Back when things were still being made in Australia, Ford developed its four-wheel-drive vehicle, the Territory. At the time, it was the most market-researched car in this country’s automotive history. This article is a historical piece, written when it looked manufacturing might have a future here, and when we might still keep making our own cars.
If we can believe the stories, breakthroughs often occur either through happy accidents or epiphanies. Yet that’s not how Ford vehicle line director Russell Christophers conceived the Territory.
There were no eureka moments. The concept for the sports utility vehicle (SUV) didn’t come to him fully formed in a dream. The basis for the Territory didn’t begin in idle doodling, or come in a blinding flash of inspiration.
“The idea for Territory began – as all great cars do – by recognising a customer need,” Christophers says.
In practice that means the concept for the Territory was actually inspired by its potential customers, and was exposed to an unprecedented level of market research.
“We researched appearance, we researched function, we researched interior flexibility, we researched everything,” Christophers says. “So the final product we had we knew was what the customer wanted. The Territory was simply about having a really disciplined, detailed market research process to find out what the customer wanted, and then building it.”
Christophers took the lead in developing and researching the Territory concept in 1999, five years before it came to market; that’s how long it takes for a car to be researched, designed, tested and built.
As chief program engineer he was the CEO of the program, the owner of the total business, and responsible for making sure team members were on the same page.
Traditionally, the Ford of choice among Australians has been the Falcon, which generates most of Ford Australia’s profits.
When time came to invest in the latest Falcon (the BA, launched in 2002) Christophers and his team began to wonder if doing the BA Falcon made sense, if the large car business was going to continue to be sustainable, and if there was a market beyond the Falcon.
“Good questions,” Christophers says. “And we certainly weren’t going to ask for half a billion dollars to execute the BA Falcon without knowing the market need was going to continue to be there towards the end of the decade.”
So in order to validate the development of the BA Falcon, Christophers decided to do extensive market research, talking to those buying large cars and finding out what their future buying intentions were. Realising that four-wheel drives were being bought as substitutes for passenger cars, they spoke to those drivers as well.
“And that started to ring alarm bells with us,” Christophers says. “Going forward, the large car business had been in decline slowly over time. The market research told us that that decline was likely to continue. Large cars would still be a very important market segment, but there was risk in the rate of decline. Large car passenger owners said, ‘Yeah, we’ll probably buy another large car, but we’ll certainly look at four-wheel drives. We like the image of them. It says I lead an active lifestyle, I do things in my life. And I’ve thought about it, but the thing that’s stopping me from going there is that I know they’re expensive to buy, they’re expensive to run and they drive like a truck’.”
Four-wheel drive owners confessed their switch from cars was prompted by imagery; they wanted to do things with their weekend and get away. But of course, they’d never driven it beyond the local mall or school.
Christophers and his research team found that interesting.
“So four-wheel drives aren’t totally meeting the needs of the customer; large cars aren’t totally meeting the needs of the customer,” he explains. “And then we decided to validate where people-mover owners had come from. And we found they were life-stage people – they had large families and needed this vehicle to carry the kids around – they hated the car in terms of what it said about them as a person. It says, ‘I’m a boring person, I cart a lot of kids around. And they all said, ‘As soon as my kids grow up, I’m going to get out of this vehicle and buy something that suits my ego a bit better’.”
Christophers said Ford created a triangle with a family sedan at the apex, a people mover in one corner and a traditional SUV in the other.
“Somewhere in the middle was a product that combined: ‘I don’t look like a truck, I look like a futuristic four-wheel drive, with its smart styling. I’m nimble and agile around town, because of these people drive their vehicle in an urban environment. I’m still fun to drive, I don’t drive like a truck. And I’ve got a lot more interior flexibility; I can do things with my life on the weekends’,” Christophers says. “So we started to research what this vehicle might be.”
There was also a business need: Ford’s manufacturing plant in Cambellfield in Melbourne’s northern suburbs has had many millions of dollars of investment pumped into it so that it can make cars – large cars. Another plant in Geelong makes engines, also for large cars. At the same time, the large-car market was and continues going into decline. Question: is there a way to use the assets that are already in a place to make something Australian customers want to buy?
Searching for the answer led the team back to the triangle, and the possibility that in the middle of it lay a “sweet spot”: a hybrid vehicle that could be made using the assets in place.
“In life, if you can get a customer need and a business need aligned,” Christophers says, “you’ve really got a strong thing going for you.”
One of the early difficulties Christophers had was selling the Ford Australia high brass on the idea. After all, there were already plenty of SUVs in the local market. Ford even had its own, the Explorer.
“A lot of people were really sceptical,” Christophers says. “To give the customer what they wanted was going to cost a lot of money, close to half a billion dollars. Not to give the customer what they wanted was going to be compromise and in my belief it wouldn’t deliver the volume and wouldn’t justify the investment. But if you got it right, you hit the sweet spot, the customers would come and you’d get return. If you tried to do the thing by half measures, you would fail, and that was really difficult.”
As might be expected from a large-cost and sophisticated piece of machinery manufactured from parts sourced globally, automobiles have a very clearly delineated, detailed production process.
In the Ford system, each point of the journey is marked by a milestone, with Job One when the first car rolls off the assembly line.
