Ford 'better idea' launched with fanfare and high hopes
Metuchen, N.J. — With a pep rally atmosphere, Ford Motor Company rolled the first Escort and Mercury Lynx off its assembly plant here, about 45 minutes west of New York City.
Politicians took bows; union leaders talked about the importance of Americans building cars; and even the jet set, Anne and Charlotte Ford, basked under the glare of the television cameras.
The high-caliber cheerleading, represented by the presence of Secretary of Transportation Neil E. Goldschmidt, New Jersey Sens. Bill Bradley and Harrison A. Williams Jr., New Jersey Gov. Brendan T. Byrne, New York Gov. Hugh L. Carey, and half a dozen congressmen, symbolized the importance of the new cars to Ford.
For beneath all the hoopla is a Ford Motor Company loss this year which some analysts estimate will be more than $1.5 billion. At the same time, the company has seen its share of the market shrink from about 24 percent in 1977 to about 18 percent today.
"If these cars don't sell," said Andrew Budris, a worker at the plant, "we're finished." But another worker, Matthew Bryer, said he was confident Ford won't have any trouble selling them. "Everyone I talk to says he'd buy one," he proclaimed.
In fact, even Governor Carey, who used his helicopter to get to the ceremony, said he would buy one, if he could find a Ford dealer in New York State who would make a deal with him.
The attractiveness of the new cars stems from their 30-mile-a-gallon gas mileage in city driving and 45 m.p.g. rating for the highway. The two new cars have front-wheel drive and independent front-wheel suspension. Ford also has 34 new patents either pending or granted on the new cars.
Once Ford gets the cars off the assembly line and accepted by the consumer, it has plans to develop further the front-wheel-drive concept. Philip Caldwell, chairman and chief executive officer of Ford, noted here that "during the next few years we will introduce eight new front-wheel-drive car lines -- beginning next spring with a new two-seater sports coupe incorporating the magic of the 1955 thunderbird and the mass appeal and affordability of the 1965 Mustang."
Six months later, Ford will introduce other versions of the Escort and Lynx, including a car that will have the look of a four-door sedan but the function of a station wagon.
By 1985, Mr. Caldwell said, the company expects to see its 1985 corporate-average fuel economy exceed 30 miles per gallon.
Ford spent about $65 million to renovate, expand, and retool the Metuchen assembly plant. The plant, which employs 3,200 workers, was manufacturing Pintos and Mercury Bobcats at the same time the renovation work was being done. Other Ford assembly plants involved in the production of the world car include the Batavia, Ohio, transmission plant; the Dearborn, Mich., engine plant; the Wayne, Mich., assembly plant; and the St. Thomas, Ontario, assembly plant.
Initial production of the world car is projected at 200,000 units, with a maximum production of 250,000 if they are accepted by the consumer. Outside the United States, some 450,000 of the new cars will be produced.
At the same time that Ford was making a lot of noise about the world car and how it would "meet the challenge of the imports," Ford executives disclosed they are continuing talks with Toyota Motor company about the possible joint production of automobiles in the US. Ford officials are hopeful that the Japanese involvement in a new production facility would save the Japanese money as well as retooling and design time. Ford hopes to work out an agreement before the end of the year.
Harvey Heinbach, a securities analyst with Merrill Lynch, Pierce, Fenner & Smith Inc., says he thinks a Ford-Toyota agreement could help the US company.
"If suitable terms could be arranged," the analyst says, "Ford might find it advantageous from the standpoint of capital needs to fill some holes in its product line with foreign products, as its competitors are doing." At the moment , he notes, the Japanese are talking about small production -- 20,000 cars per year -- while Ford is thinking in terms of 200,000 units.
The political importance of the United Automobile Workers was underscored at the plant ceremony by the comments of the political dignitaries. both governors told the auto workers about the importance of political support in reindustrializing America, and Transportation Secretary Goldshmidt said that Washington "will not accept the unemployment of auto workers." When President Carter's name was mentioned, however, the workers booed.One auto worker commented that "the politicians only come here looking for votes."
One of the politicians, Senator Bradley, got buttonholed by one of the workers who had a specific complaint: 40 percent of his paycheck disappeared in taxes, he said. "You got something against the workingman?" the worker asked the senator, who only shook his head and listened.