In the spring of 2003, Phil Martens saw trouble down the road.
As head of product development for Ford, he was supervising the creation of what could be one of the most important vehicles in company history. While the car wasn't due to come out until the fall of 2004, the team needed to be in launch mode right then to stay on schedule.
It wasn't. It was still pulling marathon hours just trying to get the thing running properly.
The vehicle was the much-anticipated gas-electric hybrid that CEO Bill Ford Jr. had been touting for a couple of years as emblematic of the new, environmentally friendly Ford. The Ford Escape Hybrid would be the first hybrid SUV; it would handle like a muscular V-6, yet sip gas -- 36 miles per gallon, about 50% better than a standard Escape; its emissions would be minuscule. It was the most technically advanced product the automaker had ever attempted to put into mass production.
The hybrid team was packed with PhDs, but for all of their technical prowess, the brainiacs had one weakness: little launch experience. Martens needed someone to crack the whip without destroying morale, someone to persuade the scientists to stop perfecting and start finishing the vehicle. That someone was Mary Ann Wright -- part spark plug, part disciplinarian, and all Ford.
A self-described "car nut," Wright, 42, has launched Sables, Tauruses, and Lincolns. Her discipline is legendary. Twelve-plus-hour days. Five hours of sleep. Four a.m. workouts. She has blond bangs, blue eyes, a firm handshake, and the confidence of someone who doesn't miss deadlines. "My launches are really, really good," she says. Somehow this doesn't come across as a boast.
Even with Wright on board, staying on schedule wasn't a sure thing. Introducing one major technology is a challenge. The Escape Hybrid contains nine such technologies. By the time Ford sends it to dealers in September, this SUV will have been in the works for a little more than five years. In addition to overcoming herculean technical hurdles, Ford collaborated with suppliers around the globe. "This is an unusually complex team with little or no experience with hybrid technology," says Martens, "and they're introducing this unusually complex technology into a mainstream manufacturing system without any flaws."
With a little more than a year to go, the team told Wright it could deliver the vehicle -- but three months late. That may not sound like much for such a complicated and lengthy project, but to Ford, nothing good could come from a delay. It would generate bad publicity and erase good buzz. Besides, there was already confusion over whether the project had been delayed (Ford insisted it hadn't) and whether Ford was relying on Toyota's technology (it wasn't).
Concerned about alienating her new team, Wright asked Martens to play the heavy. "We are going to deliver on time," he told the team. "You have to throw out all the processes and tools that you'd normally use on a normal gas engine and reinvent the way you do it. Anything you need you'll get." The group's reaction? "You could have heard a pin drop," Martens recalls.
Or better yet, a clock ticking.
Creating a dramatically different product is a staggering challenge for any organization, but for the oldest and second-largest American automaker, it's a higher, steeper mountain to scale. Ford Motor Co. has been making cars for 101 years -- cars with one motor. Open the hood of a hybrid, and you'll find two: one gas, the other electric.
As a "full" hybrid, the Escape can run on either motor. Its network monitors an array of computers to determine which motor can drive the wheels most efficiently. In an instant, the vehicle balances the dueling demands for power and acceleration and for high mileage and low emissions. For team member Tom Gee, Ford's announcement of a mass-produced hybrid was "the equivalent of Kennedy saying, 'We're going to the moon by the end of the decade.' " At Ford, vehicle programs are typically ranked 1 to 10, according to the complexity of the power train. "This was a 20," says longtime researcher Mike Tamor.
The stakes are particularly high because Honda and Toyota introduced their hybrids in the United States first -- in 1999 and 2000, respectively. Although they lacked the power and roominess of conventional cars, the first gas-electric models found a niche audience. Last year, Toyota released a zippier Prius, but Ford insists that its Escape is going where no hybrid has gone before: into the mainstream. The pitch? No compromises on acceleration, towing capacity, cargo space, fuel economy, or emissions. Not only is it the first hybrid manufactured by an American automaker, but it's also the first hybrid SUV. Ford has plenty of competition in the rearview mirror, though; over the next three years, the major automakers plan to release 20 new hybrids, many of them SUVs and trucks. "The next six months are crucial," says Lindsay Brooke, senior analyst for CSM Worldwide, an automotive forecasting and consulting outfit. "Ford won't have this to themselves for long."
