I strongly recommend reading this story. ?It will help you understand a bit more on why Ford, despite having the number one selling Explorer and number one selling F-150 is having so many financial problems.
Basically it comes down to this. ?Back in 1997 when Ford did the last F-150 and Chevy was working on the current Silverado (Silverado gets an upgrade in 2003 and the F-150 in 2004) Chevrolet set off to find ways to reduce production costs while Ford set off to find new features to add. ?Among things Ford over-engineered include power folding third row seats (which is advertised) and power fold assist steps (also advertised). ?Although these gee whiz bang technology is really cool, it
a) ?Doesn't help sell vehicles (ask Vice-Chair Lutz about this one)
b) ?Adds a new level of production complexity
c) ?Requires a lot of wiring and plumbing
d) ?Adds production complexity and cost
When the 1999 Silverado came out Chevy reduced their manufacturing costs on the 1500/2500 by over $2,000 per unit! ?Ford increased their costs by $700 per unit. ?So Chevrolet has been able to offer $2,000 and $2,500 rebates on the Silverado (and GMC truck rebates too) and not lost a single penny of profit over a 1999 model when times were better. ?Ford has to match to keep up - but they can't, so they lose a boat load of money on each sale.
Further the story behind the new 2003 models coming out is a different one too. ?In the case of the new Silverado/GMC the complexity has been reduced even further dropping manufactuing costs down more. ?Even better for Chevy, the complaints of cheap materials and switch gear is being addressed in the 2003 upgrade - why, because they had the margin to spend their without raising production costs.
Ford on the other hand is described as almost in panic on the F-150 release later in the year. ?The story paints Ford executives finding any way to cut costs on the bloated over engineered truck to stay competitive.
Again - it's a great read...
Auto Week story
Basically it comes down to this. ?Back in 1997 when Ford did the last F-150 and Chevy was working on the current Silverado (Silverado gets an upgrade in 2003 and the F-150 in 2004) Chevrolet set off to find ways to reduce production costs while Ford set off to find new features to add. ?Among things Ford over-engineered include power folding third row seats (which is advertised) and power fold assist steps (also advertised). ?Although these gee whiz bang technology is really cool, it
a) ?Doesn't help sell vehicles (ask Vice-Chair Lutz about this one)
b) ?Adds a new level of production complexity
c) ?Requires a lot of wiring and plumbing
d) ?Adds production complexity and cost
When the 1999 Silverado came out Chevy reduced their manufacturing costs on the 1500/2500 by over $2,000 per unit! ?Ford increased their costs by $700 per unit. ?So Chevrolet has been able to offer $2,000 and $2,500 rebates on the Silverado (and GMC truck rebates too) and not lost a single penny of profit over a 1999 model when times were better. ?Ford has to match to keep up - but they can't, so they lose a boat load of money on each sale.
Further the story behind the new 2003 models coming out is a different one too. ?In the case of the new Silverado/GMC the complexity has been reduced even further dropping manufactuing costs down more. ?Even better for Chevy, the complaints of cheap materials and switch gear is being addressed in the 2003 upgrade - why, because they had the margin to spend their without raising production costs.
Ford on the other hand is described as almost in panic on the F-150 release later in the year. ?The story paints Ford executives finding any way to cut costs on the bloated over engineered truck to stay competitive.
Again - it's a great read...
Auto Week story
to reduce costs so much.