TOWN CAR ODYSSEY : In the redesign of its consummately American luxury sedan, Lincoln turned to Japan and Europe for help.

In the early fall of 1985, Nick Zeniuk, a product planner at the Ford Motor Co., climbed behind the wheel of a new 1986 Cadillac DeVille, which Ford had obtained just ahead of the public introduction for inspection by its engineers.

As he drove away from Ford’s drab, low-slung car product development offices here, Zeniuk smiled. The new DeVille, the Lincoln Town Car’s most direct competitor, was too small. It was terrible, in fact, and Zeniuk was convinced of what that meant for Ford.

It meant that Ford project FN36, the 1990 Town Car, which he had been pushing hard up through the reluctant bureaucracy, was finally going to be approved.

Four years later, Nick Zeniuk and his close friend Glen Lyall, now co-managers of the 125-member FN36 project team, watched from the end of the assembly line at Ford’s sprawling Wixom, Mich., plant as the first of their newly redesigned 1990 Town Car luxury sedans crept across the factory floor.

As the first car rolled off the line just behind a huge, celebratory car-shaped cake, Zeniuk and Lyall shook hands. Not only had they brought Ford’s largest model in on time, but they felt sure that they had met the company’s quality targets as well. With the 1990 Town Car, introduced to the public on Thursday, Zeniuk, Lyall and their team were apparently able to approach the quality levels of the best of Germany and Japan.

“We stood there and grinned,” recalls Lyall. So, finally, they are breathing a collective sigh of relief.

Because they know how close this car came to never being built. They know how hard top management tried to kill the Town Car. They know how Ford executives very nearly followed General Motors’ disastrous “downsizing” strategy of the mid-1980s and how close Ford came to pulling out of the lucrative big car market.

And they know that, once the last-minute go-ahead was given, Ford had to scramble in desperation for help from Europe and Japan to develop this most American of cars in time for this fall’s introduction.

This is the story of how it came together, a rare, behind-the-scenes glimpse at what goes into the development of a new car at a major American auto company.

In particular, it is the story of how the 1990 Town Car, on a budget of $650 million, was transformed from a concept into a car faster than any other model in the modern history of Ford Motor.

Developed in just 41 months because of unusually stringent deadline pressures facing Ford’s engineers, the Town Car showed Ford how fast its people could move when pushed, an important lesson in a world in which the Japanese always seem to be moving a little quicker. The Town Car’s engineers, who cut 13 months off Ford’s normal development cycle, have even produced a video to explain to top management how they built a car faster than some of the Japanese. Ford clearly hopes to apply much of what it learned here on its future cars and trucks.

But the development of the new Town Car also provides an intriguing glimpse at how today’s Detroit must work with the Japanese, as well as the Europeans, and how the Big Three have become thoroughly interwoven into a much larger international automotive industry. Now, even the biggest domestic cars--including land yachts like the Town Car--are built with help from all over the globe.

When Zeniuk test-drove that DeVille, he was in charge of strategic planning for Ford’s large, rear-wheel-drive luxury models. But at the time, Zeniuk was at loose ends. Ford was planning to kill those cars, which would have made Zeniuk little more than a caretaker.

Ford’s top executives, still scarred by the Iranian oil embargo and Ford’s financial crisis of the early 1980s, saw those boxy boats as remnants of the auto maker’s bloated past.

“There was a substantial number of management people who felt all the large cars should disappear,” recalls Lou Ross, until recently executive vice president of Ford’s North American automotive operations and now head of Ford’s international car business.

As early as 1980, in fact, Ford’s product planning committee, the powerful group of 16 top executives that meets twice a year to plot which cars and trucks will be built by the nation’s second largest auto maker, had dropped the Town Car from Ford’s “cycle plan,” the company’s confidential master schedule for product development for the coming decade.

Fuel Efficiency Scare

Even though it was one of Ford’s more profitable models and held sway over a loyal customer base, Ford was willing to let the car die a slow death. Ford would continue selling Town Cars as long as enough people were buying them, but it wasn’t going to pour any more of its dwindling cash reserves into modernizing the car. In 1980--just one year after the Town Car had been redesigned--the cycle planners were already figuring that the car would be finished within two or three years, a victim of rising gas prices and America’s new trend toward smaller, more fuel-efficient models.

“We were all thinking gas would cost $2.50 a gallon by 1989,” notes Ross Roberts, Lincoln-Mercury’s general manager. “Regardless of how loyal your customers are, you’ve got to wonder what they will do when they have to pay that much for gas.”