And it needs to make the most of this window. At the New York International Auto Show in April, Bill Ford stood next to a gleaming green Escape Hybrid and said, "It couldn't come at a better time." He was referring to gas prices that were going through the roof. But he easily could have been referring to the recent travails of the automaker founded by his great-grandfather.
The past few years have been especially hard. In 2000, there was the rollover controversy surrounding the Explorer. Then came a flood of lawsuits. A last-place quality ranking in a J.D. Power & Associates survey. Recalls on other vehicles. Upheaval in the executive suite. Two years after earning an industry-record $7.3 billion in 1999, Ford's automotive division lost $8.9 billion. Over the last three years, its U.S. market share has shrunk from 22.8% to 20.5%. Ford also drew criticism last year when it announced that it hadn't met its goal of improving mileage on its SUVs by 25%. Little wonder, then, that everyone from disgruntled environmentalists to impatient shareholders to Ford himself are wondering if the company's first hybrid will be a great Escape in more ways than one.
Ford's Escape Hybrid program got its start in a Toyota Prius, of all places. After being tapped to head the team in late 1998, Prabhaker Patil went for a test drive with then-chairman Alex Trotman. As the two had suspected, the soon-to-be-released Prius sacrificed too much performance. Trotman insisted that Ford's hybrid do better.
To develop its unconventional vehicle, Ford created an unconventional team. Typically, researchers and product engineers don't work closely together. At Ford, in fact, they work in different buildings. Researchers act as consultants; they share their expertise while commuting from the Ford Scientific Research Laboratory. But Ford's team would itself be a hybrid: scientists and product engineers inventing and building software and hardware together, then shepherding their creation through production. "The people story is as interesting as the technology story," says Wright.
Patil, 54, was a hybrid himself, a PhD scientist who worked in Ford's lab for more than 15 years and then in product development for the past four. He sought team members he knew would be open to collaboration. They included Anand Sankaran, 39, who holds a doctorate in electrical engineering and is a nine-year veteran of the research lab. "It has always been my wish to take something into product production," he says. Still, Sankaran was curious about the fit. "There was a little bit of concern, because I come from a background where I deal more with solving problems technically but it's not fine-tuned to be put easily into production."
The creative tension often centered on deadlines. "On one side, you have people with program discipline who said, 'This has to happen at this point and at this point,' " Patil says, "and the other side would say, 'Oh, you want to time an invention?' "
In December 2002, for example, just nine months before the first media test-drive, the team was scrambling to prepare the car for a cold-weather battery test in Canada. In early February, the temperature was expected to reach 40-below -- just right. "If you miss it, you're out of luck," says Gee, the power-train control supervisor. Ford would have to wait another year -- a disaster.
Meanwhile, researchers were still tinkering with the battery, one of the hybrid's main muscles and one of its trickier components. At 330 volts, it's about 27 times more powerful than a standard car battery, and it's stashed under the rear cargo space. It provides power to the electric engine and gets recharged when the brakes' heat is converted into energy. In extreme cold, the battery is vulnerable to overcharging; it can only generate and receive so much power, and if it overcharges, the cells can become damaged. Instead of tossing the problem over the wall, as is often the case at Ford, the researchers worked with the engineers to make sure the vehicle's computers were constantly taking the battery's pulse -- calculating its state of charge some 50,000 times a second -- and providing enough, but not too much, power. The team made the deadline, but just barely. "We were working 16-hour days, seven days a week, right up until February 7," says Gee. "I took Christmas and New Year's off. I didn't do any Christmas shopping. My wife did it. She recognized the situation."
Internally, the hybrid team is simply Team U293. It occupies a long stretch of gray cubicles a one-minute walk from the tinted glass door of one of Bill Ford's offices. The bulletin board celebrates new babies and new patents ("Method for controlling an internal combustion engine during engine shutdown to reduce evaporative emissions"). Schedules wallpaper the conference room, along with a banner that says, "By When?"
The office feels ordinary, but for Ford it is revolutionary. Engineers and scientists work in adjacent cubicles. "Before, it might have been a half mile apart, but even one building away is a barrier compared with what we have now," says Gee. "It makes a huge difference." Group lunches in the nearby cafeteria evolve into meetings. Hallway chats lead to impromptu problem solving. Once, a couple of engineers at the soda machine discovered a discrepancy in a power-train specification and corrected the issue before the code was written. With thousands of tasks on the to-do list, preventing a problem is as sweet as solving one.
