Can’t Hackett: Production trouble in Chicago slows Ford Explorer sales

Last spring and summer, Ford spoke excitedly about the massive, compressed reengineering of its South Side plant in preparation for the 2020 Explorer SUV. The work cost a billion dollars, resulted in a thousand new jobs and required just a month of down time.

But in releasing third-quarter earnings, Ford officials confessed: They botched it. Just like them, the Chicago plant, 12600 S. Torrence Ave., is under pressure to perform better.

The company said quality problems on the Explorer production line forced it to send vehicles 260 miles to a plant in Flat Rock, Michigan, to be fixed. With shipments to dealers delayed, Explorer sales fell 48% during the quarter, contributing to an overall 2% decline in revenue for the company, to $36.99 billion compared with the third quarter of 2018.

”We have higher expectations for our performance,” CEO Jim Hackett said on a conference call with analysts Wednesday. He explained: “But the challenge, the what I call the design problem is that we had to ramp down a really profitable vehicle. We had to clear out the plant, literally bulldoze everything out, build a new plant inside, get it started and not drop any volume in the midst of that. So it was pretty aggressive. And, as I look at that, I want to win like that in the future. But we fell short in a few ways.’’

Joe Hinrichs, Ford’s president for automotives, said the main issue was the Chicago plant’s lack of space to keep vehicles needing repairs. The Flat Rock plant has the capacity, and company executives said it has been used before to address production issues.

In the Explorer’s case, the 2020 model was switched from front- to rear-wheel-drive and it got a gas-electric hybrid engine. In bringing it to Chicago, the plant had to be reconfigured because it was set up for the old Ford Taurus sedan, now discontinued.

“We, simply put, we took on too much. We signed up for too much at launch,” Hinrichs said.