At the time, of course, Ford was also a much different company than it is today. Gripped by a horrendous sales slump brought on by soaring interest rates, tough Japanese competition and skyrocketing gasoline prices, Ford in 1980 was in the midst of the most serious crisis in its post-War history. While Chrysler’s federal bailout was grabbing headlines, Ford was on the verge of bankruptcy; it lost $1.5 billion in 1980, its worst financial performance.

To survive, Ford’s leaders were slashing and burning their way through the company, eliminating jobs and cutting costs. While Ford insisted in its 1980 annual report that its problems were not reducing “the scope of Ford’s worldwide plans for future products,” the Town Car wasn’t being considered, in large part because the auto maker had to devote its scarce resources to more important programs. Ford officials say they were about to “bet the company” on the $3-billion Taurus-Sable program. Something had to give.

In place of the Town Car and other traditional rear-wheel-drive luxury cars, Ford in 1980 planned to convert to sleeker, smaller, front-wheel-drive luxury models by 1986--much like the strategy that later got GM into so much trouble.

For a time, Ford executives thought of simply slapping the Town Car nameplate onto a proposed front-wheel-drive luxury car--which eventually became the 1989 Lincoln Continental--killing the Town Car’s identity and pulling the company out of the traditional rear-drive luxury market.

So throughout the early 1980s, as the product planning committee updated its schedule, the Town Car’s redesign was consistently left out; few besides Zeniuk and fellow Town Car product planner John Jay believed that the car could make it back onto the master list.

What’s more, a change of leadership at Ford in 1985 seemed to further reduce the Town Car’s chances for survival. Donald Petersen, an auto racing buff with a strong engineering background, replaced Philip Caldwell, a dour financial man with little operating experience, as chairman.

The new chairman had been the catalyst behind Ford’s unique aerodynamic push when he was Ford’s president. Helping lead the development of the Taurus, Petersen had given Ford’s chief designer, Jack Telnack, marching orders to “design a car that you would be proud to have in your driveway.”

Town Car Didn’t Fit

Petersen made no secret of his dislike for the stodgy Town Car--the very antithesis of aerodynamic design. He hated its squared-off looks and its “Boulevard Ride”--a Detroitism for an old-fashioned, pillowy suspension system--and he refused to drive one.

Many of the newly promoted executives around him felt the same way. They just didn’t see how the Town Car could fit into their new company, and few of them would have wanted to be caught dead with a dowdy Town Car in their driveway.

“Don (Petersen) and I like cars with feel,” says Lou Ross. “But Don was more outspoken than I was in his opposition to the Town Car. He wanted to see it go.”

That sentiment remained even after project FN36 was approved. Ross disliked the Town Car so much that he had to warn his engineers to “ignore what I say,” because he felt that he was too biased against it.

Still, Zeniuk, Jay and a few others kept pushing, trying to change the minds of top management, arguing that demographic and economic data showed that the market for big, rear-drive cars was coming back. Eventually, Zeniuk and Jay--later to become the first Town Car project manager--enlisted the support of the marketing executives at the Lincoln-Mercury Division, including Edsel Ford II, the oldest son of the late Henry Ford II.

But it was the market itself--and bungling at General Motors--that eventually wore down top management’s resistance.

As gas prices fell and the economy began to recover, sales of luxury cars started to take off once more. In 1983, Ford brought back the second shift--and eventually overtime--to its Wixom luxury car plant to keep up with surging customer demand.

By 1984, with the economy in full boom, Ford executives could hardly believe what was happening to Town Car sales. They reached 90,000, up 50% from 1983 and a staggering 300% over 1980. Wixom’s harried manufacturing engineers were pulling out their hair in an effort to squeeze more production capacity out of the old plant, which was also building the Lincoln Continental and the Continental Mark VII.

By 1985, when sales rose an additional 30% over 1984, it was becoming clear that the Town Car was not going to disappear of its own accord.

“The major driving force was that the car refused to die,” recalls Jay, now head of product development for Ford of Australia. “Clearly, there was a class of customer drawn to its styling and traditional handling.”

Ford Avoided Downsizing

“The Town Car customers were so loyal, we at Lincoln-Mercury said, ‘Hey, how can you walk away from them?’ ” adds Ross Roberts.

Meanwhile, GM, locked into a massive downsizing program that included Cadillac, found the market shifting against it once more. Luxury car buyers were rejecting GM’s small, nondescript offerings, like the DeVille that Zeniuk tried that fall day.

