Lincoln's Blackwood program has given a black eye to Magna International Inc.

A pesky fit problem with the luxury pickup's cargo box, designed and manufactured by Magna Steyr, has delayed production of the high-profile niche vehicle, WAW has learned. And the holdup so irked Lincoln parent Ford Motor Co. that the auto maker put a freeze on future business with the Canada-based supplier.

“Magna's a great supplier,” says Brian P. Kelley, president of Ford's Lincoln and Mercury divisions. “Historically, it's been a great supplier. But they fell down in this case.”

The freeze no longer is in effect, but Lincoln suggests relations between the companies remain chilly as it intensifies scrutiny of the Blackwood program. “We have to keep a constant eye on it to make sure that it's the level of quality we want,” Kelley says. “We think that, today, we've got it pretty well in hand.”

Magna admits there have been “issues” regarding the box. “And the primary reason for those issues is the introduction of new technology,” says a spokeswoman. “This is a new vehicle and a lot of things about it are new and innovative. Whenever you have a program with new technology, you're going to face some learning curves and issues. We're all facing it.”

With its blend of utility and comfort, Blackwood — priced at $52,500 — was intended to make a splash as a “uniquely American interpretation of luxury,” according to Kelley's predecessor, Mark Hutchins.

First shown as a concept vehicle three years ago at Detroit's North American International Auto Show, it was unveiled last year with a promise to be in dealer showrooms before mid-2001. Lincoln's 18-month production goal was 18,000 units.

But the vehicle didn't launch until October. And by Jan. 31, fewer than 700 Blackwoods had rolled off the line at Ford's Clayco-mo, MO, plant where they are built. Magna Steyr delivers the vehicle's fully-assembled, signature “floating box” from a nearby Kansas City-area facility.

Meanwhile, Blackwood's prime competitor, General Motors Corp.'s Cadillac Escalade EXT, which bowed several months after Blackwood, has pulled ahead in the product launch race. Escalade EXT outsold Blackwood in January by more than 600 units.

Blackwood's cargo box, which Lincoln prefers to call a “trunk,” is a complex design. The exterior panels are made of composites and are cantilever-mounted to Blackwood's chassis to spare the trunk and its contents the rigors of road shock. A faux African Wenge wood surface is photo-laminated on the box's exterior panels. Properly applying that film has been difficult, sources say.

Stainless steel interior panels and Dutch doors finish the trunk, which is topped by a 1-piece plastic cap — the first-ever use of sheet molding composites (SMC) for a high-gloss Class-A tonneau surface. It's painted black to match the body color. Meridian Automotive Systems produces the tonneau cover and ships it to Magna for installation on the box.

The tonneau's design presents its own challenges. Weighing 80 lbs. (36 kg) and hinged directly behind the cabin, it's powered by an electric motor and opens to a 45-degree angle.

Lincoln offers no details about the barriers posed by the design of Blackwood's box. Nor does Magna, even though it successfully engineered other Blackwood components, such as its innovative rear suspension system (see WAW — June '01, p.40).

But a source close to the program echoes Magna's argument about new technology. Magna Steyr ran into problems because it was attempting a number of industry firsts with the Blackwood box, WAW is told. The supplier designed the box as a space frame, to which the panels, doors and tonneau cover would attach.

“It was an all-new design, a new process, new materials and new suppliers involved,” the source says. “You try anything that new, and you're bound to face challenges.”

In addition, Ford's Premier Automotive Group, which includes Lincoln, has in the past year become more demanding of suppliers in its bid to meet customer satisfaction targets for vehicle appearance, sources say. Blackwood's complex design put even greater pressure on Magna Steyr.

Magna threw its “full resources” behind the problem of mating Blackwood's box and composite tonneau cover, the spokeswoman says. As a result, a solution was reached and relations between two companies are on the mend.

Says the Magna spokeswoman: “We're moving forward. The trucks are being shipped. And it's business as usual with us.”

The Blackwood's problems represent another black eye for the composites industry, as well. GM dealt with quality issues during the launch of Chevy Silverado. Its composite pickup box program was delayed from 2000 until 2001 so GM could resolve issues regarding side panel surface appearance. Ford and Lincoln now are in a similar situation.

“Ford won't ship the truck unless it's perfect,” a supplier source says. “This is a $55,000 truck.”

Meanwhile, the Blackwood fiasco has Lincoln reviewing its sourcing practices, Kelley says. “It's not so much that entering into supplier arrangements are a bad thing. It's that you have to be extra vigilant in making sure that when you outsource something … you make sure the full capability is actually there.

“You have to look at the process that's being used, the quality checks, the quality processes in place. The lesson is not: Don't outsource. It's: When you outsource, make sure there are thorough processes in place to deliver the quality you need and you expect.” Adds Kelley: “We have to make sure it doesn't happen again.”

This year, Magna will merge Steyr with Magna's Tesma powertrain division or will spin off Steyr as an independent company to ply its expertise in engineering, vehicle development and manufacturing.

Beyond Blackwood, Magna Steyr has room to brag: Its vehicle assembly plant in Graz, Austria, has plenty of new business, and it is negotiating to purchase the neighboring Eurostar plant in Graz from DaimlerChrysler AG.

Meanwhile, Lincoln has been forced to make amends with would-be buyers disappointed by the delay. “We're doing a lot through our dealers to make sure we take care of those customers,” Kelley says.

As of Dec. 31, fewer than 150 Blackwoods had been sold. But now, orders are “strong,” Kelley says, hoping customers who walked away from Blackwood will reconsider. “Now that we have it back into availability, we hope to see them come back.”

He declines to reveal line-speed targets, but says, “We're about half way there.” The Claycomo plant, known as Kansas City Assembly, also produces F-Series trucks.

As for Blackwood's future, Kelley says Lincoln remains committed to the program. Regarding a 4-wheel-drive version, he says Lincoln is undecided.

The Blackwood setback contributed to a “very tough year” at Lincoln-Mercury, Ford Chief Financial Officer Martin Inglis tells analysts during a Jan. 17 earnings update. “We were awaiting the new products, many of which are coming in the pipeline in 2002.”

In addition, Lincoln's performance contributed to an unspecified decline suffered by PAG, which also includes Aston Martin, Jaguar, Land Rover and Volvo. “Overall, it was worse in 2001 than 2000 because of Lincoln-Mercury,” Inglis says.