The hybrid group has become the envy of other Ford engineers. "I have engineers who say, 'I wish I could be on that team,' " says Craig Rigby, a technical support supervisor. "Then I tell them the hours." As a way of motivating his weary team, Patil would remind them how fortunate they were. "This was a product that if you did it right, it was going to do a great deal for customers and the company and the country and the environment," he says. "You rarely get a chance to go after something like this in your career. It's what I call the nobility of the cause."
Ford could have done things more simply. It might, for example, have bought part of Toyota's hybrid system, as Nissan has done. But in November 2002, less than two years from the scheduled start of production, Martens decided to develop the technology in-house. The only Toyota patents that it licensed, he says, were to avoid patent infringement. "That was a defining moment," he says. "It took away the safety net."
From a strategic perspective, though, Ford had no choice. It could not be saddled with Toyota's first-generation technology while its rival was busy creating the next system. And buying instead of building would also have denied Ford folks the chance to earn their own patents (more than 100 so far) and develop skills for future projects.
By designing more components and systems digitally, for instance, the hybrid team saved time and money. Engineers could test the interaction between the two engines and the battery on screen, then rework the virtual hybrid. Next, putting "hardware in the loop" allowed them to test an actual part in a virtual vehicle. They could hook up the battery and simulate the rest of the vehicle on computers, resolving many issues before building the entire vehicle. Neither tool was new at Ford, but the team used them more extensively than other teams had. It paved the way.
The team also developed a way to do "rapid prototyping" of the Escape's vehicle control system, or VCS. It's the hybrid's brain, coordinating the engines, brakes, battery, and so on. The engineers would connect a laptop to the vehicle and monitor the system as it was being driven on the test track. Then they'd park and write new code to make improvements, redesigning the system on the spot. Within minutes, they could download the software and, in effect, create a new Escape Hybrid prototype -- another useful tool for other Ford product teams.
When the first prototype was built in late 2000, Deepa Ramaswamy and about a dozen other team members huddled around the vehicle at a Ford test facility in Dearborn, Michigan. They knew the odds were slim that it would start right away. And yet, says Ramaswamy, "you always have the slightest hope."
They couldn't simply turn a key in the ignition. With some 300 or so sensors attached to the vehicle, it looked as if it were on life support. They had to synchronize a series of commands on their laptops. They tried it for the first time and . . . silence.
The Escape Hybrid didn't start that day. Or the next. Or the day after that. "It took several weeks to get it to start, and it took months to work out the bugs," says Ramaswamy.
When it finally did start, it wasn't because of one thing. It was the culmination of hundreds of adjustments to the software, wiring, and hardware. And just as no single person got the credit that day, the choice of who got to drive the vehicle first was democratic. It wasn't Patil, the head of the team, or Ramaswamy, one of the original team members. It was the intern.
Once the hybrid was running, the team focused on how it handled, how much gas it consumed, and how far they still had to go. A year and a half later, Patil took a "street legal" prototype home for testing, and gave his wife and two teenage sons a ride. This was the product that had consumed him for more than two years, the reason he left the house at 5:30 a.m. and had missed a family vacation for the first time in 20 years. They were unimpressed -- which thrilled Patil. "To them it wasn't a big deal, because it didn't do anything weird," he says. "But that was a big deal to me."
After putting his foot down in the spring of 2003 about the Escape Hybrid's launch, Martens gave the team a rare gift: no outside interruptions. From May through December, it wouldn't have to do management reviews and other presentations. Martens would check in periodically and test-drive the latest prototype so he could keep his bosses informed. "I was getting questions from above," he says. "Weekly." A grin. "Daily."
Once the team was shielded from top management, pro-ductivity soared. "People who'd been saying, 'I don't know how we can get there,' said, 'My God, we can get there.' "
During this "dark period," Martens says, "I allowed them to be entrepreneurial, and they doubled their productivity." Issues that had been stalled for months got resolved: reaching the fuel economy goal and building the first preproduction model. "The same people who had been coming into my office saying, 'I don't know how we're going to get there,' were saying within weeks and months, 'My God, we can get there,' " Wright recalls.