With GM’s downsizing strategy, Cadillac no longer sold the largest luxury cars in America; the Town Car, unchanged since 1979, now held that distinction. Soon, Cadillac’s traditional buyers--older, upper-income consumers who wanted plenty of leg room and a trunk big enough to hold a foursome’s golf bags--were defecting to the Town Car in droves.

By the fall of 1985, Lincoln-Mercury had picked up on the trend, and Town Car ads began mocking GM’s puny, look-alike cars. One devastating Lincoln commercial depicted a Cadillac owner who, about to step into a car brought around for him by a valet, is stopped when another man who says, “Excuse me, but I believe that’s my Buick.”

Soon, it was clear to everyone at Ford that Cadillac had handed Lincoln an opportunity that was too good to pass up. Town Car’s strong sales and Cadillac’s mistakes led to a “consensus” among top executives in late 1985 that the Town Car had to be kept and updated, recalls Ross Roberts.

“We saw an opportunity to straddle Cadillac,” he adds.

Ironically, Ford’s financial crisis of the early 1980s helped put it in a position to beat GM. Ford had been unable to afford to move as quickly as GM in the shift to front-drive luxury models. So when GM’s downsized products failed, Ford was not yet committed, and was able to kill its plans to do the same thing.

“If we had had all the money we needed back in 1980, we could have very easily ended up in the same situation GM got in,” notes Zeniuk.

Indeed, much of Ford’s financial success later in the decade can be traced to its huge success and profits on older, large models that suddenly regained popularity just as GM was abandoning the market.

Surprisingly, however, it was the federal government, Detroit’s longtime Nemesis, that provided the final push that persuaded Ford to redesign the Town Car. New auto safety laws required that all cars built after Sept. 1, 1989--the start of the 1990 model year--come equipped with either air bags or motorized, automatic seat belts.

Redesign Launched

That meant that if Ford wanted to continue selling Town Cars, it would have to redesign the car to accommodate air bags. Faced with making that investment for the 1990 model year, Ford officials figured that they might as well spend more and redesign the rest of the car at the same time.

So in August, 1985--long before final approval had been given--the first steps on the program were taken, when a design team at Ford’s design center was ordered to come up with sketches and clay models of possible Town Car replacements.

By May, 1986, the design team, led by Gail Halderman, one of the stylists on the original Mustang, had four exterior renderings--one on each side of two full-scale clay models--ready for inspection by Ford’s four-member design committee. The design committee--Petersen, Telnack, Ford President Harold (Red) Poling, and William Clay Ford, vice chairman--held veto power over all styling at Ford. It was one of the few aspects of the company’s car operations with which William Clay Ford, the younger brother of Henry Ford II, had any real involvement.

The committee received a wide spectrum of design proposals. They ran the gamut from a simple, conservative update of the existing, boxy Town Car, to a far more sleek, Euro-style look patterned after the new Continental.

Eventually, the committee agreed with the designers’ recommendation--a compromise design that included touches of both the old Town Car and Ford’s new aerodynamic look. It would be rounder, but conservative touches, like rear opera windows, would have to stay.

“We had an established identity that we wanted to keep, but the problem was how do you do that and make the car look fresh and new?” says Halderman. “You are walking kind of a narrow path.”

The car was to be just sleek enough to reduce the wind noise that had been one of the old car’s most annoying problems. Front vent windows, for example, long a favorite of drivers who smoke, were removed to give the car a cleaner look and to reduce outside noise. Ford figured that, since fewer people now smoke, complaints would be less numerous than they would have been in the past.

Yet the design would still not be too sleek. From some angles, it would hint at Mercedes, but overall it would still suggest the traditional Lincoln look.

That was just what Ford’s market research had suggested that the Town Car customer wanted. The designers had shown pictures of potential designs to current Town Car and Cadillac owners, and the responses convinced them that likely buyers would go along with a modestly updated design, but that they didn’t want radical changes.

These were, after all, older individuals who hated the import look.

“These are buyers who think the Acura is a ridiculous car,” notes Ross.

Size Unchanged

To appease those people, the car couldn’t shrink. A constant concern of the designers was that more rounded features would make the new Town Car appear smaller.

So the design team was under orders to make sure that the car’s length, interior room and trunk size weren’t reduced. “The trunk was the most important thing about the car,” recalls Edsel Ford. “It’s the biggest trunk in the industry, and people love the fact that they can put four golf bags in there.”

Throughout the development process, customer perceptions of every aspect of the car were constantly under scrutiny. Ford sound engineers even used “psycho-acoustics” to determine how drivers responded to different noises emitted by the car. As a result, they revised the exhaust system so that it gave off a deep, resonant sound that drivers perceived as powerful and substantial.