After research reveals a program might have merit, it’s given kick-off, or KO, and approval is given to start spending engineering money, say $50 million. A design is developed, its feasibility tested and detailed costing completed.
An early design version based on the Fairlane was deemed too big by respondents, who wanted a city-friendly car that was agile, nimble and easy to park as well as versatile for weekend use.
A shorter version based on the Falcon platform was developed.
“And we kept on going to market research events asking the customer what they wanted, going away and analysing the data and then going back again,” Christophers says. “We never said, ‘We know what the customer wants’. We said, ‘We think this is what you told us, so we’ll go back again with a new proposition or a new property’.
“And each time we did this – and we did it 12 or 13 times – we got closer and closer to what it was.”
This is not standard operating procedure. Christophers needed compelling data to convince the local and international Ford management that the Territory was the right thing to do. The market research data had to stand up to close scrutiny; there needed to be a lot of it and it needed to be statistically valid.
Every car attribute that could be researched was, and then it was prioritised according to customer rating. Appearance, safety, dynamics and performance were all considered in this process.
“If you’ve only got a finite amount of money to spend, you want to spend most of the money on the area of the car the customer says is the most important to him or her, and then you cascade down through the priority process,” Christophers says.
Then followed benchmarking against the best in the market, the Lexus RX300 and the BMW X5.
“We go through a detailed benchmarking process,” Christophers says. “Who is the competitor we are competing against? Get their vehicle. Tear it down, drive it, understand it, benchmark it. Then we have objective measures. If we want to be ‘as good as’, we know what it’s going to be … if we want it to be ‘better than’, we know what we have to do.”
About 18 months into the Territory program, Christophers and Ford Australia president Geoff Polites went to the parent company’s US headquarters in Dearborn outside of Detroit, seeking approval.
A hierarchical company, Ford has a monthly forum attended by senior vice- presidents called product matter meeting (PMM) at which all major investments are discussed and accorded a yay or nay.
Polites handled the overall pitch, Christophers talked the powers that be through the specifics of the Territory, using a 40 per cent scale model and virtual animations that showed the workings of the car’s interiors.
“But it wasn’t just about getting Territory approved, it was about the ongoing viability of Ford Australia,” Christophers says.
Following the “show and tell” the Australians were grilled about the program’s business specifics. How many are you going to sell? How do you know you’re going to sell that many? How much is it going to cost to make? What are you going to sell it for? How much money are you going to make? Does the business structure make sense – will you get appropriate returns?
“Ford is a global company, we make and sell cars everywhere in the world,” Christophers says. “Everybody has an idea to make money. So your proposal needs to stand up to scrutiny because not all the proposals that go forward to PMM get through. It came under very close and detailed scrutiny.”
But of course, the Territory was approved.
As chief program engineer Christophers was held personally accountable for delivering a flawless product when it was launched, on cost, and capable of generating the profits he’d committed to make.
He estimates there were 500 lifetime heads (500 people working for a year) on the Territory program, with about 120 personnel dedicated to the project in the peak year.
Christophers met weekly with the senior heads of project development, engineering, sales and marketing and supplier quality assurance for about three hours.
Known as the Program Steering Team meeting, the forum was a chance for Christophers to assess how each department was tracking towards its targets.
“In each milestone there are very specific deliverables, things that must be achieved before you can say, ‘I passed that milestone and I’m ready to move on to the next milestone’,” Christophers says.
“And it’s very detailed. It’s about confirming that I have secured the resources to do the work. It’s about confirming that design has got to a point where it needs to be at. It’s about confirming that I’ve done all the test work that I need to do to verify the design will meet the intent, meet the target – the part won’t break, it won’t vibrate, it won’t malfunction, it will do what’s required.”
And as much as each department understands it’s working as part of a team, sometimes there are conflicts.
“You never know what you need to know at the start,’ Christophers says. “You find out a lot of things along the way.”
There might be conflict over the use of geographical location, two different teams wanting to use the same place for a different component. There are trade-offs, usually between attributes – handling and ride, for instance – but very often cost.
In these instances it was Christophers’ job to arbitrate.
“On the journey from program approval to Job One there are a number of trade-offs that the chief program engineer has got to make to get there,” he says. “And he’s continuing to make those trade-offs all along the journey.”
Yes, there are egos involved in the manufacture of cars, disagreements from time to time, and the inability to compromise. At the same time, there is an incredible amount at stake each time a new vehicle is developed, which only serves to underline how crucial it is each part of a unit is performing its function.
“The most important part of working as a team is alignment: common goal, common vision,” Christophers says. “In a car program that’s really complex, keeping everybody aligned as things change and things move.”
With the Territory, though, maintaining team focus was no arduous assignment, and Christophers has described it as the best car ever to roll off a Ford assembly line.
“One of the great things about the Territory program was that the people who have worked in this business for a long time in Australia, this was the first time we’d ever got to design a car from the ground up,” Christophers says. “So it really wasn’t difficult to engender and develop passion and commitment from the team. It was something everybody wanted to do; it was a product everybody could relate to.”
Kind of a dream, really, even if the project didn’t begin that way.
A version of this article originally appeared in INTHEBLACK magazine.