 jobs an hour, seven days a week. The other piece is really the supply base coming up and producing these grades of aluminum. They're ramping up very quickly."

Says Dave Sullivan, analyst for AutoPacific Inc.: "Nobody's riveted and glued at this speed yet. That's the big unknown."

Jay Baron, president of the Center for Automotive Research in Ann Arbor, Mich., spent nearly 30 years studying body shops around the world. He says aluminum sheet metal behaves much differently from steel in factory conditions.

"Aluminum is less formable than steel. You can't bend it as much," Baron says. "The window of the process is tighter. Since we're in a high-volume market, we can't slow down the process that much."

He listed several other concerns:

n Spot welding is robust and can work on "dirty steel that has oil on it," but with aluminum, "cleanliness is much more important. They really have to get all the dust off these blanks."

n Unlike steel, aluminum can splinter when stamped. "Those splinters can be an inch or half an inch. You have to get them out of the press before the next part comes."

n Rather than the single process -- spot welding -- used on steel, Ford will be using a variety of ways to join aluminum parts together.

"I wouldn't be surprised if there's 10 to 15 different kinds of rivets," Baron says. "I estimate crudely the cost of joining materials are roughly double the cost of joining a spot-welded vehicle."

Ford has not said how many rivets will be required per vehicle or how many types of rivets will be used in each truck. Land Rover, which developed its aluminum process while it was still owned by Ford, uses 3,722 for each Range Rover. If the number is similar for the F-150, that means Ford would need 2.42 billion rivets per year to assemble 650,000 F-150s. Land Rover produces about 90,000 vehicles per year at its Solihull, England, factory.

Not only must all the rivets be delivered to the proper place along the line, they must be inserted in a perfect mushroom shape and inspected -- all more complex than spot welding.

"The thing about joining is you're trying to make a stiff body," said Baron. "You will get a more stiff body relative to spot welding. It's a better body, but it is more complex.

"Once they get it all debugged, it will be much better quality."

Getting the bugs out is the big question mark for a system that's radically different from the old spot-welding system.

Says Morgan Stanley's Jonas: "We've been told every piece of equipment that touches the body of the car has to be significantly altered.

"On many different levels, it's not just running the aluminum through the same machines. With the increased focus on quality, Ford can't deliver trucks that are anything but perfect."

The complex changeover involving two factories is bound to affect F-150 sales, says Jesse Toprak, chief analyst for Cars.com.

"There's clearly going to be several months before we see optimal sales of F-150. Year-on-year comparisons will look negative through end of the year and into the first quarter."

But Toprak says Ford's timing could be good.

"The full-size truck market has been underperforming. That has a lot to do with small businesses feeling comfortable in the marketplace. Starting in the fourth quarter, we expect to see a revival in the sales of full-size trucks."

Getting all the trim levels into the market could take several months, he adds: "This is as complex of a launch as it gets in terms of the variety, the scale and what it means to the company's bottom line."

Despite the obstacles, Hinrichs remains confident but cautious.

"We're cautious for a reason. We haven't turned the switch on in that body shop yet. Until we do, we won't know exactly where we are."

Richard Truett contributed to this report.