http://www.autoblog.com/entry/1234000440053531/

 

I've read this story and the comments by the Ford employee on the subject.

I don't think Ford is being fair to Aisin on this one. It appears from here that Ford only ordered 20k units because they were only lukewarm in their commitment to the product. All the sudden they have a hit on their hands and they are not able to capitalize on it. Ford would have been better off ordering more units up-front, even if it meant not changing the design for 3-5 years. They might have been able to negotiate a better unit price at the same time.

 

As a Ford fan I've seen them mess up their hits pretty often. Let's see, position Thunderbird as a luxury coupe even though it is branded with the Ford logo.

Unless you were wealthy and didn't mind driving an over trimmed Ford product, the Thunderbird was out of the price range of those most interested in driving it. Instead of selling it in the high 30s as an exclusive car, they should have priced it at about 25, including all the bells and whistles and they would have had demand beyond their ability to make them.

What else have they messed up that was basically one of their cash cows? Taurus and Sable were a complete mess up in 1997. The radical redesign was too much for the beige-car-driver-set to deal with. Even though it was a superior vehicle (more interior space, more luxury items, better engine options) to the Camry and other competition even in that model year people passed over it because it looked too funny. Mid-sized beige-car-driver-set folks don't deal well with vehicle redesign. They can barely tolerate vehicle design evolution.

But you are correct in saying that Ford was much too conservative in terms of what they thought the demand was, but hindsight is always 20/20.

The truth of the matter is that Ford is going to have to vertically integrate their hybrid development and manufacturing. They are no going to be able to rely on other manufacturers to build the parts they need for their hybrid offerings. In other words, they have licensed parts of Toyota's technology, now all they have to do is create the vertical integration Toyota has in terms of development and manufacturing.

 

They did NOT license Toyota's technology. They cross-licensed some patents, that's all. The technology was developed independently.

Toyota has also relied on outside suppliers. The THS transaxles were produced by Aisin, just like Fords. The batteries were produced by Matsushita. Toyota has apparently brought the transaxle production back in-house for HSD, but still get their batteries from Matushita.

Since Aisin has the most (only) experience producing PSD-based hybrid transaxles, Ford was smart to leverage their expertise for the Escape. However they did a terrible job of predicting volumes, and any time you're making widgets it takes time to ramp up production if you have not prepared to do so.

At a time when Ford is outsourcing most of the componentry for their vehicles (e.g. the battery, transaxle, cooling systems, electronics are all produced by outside suppliers) the idea of going back to the "old" method of building cars isn't likely to find any fans in Detroit.

 

I think I said something wrong there. I didn't mean that Ford copied Toyota, or that they didn't work independantly. Quite to the contrary, I have argued your point about Ford's independant development of the same technolgoy in a couple of different forums (not sure about here, I usually use the story of the development of asphalt as an example of parellel and independant development of the same product).

I admit I don't know the details of manufacturing source of various components. However, is Ford blameing Aisin, or are they just frustrated with the fact that their supplier is supplying more than just Ford and as such they are having to compete for space and time with that organization, who has contracts with another auto manufacturer to build another hybrid using comprable technolgy sets?

Supplier capacity competition is a pretty typical problem in auto manufacturing. It is just that it pops up here because it is a very obvious reason why Ford's HE production is limited. And it pops up because this isn't an issue which can be redireted to another manufacturer. Aisin is the best at it right now, and as such they are basically the only choice.

Sure, the Detriot folks don't like the idea of being vertically integrated. They have become too comfortable with having one company build their radios, and another build their a/c and another make their electronics, however, if hybrid technolgy is going to be mass produced, it requires manufacturers to develop what are basically unfamiliar products, and as such there might be efficiencies in vertical integration that were lost a long time ago as the car became nothing more than a common rolling box that was made to look different from another maker's rolling box.

Sorry to offend.

 

Don't worry, I'm not offended at all. But it seems a very common misconception that Ford just bought the technology. In fact the patent cross-licensing appears to have taken place only after the IP lawyers for both companies got involved.

The original story was a Ford claim that Toyota's investment in Aisin (Toyota owns a minority stake in the company) is why they can't get the production increase they want.

The original article claimed that Aisin is no longer building hybrid transaxles for Toyota (Toyota apparently did decide to go in-house), so if that is true Ford is currently their primary customer. I suspect the problem is that Ford told Aisin they wanted 20K units a year, and thusly Aisin tooled up their production to meet that level with a minimal margin for production increase. Then Ford went back and said they want twice as many units and Aisin says they can't ramp up production as fast as Ford wants.

The article claims Ford is seeking additional suppliers to meet demand, but if the experts at Aisin can't ramp up fast enough, how is a newcomer to the technology going to manage it?