Ford's Sweetheart Deal Sverdrup builds new wind tunnels, allows Ford tosub-lease

Allen Park, MI, soon will be home to a revolutionary new wind tunnel testing facility. Ground was broken, cement was poured and the city officials beamed with civic pride as they welcomed Sverdrup Technology Inc. to their town.

This $100 million driveability test facility will be one of a kind and will be able to replicate the conditions of any altitude or climate in the world, from the highest peaks to the deepest valleys, from hurricane-force gales to early morning tranquility.

And this six-tunnel complex will be unique for other reasons. It will be used exclusively by Ford Motor Co. engineers - at least for now - and it's being constructed without a penny from the automaker. Of course, Ford will pay to lease the building for 10 years, but no one will even hint at how much the lease will cost. There is potential, however, for Ford to save significantly by leasing instead of owning.

The Tennessee company has built - and is now developing - wind tunnels for automakers around the world. It's working currently on a wind tunnel at the Chrysler Technology Center in Auburn Hills, MI.

But in those cases, Sverdrup builds the facility, then turns the key over to the customer to operate.

In the Allen Park project, Sverdrup will own the building and even provide 35 employees to operate the wind tunnels in conjunction with Ford. It means Ford gets a state-of-the-art facility without the expense of operating and maintaining it.

The arrangement, suggested by Sverdrup, illustrates just how far suppliers are willing to go in partnering with customers.

"This is the first time we will actually run a facility for an automaker," says Sverdrup Vice President Robert Norfleet. Allen Park will also be Sverdrup's first automotive wind tunnel built for use by more than one customer at the same time.

Although Ford is expected to use all available testing time for a few years after the facility opens in June 2000, the Dearborn automaker has the option of subleasing to other companies, further reducing its operating expenses.

Tier 1 suppliers, under increasing pressure by OEMs to do more product testing, already have expressed interest in using the facility. Another automaker could even use a test cell; privacy barriers will protect confidentiality.

Mr. Norfleet says the only way such an open relationship between multiple companies could work is if an independentcompany - Sverdrup - operated the facility.

"We felt there were a lot of opportunities for lease time to be shared, but it was only possible if it wasn't in someone else's backyard," he says. "You can't sell time to another OEM to come to Ford's proving grounds and let a Ford operator run the place. If Sverdrup runs it, it takes those fears away. "

While such an arrangement will be unique in the auto industry, it has been tried with success among defense contractors. Sverdrup began operating wind tunnels for the U.S. Air Force in the 1950s, and engine makers who were competing for business on the same jet fighter, for instance, have conducted simultaneous tests at the same site, without breaches of confidentiality.

The Allen Park test facility will more than halve Ford's need for on-road evaluations in hot and cold climates. The road tests will be conducted merely to confirm lab results, says Neil Ressler, Ford's vice president-advanced vehicle technology.

Ike Iaconelli, director of Ford's global test operations, estimates the new facility will allow Ford to shave 13 months from the 36- to 40-month vehicle development cycle.

The 120,000-sq.-ft. (11,000-sq.-m) complex will subject vehicles to temperatures from -40F to 130F (-40C to 54C), winds of more than 150 mph (240 km/h) and altitudes ranging from 280 ft. (85 m) below sea level to more than 12,000 ft. (3,600 m) above sea level.

There's one sensation, however, that Sverdrup can't replicate: bugs hitting the windshield.

ITT Industries' exit from the original equipment market leaps forward with the sale of its brake and chassis business for $1.9 billion in cash to Continental AG, the German company best known for its Continental and General tires. Continental's Automotive Systems Group is pushing for new business worldwide in areas such as electromechanical brakes and electronic chassis control, which combines nicely with ITT's portfolio. The sale, subject to regulatory review in the U.S. and Europe, should be complete by year's end. Meanwhile, ITT's competitor, LucasVarity plc, announces it will sell its heavy vehicle brake business.

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