BUSINESS

RACING IN THE STREETS

ROSS LAVER March 21 1994
BUSINESS

RACING IN THE STREETS

ROSS LAVER March 21 1994

RACING IN THE STREETS

BUSINESS

With billions at stake, two Canadian assembly plants go head to head

ROSS LAVER

Ray Husak isn’t used to being at the centre of attention. For the past decade, the Ford Motor Co. of Canada Ltd. assembly plant he manages in Oakville, Ont., has been responsible for building the compact Ford Tempo and its corporate twin, the Mercury Topaz—staid, boxy models that automotive analysts complain are as boring as sliced white bread. But now, those cars are being phased out and Husak’s plant has switched over to making one of this year’s most anticipated and heavily publicized new vehicles: the Windstar minivan. Stylish and remarkably aerodynamic for its size, the Windstar is Ford’s most serious attempt yet to grab a large chunk of the increasingly lucrative minivan market. To gear up for its introduction this month, the plant has boosted employment by 1,100 workers, to 3,500. “There’s a real buzz around here these days,” Husak says in his starkly furnished office upstairs from the factory, 35 km west of Toronto. “In a climate where other companies are shutting down, we’ve got a product that’s creating jobs for Canadians. Now, we just have to make sure that we don’t screw it up.”

Ford’s Oakville assembly workers are not the only ones who are holding their breath until they see whether the Windstar takes off. Three hundred kilometres southwest of Husak’s plant, in the Ontario border city of Windsor, several thousand Chrysler Canada Ltd. employees are monitoring the new minivan’s splashy debut with every bit as much interest—and concern. After all, Chrysler invented the North American

minivan 10 years ago when it introduced the Dodge Caravan and Plymouth Voyager, the first car-like vans with front-wheel-drive that were both spacious and easy to handle. And from the beginning, Chrysler’s Windsor plant has been the primary source of those two vehicles, accounting for 2.7 million of the almost four million Chrysler minivans now on the road. “When you say ‘minivan,’ people automatically think of Chrysler,” boasts Rick Schneider, 43, the muscular, blunt-talking chairman of the Canadian Auto Workers unit at the Windsor factory. “Sure, Ford’s getting all the attention right now. But we’ve always been the market leaders—and we aim to keep it that way.”

Call it the battle of the Canadian-made minivans. More than a contest between competing designs of suburban people-movers, the latest showdown between Ford and Chrysler has sparked a passionate rivalry between two Ontario assembly plants, and by extension the cities in which they are located.

The stakes are enormous. Taking into account the wages and taxes they pay, as well as the value of parts purchased from local suppliers, each plant will contribute more than $1.5 billion this year to the Canadian economy. Better yet, an estimated 90 per cent of what they manufacture will be exported to the United States. Executives of both companies claim to be optimistic that they will reach their production and sales targets: Ford’s Oakville plant is capable of churning out 300,000 Windstars a year, while Chrysler’s Windsor facility, with 5,300 employees working around the clock on three shifts, is aiming to produce a record 350,000 minivans in 1994. But if either company falters, or if the demand for minivans fails to grow as quickly as the two automakers hope, the impact on the surrounding community is bound to be severe. ‘We’re the new kid on the block, trying to cut into an established market,” says Herb Atkins, 51, a 27-year veteran of the Ford assembly line who lives in nearby Etobi-

coke, Ont. “I sure hope it’s a success, because this thing means a lot of jobs to a lot of people.”

Atkins and his fellow workers in Oakville have known tough times before. Since the early 1980s, employment levels at the factory have fluctuated between 1,700 and 3,500. Unpredictable demand for its products was only part of the problem. Another reason was that Oakville was one of two Ford factories responsible for assembling the Tempo and Topaz—the other was in Kansas City, Mo. With so much capacity, Ford often found itself with many more vehicles than it could sell, particularly when the recession took hold in the late 1980s. The result Ford sometimes scaled back its production and laid off a large percentage of its workforce for weeks at a spell.

Even now, many of Ford’s Oakville workers nurse painful memories of those years. The layoffs were bad enough from their perspective, but what made matters worse was the nagging suspicion that their counterparts in Kansas City were being spared the worst effects of the sales slumps. “Some years, the entire plant here was shut down for as many as 12 weeks,” says one senior Oakville employee. “Meanwhile, Kansas

City would be up and running for all but two or three weeks of the year.” During one of those slow periods, in 1992, Ford announced with considerable fanfare that the Chinese government had signed an order for no fewer than 7,000 Tempos. The celebrations in Oakville, however, were short-lived. ‘There was more than a little bitterness here when we found out that every one of those cars was going to be built in Kansas City,” recalled Bill Lloyd, an employee relations manager at the plant.

That history helps to explain why the Windstar is more than a piece of machinery to the people who are responsible for building the new minivan. It is also a potential economic godsend—not least because the Oakville plant is the only Ford factory with a mandate to produce the vehicle. “Bringing the Windstar here has been good for everyone,” says Lori Miller, a supervisor on the assembly line. “With the Tempo and Topaz, there was an awful lot of downtime. But our forecasts now are for steady employment, which is great. And I think everyone’s happy that we’re finally building something new.”

