Taking It to the Streets ITTA's chief leads campaign to boost ABS market

A year ago, as winter was bearing down hard on Michigan, Frank Macher probably envisioned a summer filled with leisurely boat rides with his wife and an occasional sampling from his fine wine collection.

The Ford Motor Co. executive had retired at the end of 1996 as vice president and general manager of Ford's Automotive Components Div., which evolved recently into Visteon, the $16 billion parts operation owned by the No. 2 automaker. He had spent 30 years at Ford.

But as spring approached, the 56-year-old retiree received an offer he couldn't refuse - a job as president and CEO of ITT Automotive (ITTA), the sixth largest independent supplier in the world, with 1996 sales of $5 billion and 35,000 employees.

Along with the post came a considerable challenge - to do something about the stagnating North American market for antilock brake systems (ABS), which account for about a quarter of ITTA's business. In addition, he would oversee a massive restructuring to focus on core businesses.

The ABS market was booming in the early 1990s but leveled off as automakers pushed for lower vehicle prices and as questions surfaced about the effectiveness of ABS, a feature that can add as much as $600 to the price of a new car or truck.

But for Mr. Macher, the price is surely worth paying because ABS is effective in preventing accidents. The problem, in his view, is that too many American drivers don't know how to properly use ABS, so the accident rates for ABS-equipped vehicles has not shown considerable improvement over those without it.

So a few months after taking over at ITTA, Mr. Macher hosted an Automotive Press Assn. luncheon to launch a radio and print advertising campaign in metro Detroit to win over car buyers and to persuade automotive executives that ABS should be standard equipment. For now, it is standard mainly on luxury cars and sport/utility vehicles.

It's too early to tell if the campaign is connecting with its target audiences.

Sales representative Myron Kar of Ed Schmid Ford in Fern-dale, MI, says customers showed a lot of interest in ABS when it was new several years ago.

"But in the last two years or so they have not been asking for it," he says. "They can't justify the cost. They'd rather pay for a power moon roof or a CD player."

Still, some customers won't buy a vehicle without ABS. "Today, I ordered a 1999 F-250 (available in spring)," Mr. Kar says. "The customer emphatically said he want ABS on it." ABS is optional on the vehicles.

The campaign hardly stops at the advertising level. The company is asking driving schools to include information about ABS and pressing states to include ABS-related questions on their driver license examinations. Just recently, Indiana agreed to do so beginning in spring.ITTA has stepped up its " Drive Safer America! Skid Pad Challenge," a popular event at the 1997 ITT Automotive Detroit Grand Prix. It allows drivers to experience first-hand the benefit of ABS during emergency braking situations.

Drivers compare maneuverability with and without ABS on a 100-ft. (30.5 m) long skid pad, covered with soapy water. The event has been held in Wisconsin and Michigan, and more stops are in the works.

In addition, Mr. Macher is committed to breaking into the Japanese ABS market by building a technical center there.

ITTA has plenty at stake in its campaign on behalf of ABS. Without an improvement in the North American market, the future of its other systems that rely on ABS - such as traction control, stability management and brake assist - stands in question.

About 60% of new cars in the United States are equipped with four-wheel ABS, and on compact cars the figure is as low as 10%, Mr. Macher says.

Meanwhile, in Europe the presence of ABS is up to about 60% and is expected to reach about 73% in coming years.

But in the U.S., he says, most people want to drive home in their new car once they've made a decision to buy. "If the car is not equipped with ABS," he says, "and the public is not as aware here as they are in Europe, the tendency is to take the car without ABS because it happens to be the right color, with the right CD, and drive off with it."

ITTA had expected the North American ABS market to continue growing. Because that hasn't happened, the company recently consolidated production of MK20, its latest ABS model, from two plants to one, in Morganton, NC.

The move was only part of a restructuring plan Mr. Macher is overseeing to become more profitable and to focus the company on brake and electrical systems, while disposing of non-core businesses.

In recent months, ITTA has announced the closing of its plant in Mississauga, Ontario, and the downsizing of operations in Asheville, NC; Kettering, OH; and Frankfurt, Germany. In all, the plan will cost about 1,700 jobs but save the company about $115 million by 1999.

That's a pretty full plate for a guy who was supposed to be retired.