Henry Ford, who created the automotive industry's first mass-market hit with the Model T a century ago, was a proponent of radical simplicity. In fact, Ford became famous for saying his customers could have the $825 Model T in any color – so long as it was black. In the century since the first Model T in 1908, Ford's vision of top-down efficiency has been swamped by thousands of feature and color combinations on new cars, trucks and SUVs. The result, executives say, has been higher production and inventory costs and headaches for customers and dealers in sorting through a complex matrix of choices. Now, Ford Motor Co and other embattled US automakers are going back to black, embracing the spirit of Ford's notion in response to mounting losses and the risk of a deeper downturn in the United States, the world's largest market for new cars, in 2008. Ford Chief Executive Alan Mulally said he was amazed by the number of variations Ford offered when he arrived at the No. 2 U.S. automaker from Boeing Co in 2006. “I was looking at the (Lincoln) Navigator console,” Mulally said. “We have 128 different options you could choose on the console. That's just the console.” With so many variations, a customer inevitably will want a vehicle that is not in stock, leading to a frustrated customer and pressure on the dealer to offer a discount, Mulally said. “They're unhappy and we're losing money,” he said of Ford, which posted losses of $2.7 billion in 2007 and $12.6 billion in 2006. Ford's chief of marketing, Jim Farley, who was hired away from Toyota Motor Co last year, said he was stunned to find that Ford was offering 100,000 combinations of options on its entry-level Focus sedan. Some 80 percent of Ford's sales came from just 4,000 of those combinations, he said. In response, Ford has cut complexity by reducing the number of “buildable combinations” of the 2008 Focus by 99 percent. On the 2008 Expedition, it has cut combinations by 95 percent. “Coming from Toyota, I can tell you that the opportunity is there to reduce the complexity of our lineup,” Farley told analysts recently. It's a similar story at Chrysler LLC, where sales chief Jim Press – another high-level defection from Toyota – has also pushed the struggling automaker to simplify. “Previously, we offered too many options,” Chrysler Chief Executive Bob Nardelli told reporters. “That resulted in too much complexity in the plants that build them, too much confusion for the dealers who order them and no added value to the customers who buy them.” Nardelli said Chrysler had cut ordering complexity by 93 percent over the past two years by dropping some options and repackaging others. Chrysler, which lost $1.6 billion last year, plans to go further, cutting models and trimming dealers. That represents a stepped-up restructuring under Cerberus Capital Management LP, which bought an 80 percent stake in the automaker in 2007. __