Early this year, as the August 2004 deadline for production approached, Martens continued streamlining the bureaucracy. If the team requested a technical expert or equipment, it got it. No formal requests or delays waiting for approval. "People knew they couldn't say no," says Wright. When the language barrier was impeding work with the Japanese battery supplier, a Ford battery expert fluent in Japanese was dispatched to Japan within 24 hours. Decisions that normally would take days were made on the spot.
Wright put the pedal to the metal. "Every day is a lost day," she would tell the team. She quickly established a launch plan and a "meeting cadence": daily get-togethers at 8 a.m. for two hours, with suppliers in Germany and Japan participating by video. There were also weekly meetings with chief engineers and technical forums to tackle specific issues. Wright devoured the details. "Most chiefs won't do that. I find it helps motivate people and helps educate me."
Launch mode meant acting as an even more integrated team. During the design phase, small groups had focused on each system to master its separate technology. Now the challenge was orchestrating the interaction between systems. "I told them, 'If one person is struggling, we're all struggling,' " says Wright. She could be tough, but Martens believed she was what the team needed, just as Patil and his more collegial style had been effective in development. She was the hybrid team's second motor; if Patil's job was to inspire invention, hers was to wrap it up.
Letting go didn't come naturally to scientists like Sankaran. One of his goals was eliminating extraneous engine noise. Like a conductor with extraordinary hearing, he could detect an occasional, almost imperceptible high-pitched tone even though the transmission met the noise requirements. Technically -- officially -- it was good to go. But, Sankaran says, "as an engineer I wanted to say, 'What are the physics behind this sound? I can do better.' " Ultimately, though, he was persuaded to let it go by taking consolation in another of Wright's reminders: "This isn't the only one we'll do." There will be more hybrids down the road.
Although a great deal is riding on Ford's first hybrid, it isn't expected to boost the company's bottom line immediately. Even if it sells the 20,000 models it will produce the first year (something it's likely to do since almost 60,000 people have registered for a newsletter promoting the vehicle), that will amount to a fraction of Ford's total. Last year, the company sold 167,678 standard Escapes and more than 800,000 F-Series trucks. Ford won't say how much it cost to develop the hybrid. But despite retail prices of $26,970 (for front-wheel drive) and $28,595 (for four-wheel drive), a few thousand more than standard models, it will probably take years for the project to pay for itself. And while the hybrid market is growing rapidly -- 30% in the United States last year -- it's still relatively small. Out of 16.5 million vehicles sold in the United States in 2003, fewer than 3%, or 47,500, were hybrids. Some analysts expect hybrid sales to reach nearly 100,000 this year.
Still, Ford is hoping the hybrid pays off in less tangible but important ways, starting with good publicity. Environmentalists have ripped Ford for having the worst fuel economy of the major automakers in its light-duty vehicles, which average 19 mpg (highway). "The Escape Hybrid is important from a corporate prestige standpoint," says CSM's Brooke, who specializes in hybrids. "Bill Ford has been whacked by [environmentalists] because they said, 'You didn't walk your talk.' So this is Ford's first shot back, and it's a real good first shot." Like the $2 billion makeover of its Rouge industrial complex into a model of sustainable manufacturing, the Escape Hybrid -- the first of three hybrids due out over the next few years -- is part of a long-term strategy to develop technology less harmful to the environment. "Bill has a huge emphasis on getting this technology into as many products as possible," says J Mays, Ford's head designer.
Some of the chief benefits of developing the hybrid won't appear in Ford's ledger this year. Rapid and virtual prototyping. Computer simulation. Streamlined bureaucracy. Making an SUV hybrid also puts the company one step closer to the industry's holy grail: mass-producing a car powered by a hydrogen fuel cell -- no gas required or emissions released.
But those are still years away. For now, there's a vehicle to manufacture and deliver to showrooms, where the waiting list at some dealerships is 80 people long. If the automobile is everything it's cracked up to be, if it avoids recalls and begins to restore the luster of Ford's once golden reputation, then the members of the hybrid team will have earned a new title: not simply researchers and engineers, but Escape artists.
Chuck Salter  is a Fast Company senior writer based in Chicago.