CLASSICAL MUSIC PLAYS SOFTLY IN Lou Ross's fifth-floor office in the steel-and-glass headquarters of Ford Motor Company's North American Automotive Operations in Dearborn, Mich. It is in keeping with the professorial appearance of the man who manages the production and sales of all the company's cars and trucks in the United States and Canada.

It is Oct. 4, and Ross has been wrestling with a major problem for the last several weeks. After spending six years and $3 billion, the No. 2 American auto maker is about to introduce its 1986 line of new, European-styled models, a radical departure from Ford's big, boxy machines of the past. Ross and other executives hope the Ford Taurus and Mercury Sable will recapture some of the upscale American market the company has lost to imports.

Originally, the plan was to introduce the sleek, midsize cars in autumn, traditionally the debut season for new cars. Dozens of television commercials, some with 1960's-style rock soundtracks and romantic settings geared to appeal to aging (and well-to-do) baby boomers, are in the can and waiting to be aired. Marketing specialists, eager to start their sales program, are pressing for a date.

But there have been a string of difficulties at the Atlanta assembly plant where the cars are being built, and Ross has been forced to delay Job One, the start of all-out production, several times. Now, the rear doors aren't meeting the rear fenders correctly, and so Ross has decided to delay the schedule once again. The delay is costly: Each week the big plant is idle means that Ford loses as much as $50 million in potential sales. But, in the long run, a new model with a bad reputation could prove even more costly. These days, the doors do have to fit or the cars will seem shoddy compared with the well-finished products of Europe and Japan. ''Ten years ago, confronted with the same problem, we would have built on the appointed day,'' Ross said. ''Today, we build to a quality standard. . . . We start when we meet the standard.''

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SIGN UPPushing back the projected start-up of production from mid-August to mid-October has also put a wrench into the works of carefully crafted marketing plans. There simply will not be enough cars in dealer showrooms to begin a sales campaign until early December, a time when television is saturated with pre-Christmas commercials, creating what marketing experts term a ''black hole'' - the word goes out, no response comes back.

Ross reaches another decision: Sales will begin Dec. 26. Some ''image'' commercials, designed to give consumers a tantalizing glimpse of the new models, will run on television before then, starting Dec. 7, but the hard sell won't start until after Christmas. The marketing men are glum: ''We've never tried to launch a car in the last week of December before,'' one grumbles. ''It will be a noble experiment, at least.''

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Create an account or log inThe decision to hold up the assembly line and delay sales is a luxury, but one that Ross can afford. Prosperity has returned to Detroit; profits are fat, bonuses for executives are back and the dealers are eagerly awaiting the new models that, they hope, will attract a whole new group of young, upscale customers. There is little of the gloom that gripped the American auto industry when the Ford Taurus and Mercury Sable were conceived six years ago.

Yet, Ford executives are nervous. The success, or failure, of new models like the Taurus and Sable will, to a large extent, determine the health of the nation's leading manufacturing industry, one that accounts for more than 3 percent of the gross national product. Imports account for about 30 percent of the auto market; as quotas are loosened, the share is expected to go higher. The Japanese already dominate the lower-priced end of the market and are now moving into the higher-priced markets. European makes, like Volvo and BMW, have prospered by appealing to drivers who have the money to indulge their taste for firm handling and austere appearance. And the first of a wave of Korean-made cars is due to arrive in the United States next year.

What follows is a reconstruction, based on dozens of interviews, of the events that have led up to the introduction of the Ford Taurus and Mercury Sable. This behind-the-scenes story reveals the extraordinarily complex, costly and time-consuming process by which a new line of American cars goes from conception to drawing board to assembly line and, if the auto makers in Detroit are right, to the highways. A U G U S T 1 3 , 1 9 7 9 --A FEW miles outside of Detroit, about a dozen men, most in their 50's and 60's, are seated around the massive rosewood table in the board room at Ford Motor Company's world headquarters, known in the industry as Glass House.

The meeting, which started at 9:30 this morning, looks as if it will go all day. All of the men have taken off the jackets of their dark business suits, and a few have loosed their ties. They are deciding what to do about their major new product for 1985, six years hence.