Ford engineers and market researchers were reminded of the conservative nature of their customers at a market research session in Florida--home to so many older Cadillac and Lincoln customers--last December. Several potential buyers complained that the prototypes that they had driven didn’t have enough chrome.

“We wanted to get rid of the chrome, but we couldn’t,” sighs John Huston, who succeeded Jay as program manager, overseeing Zeniuk and Lyall.

But to a far greater degree than on any other car, the Town Car design team also had to please Ford’s directors. Despite Petersen’s distaste for the car, the Town Car was still what most of Ford’s older outside directors drove. They didn’t want it to change, and they let their sentiments be known to Telnack and Petersen each time that the Town Car was discussed at board meetings.

“Telnack would come back from meetings with the board of directors and say, don’t screw up the Town Car,” recalls Halderman.

That took time. Lou Ross recalls taking slides of the Town Car design to a board meeting in 1986. “They hated it,” he says. It wasn’t until a clay model of the car was brought to a meeting that the board was mollified.

“You can’t tell what a car is like from looking at a picture or a slide,” says Ross. “That’s the last time I’ll take slides to a board meeting.”

By March, 1986, Ford management was ready to give the initial go-ahead for the car, with final approval set for the following year. But by waiting so long, management had put its product development group more than a year behind schedule for a 1990 model year launch.

Chassis Unchanged

Meeting the deadline would be made slightly easier by the fact that most of the major mechanical components of the Town Car would remain unchanged for 1990. Air bags would be installed, the exterior styling would be completely redone, the suspension and steering systems would be modified, and anti-lock brakes would be added to give it a slightly tighter ride and handling characteristics.

But under the new skin, most of the old car would remain. The Town Car would continue to be built on Ford’s decades-old, body-on-frame chassis, known as the “Panther” platform within the company. By contrast, almost every other new car on the market today is built on lighter and less expensive uni-body platforms.

Meanwhile, the Town Car’s costliest parts, its engine and transmission, would carry over until 1991, when a more fuel-efficient Ford V-8 is to be introduced.

Since they were retaining so much of the old car, FN36 engineers were able to save time by testing each newly modified part on existing Town Cars to see how they changed the car’s ride.

But a shortage of time wasn’t the only problem. Ford also didn’t have enough people to do the job.

And with the new air bag law coming for 1990, Ford’s body and chassis engineering department was swamped with work; it had to completely redesign the instrument panels of every car in Ford’s lineup.

Robert Marshall, then head of body and chassis engineering for Ford, was so discouraged by the workload that he was ready to veto the Town Car simply because Ford lacked the manpower to engineer it--to take it from a clay model to a prototype car. Marshall had looked in vain for outside help, but none of the big suppliers in Detroit could do it. It was, after all, work that Ford had always done in-house before.

“The Detroit design shops had never been asked to do that kind of engineering work by anybody,” says Marshall.

Then, the Town Car got a lucky break. Marshall, on vacation in his native England, stumbled across a small engineering company, International Automotive Design of Brighton, that seemed ready for the job.

“I went down and talked to them, and concluded they really knew what they were doing,” recalls Marshall.

Japan Brought In

With the English firm handling the basic engineering, Marshall signed off on the Town Car, making it Ford’s first domestic car to be engineered overseas--and by outsiders.

Meanwhile, to improve quality and further shorten the development schedule, Ford turned to Japan to manufacture the car’s outer body. Unhappy with the quality that it was getting from the Budd Co., its traditional Detroit supplier of exterior metal body panels, Ford hired Ogihara Iron Works, a Japanese metal stamping firm, to produce all of the car’s outer panels. It was the first time that Ford had called on a foreign supplier to produce the entire body for one of its cars.

Ogihara had just opened a factory a few miles from the Wixom assembly plant to supply parts for the Continental, so the same facility could now supply the Town Car with parts on a quick, “just-in-time” basis, allowing Ford to reduce parts inventories at Wixom.

But all of this international cooperation led to communication problems. Prototypes were being built in England, while the first outer bodies were being produced in Japan until Ogihara could begin full-scale production in Michigan. Ford had to station engineers in England to keep track of the engineering work, and eventually asked International Automotive to open a Detroit office.

Meanwhile, Ford also set up satellite-linked, single-frame television monitors in Japan, Britain and the United States to process documents and data instantaneously between Ogihara, International Automotive and the FN36 project team in Dearborn.