Of course, with any new vehicle there are

teething troubles. In the case of the Windstar, Ford went to unusual lengths to minimize nasty surprises. Two and half years ago, the company put together a team of about 110 assembly-line workers to build prototypes of the minivan in a large hangar-like room off to one side of the main plant. That way, they could suggest design changes and look for ways to make the vehicle easier to build. Among the more than 3,000 recommendations they made, the team came up with a faster, more efficient method of installing the Windstar’s bulky instrument panel. “In the old days,” Lloyd says, “prototypes were usually built by a bunch of guys in Detroit who probably didn’t care that much if something wasn’t quite right. But when you know that in a few months you’re going to have to start assembling 75 of these things an hour, you make dam sure that everything fits.” Despite those precautions, Ford officials acknowledge that the Windstar’s launch has not been entirely trouble-free. As part of its qualitycontrol program, the company recently invited its workers to drive one of the early-production vehicles home for a day, a weekend or even longer. They quickly discovered that the Windstar had an annoying tendency to squeak in extremely cold weather. Engineers traced the u problem to four hockey-puck-sized 1 components that are supposed to

0 ensure that the minivan’s sub-frame 1 does not rub up against the steel I body. Ford promptly shut the entire § factory down for four days early this “ month to give its engineers time to

redesign the defective parts. Meanwhile, the company slapped a freeze on shipments of all its 5,400 Windstars assembled to that point. Each will now have to be retrofitted with the new components—a time-consuming procedure that the company clearly felt it could not avoid. “A few years ago, we might have gone ahead and delivered the defective vehicles to our dealers, then issued a recall,” says Jim Hartford, a Ford spokesman. “But we aren’t taking any chances this time. The vehicle has got to live up to the advance billing.”

So far, at least the reviews have been generally positive. Independent analysts who have driven the Windstar praise its handling, comfort and quiet ride, noting that it offers more room and better safety features than its older stablemates, the rear-wheel-drive Ford Aerostar and front-drive Mercury Villager. But some critics complain that the only available engine, a 3.8litre V-6, is slightly underpowered given the vehicle’s size and weight. (Insiders say that Ford is planning to redesign the engine and boost its horsepower, but the new version may not be ready until the 1996 model year.)

Those concerns aside, most Ford employees

sound confident that the Windstar will be a hit with consumers. “Chrysler has had the run of the market for 10 years now, but they’re in for a surprise,” Atkins said. He added that when he was on his way to a meeting at Ford’s world headquarters in Dearborn, Mich., recently, he stopped off in Windsor to demonstrate the vehicle to two old friends who work for Chrysler. “They were always asking me about the product, so I decided to show it off. I think they were really impressed.”

Over in Windsor, however, the men and women who build the Dodge Caravan and Plymouth Voyager promise to give Ford a run for its money. “I think Ford has done an excellent job of catching up to us, but I’m not so sure that the Windstar is as revolutionary as they’re trying to make out,” says Bob Canniff, 51, who started working in the Chrysler plant as a spot welder in 1966 and has since worked his way up to become plant manager. “Chrysler got it right the first 1983 time—from then on, everybody has been Sources: trying to duplicate our success,” he adds, employing a slogan that is often heard around the Windsor facility.

It is no hollow boast. Over the past decade, virtually every other North American and Japanese automaker has tried in vain to knock Chrysler off its perch. Chrysler still makes almost 50 per cent of the minivans sold in North America—a success rate that helped to rescue the company from the brink of insolvency in

the early 1980s and generated the profits it used to overhaul its entire line of cars and trucks. Unusual for a North American design, the vehicle has also done well across the Atlantic. In 1993, some 30,800 Voyagers were built in Europe by a joint venture between

Chrysler and an Austrian company, SteyrDaimler-Puch. (That is roughly as many vehicles as were sold in Canada that year by Volkswagen and Volvo combined.)

Will the Windstar prove to be the minivan that will finally dislodge Chrysler from its place at the top of the heap? The signals are mixed. Granted, the Voyager and Caravan are beginning to look a bit long in the tooth, despite a major redesign in 1991 and continual refinements

such as dual air bags, a stainless-steel exhaust system and optional child seats that cleverly fold down from the rear-seat back. (All those features will be available on the Windstar, too.) But as Chrysler employees never seem to tire of pointing out, they have 10 years of experience to fall back on—and an owner-loyalty record that is the envy of their competitors. Together with a sister plant in St. Louis, Mo., they also make 22 varieties of the Caravan and Voyager, from the base model at $17,690 all the way up to the $37,140 Town and Country, which features all-wheel-drive, leather seats and other amenities. The Wmdstar, by contrast, is aimed at the middle range of the market, with prices starting at $22,395.

There is little doubt that the Windstar’s launch is keeping some Chrysler executives awake at night. But the company has what many in Windsor are calling a “secret weapon”—a dramatically redesigned third 1993 generation of minivan that is scheduled to go into production in Windsor in 1995. Hoping to steal Ford’s thunder, Chrysler executives in Detroit recently staged a sneak preview for U.S. journalists—on the condition that they would not report what they saw. “Let’s just say there are features in there that are really going to surprise people,” says Othmar Stein, Chrysler Canada’s vice-president of public affairs. “Stay tuned—we’re in for an exciting time.” His counterparts in Oakville would certainly agree. □

1983 1985 1987 1989 1991 Sources: Ford Motor Co. of Canada Ltd. and Chrysler Canada Ltd.