Big Three Cost Reduction Includes Eliminating Certain Vehicle Features

Autoparts Report, May 22, 2002

Detroit's Big Three are trying to reduce vehicle building costs by removing detail features and using cheaper parts, the Detroit News said. The newspaper said Ford plans to remove a number of features from vehicles starting with 2003 models as part of a widespread campaign to cut product development costs as much as $2.5 billion.

But, the newspaper said, the changes won't affect customer satisfaction or quality as they'll be things like rear ashtrays or storage pockets behind the front seats. The Detroit News said Ford has also told hundreds of engineers to find ways to build vehicles more cheaply without sacrificing performance or durability, and is working with suppliers to lower purchasing costs.

GM's Bob Lutz has also told engineers to remove content and features that customers won't miss but faced a backlash earlier this year after deciding to make anti-lock brakes optional on entry-level cars, the newspaper said. Chrysler will also cut costs by removing previously standard features, such as tachometers on base-model minivans and roof racks on Jeep Grand Cherokees, the Detroit News added. **********

Reduced supplier prices, engineered cost savings and removing expensive features are expected to shave $700 average from the cost of every Ford vehicle produced by 2005, North America group vice-president Jim Padilla told the Detroit News.

The newspaper said that removing features backfired on Ford in 1997 after the company removed items from its popular Taurus sedan and customers instead bought better-equipped Honda Accord and Toyota Camry models. "We are not going to 'decontent' the way we did in the mid-1990s, where it was very visible," Ford vice-president for vehicle programs Phil Martens told the newspaper. Extensive research had shown that items like eight-way adjustable driver's seats and tow hooks were very important to consumers while backseat ashtrays and advanced air purifiers were less important, the Detroit News said.