Soon after International Automotive shipped the first six prototypes to Dearborn, Ford started hand-building its own--at $300,000 apiece--in a small pre-production plant in Dearborn.

But as the first few came off the line in December, 1987, Ford officials realized that they had another crisis: The quality of the prototypes was lousy.

The project team’s initial quality goals had called for the new Town Car to approach the levels of the best German and Japanese cars. But something had gone terribly wrong.

Faced with a deadline for the start of commercial production that couldn’t be delayed because of the air-bag rule, the poor prototype quality struck fear into the leaders of the FN36 project. It raised the prospect of long delays on a program that was already behind schedule.

“Because of the passive restraint (air-bag) requirement, we simply couldn’t fail,” to meet the project’s timetable, says Zeniuk.

Prototype System Changed

In response, the project team mounted a full-court press. In January, 1988, Ford decided to go into “launch” mode on the car, nearly a year ahead of schedule, to intensify the car’s development. One of Ford’s most senior manufacturing executives, Hal Foss, was installed as launch manager, a position normally held by a lower-level engineer. His clout at Ford helped get things moving.

Quickly, the launch team engineers moved to the Wixom plant, about 25 miles from Dearborn. The team held daily, rather than weekly, launch meetings to review problems. And, in an innovative step still rare in the auto industry, prototype production was also shifted to the Wixom assembly line to familiarize the plant’s managers and line workers with the car early in the development process.

But the team had to do something more dramatic to make up for lost time.

Foss hit upon a solution that both shortened the timetable and improved quality. It was a change that sounds like common sense to an outsider, but which ran counter to auto industry tradition.

Foss and project manager John Jay imposed a firm policy that all “engineering changes”--any modifications to the car or its parts--had to be made on the early prototypes, not on models built closer to “Job One”--the start of regular commercial production. All engineers on the project would have to sign off on their areas of responsibility in December, 1988, and changes would be forbidden after that.

At the same time, all components on the prototypes, and the tools and equipment used to make them, would have to meet the same, exacting specifications that would later be required on cars produced for sale to the public. The rules applied to engineers both at Ford and at outside suppliers.

The new policy was revolutionary. Although prototype cars are hand-built, they rarely meet the quality levels of the mass-produced cars later sold to the public, because the tooling and manufacturing processes have yet to be refined. As a result, engineering changes are often made down to the wire to catch prototype mistakes.

Foss’ policy brought instant rewards for the Town Car. Not only did the project catch up, but prototype quality also soared. By late 1988, prototype quality was approaching the levels set for Job One.

Ford engineers found that consistently high prototype quality resulted in unexpected dividends. It made it possible for the FN36 team to take care of minor glitches earlier and enabled them to tell how close to their quality targets they could come at the start of commercial production.

The early prototype sign-off proved to be the key to the success of the program. By January, 1989, the Town Car had gone from a year behind schedule to two weeks ahead of it.

Price Increased

Cost overruns, which were a serious concern in the summer of 1988, were also sharply reduced, most notably through changes that customers would never see, such as substituting less-expensive steel for aluminum in the drive shaft.

Still, the car’s base price of $27,986, announced last Monday, was more than $600 higher than the tentative price that dealers were told to expect earlier in the summer.

Yet in the end, not only was the Job One deadline met, but so were quality objectives.

Ford’s “Nova” team of internal quality auditors has been poring over the first few Town Cars off the line at Wixom, and FN36 engineers believe that they will find that the Town Car’s quality will measure up to levels very near those of Mercedes, considered by Ford’s internal studies to be the best in the luxury class. On an index measuring the number of “things gone wrong” per 1,000 cars, the Town Car is expected to come in at 1,400, not far behind the 1,200 average for Mercedes-Benz’s 1988 fleet.

Meanwhile, wind-tunnel tests show that the Town Car may be the quietest car in the industry.

“I think we’ve hit a new level of quietness for the industry,” says Glen Lyall, Town Car engineering manager. “I think we have exceeded all of our targets on the car.”

So far, the Town Car also seems to be a hit in the marketplace. Despite a 3.3% price hike over 1989, Lincoln-Mercury dealers have already placed 30,000 orders for the 1990 car, and Ford expects to sell 135,000 in the coming year.

Now, even Don Petersen has become a fan; he took delivery for his personal use of two of the first 1990 models off of Wixom’s assembly line.

And this weekend, Zeniuk and Lyall are in California to make a presentation to the editors of Motor Trend Magazine, where the Town Car has been nominated for Car of the Year honors.

“All of the top executives are now asking for post mortems,” says Zeniuk. “Everybody wants to know why it worked.”