It is a gut-wrenching time for these men. The automobile business in America has changed profoundly since the days when G.M., Ford and Chrysler scrapped each other for tenths of a point of market share and buyers had no alternatives to Detroit's products. Foreign competition, along with the second oil scare and an economic recession have sent the entire auto industry reeling, and Ford is bracing itself for losses. (Ultimately, over the next three years, the figure climbs to a total of more than $3 billion.) Two months ago, Henry Ford 2d, the boss who could always remind his employees that his name was over the door, announced that he would be stepping down as chief executive officer in the autumn. A year earlier, he had fired Lee A. Iacocca, Ford's president of almost 10 years.

Now, Philip Caldwell, soon-to-be chief executive officer; Donald E. Petersen, his successor as president, and a handful of top aides must outline the next generation of cars. More than just the shape of some new cars is at stake at this meeting: According to projections, the new program will ultimately cost $3 billion, or about one-third of the company's 1979 net worth, and will not come to fruition until 1985. In other words, what these men decide today - the essentials of the car, the chassis, engine and transmission - will be the basis for most of Ford's larger models and, subsequently, for most of its profits until close to the year 2000.

With the new Taurus program - Ford currently prefers code names for its advanced product programs, rather than the letter designations used by G.M. - the No. 2 auto maker hopes to make an assault on what is known in the auto industry as the ''upper-middle segment'' - large, opulently equipped cars that are just shy of the top-of-the-line models. For decades, G.M. has depended on these cars - Pontiacs, Oldsmobiles and Buicks - for at least half of its profits. ''Ford is thought of as a blue-collar car company,'' explains Ross Roberts, one of the company's marketing executives. ''We are trying to move into that upper segment.''

The company tried to make a similar move in the late 1950's with the ill-fated Edsel. Ford executives wince when the comparison is made, and are hasty to point out the differences. But some Ford executives are jittery about the bold, new program.

Hand-colored sketches of proposed designs hang on the walls and thick engineering and financial studies are piled on the table. Ford already has started work on the 1980's models in the compact (the Ford Tempo) and subcompact (the Escort) sizes. So now, Ford is focusing its efforts on planning a new midsize car.

The primary question is whether the new model should be front- or rear-wheel drive. Traditionally, American cars have had the engine in the front, with a shaft running to the rear wheels to transmit power. But over the last decade, many successful imports have demonstrated that putting all the propulsion machinery in the front of a vehicle provides more space for passengers, an important consideration in small cars. Moreover, General Motors's new line of front-wheel-drive compacts known as the X cars - introduced by Ford's archrival four months earlier - are selling like hot cakes.
The men take a hurried, half-hour break for lunch, then resume the debate. ''The big point that we wound up going over and over again was front drive versus rear drive,'' recalls Petersen.

The engineers and marketing specialists tend to favor the switch to front-wheel drive, while financial specialists worry about the extra $1 billion such a switch will cost: To convert to the new system will mean tearing up entire factories.

Technical experts provide little comfort for the Product Planning Subcommittee. The models will be larger cars, so the space-saving advantages of front-wheel drive are not compelling. A detailed engineering study, rating the two plans on an open-ended scale, gives 175 points to front drive, 174 to rear drive, essentially a draw.

Someone brings up the point that, by the time the new cars are introduced, the public might equate front-wheel drive with up-to-date technology, regardless of the engineering benefits.

And there is more. Industry talk has it that, buoyed by the success of the X-model cars, G.M. will be converting virtually all its automobiles to front drive.

The discussion is surprisingly free-wheeling. ''We went through all the details: 'Do we have the right size, do we have the right hip room, the height, the windshield angle, the fuel efficiency, the acceleration and so forth,''' says Harold Poling, soon-to-be head of North American operations.

The marketing men are asked for their reaction. They are blunt: Because of G.M.'s dominant position in the market, they doubt that Ford will be able to sell a rear-wheel drive car if America's No. 1 auto maker favors front-wheel drive. The meeting has been going for almost 10 hours when the Ford managers conclude, as their predecessors have so many times in the past, that it would be simply foolhardy to try to buck G.M. And so, on a hot evening in the summer of 1979, it is decided that as of 1985, Ford's midsize cars will have front-wheel drive.
In the weeks and months that follow the meeting, designers start work in earnest on the new models. Because of the decision to change over to front-wheel drive, the cars will, in fact, be all new - a term that is often used but seldom true in Detroit. Without any requirements to use existing components, Ford designers are finally free to break away from the boxy designs of the old models in favor of a softly rounded, aerodynamic style that resembles the Audi cars from West Germany and contrasts strongly with the wedge shapes coming out of G.M. J A N U A R Y - J U N E 1 9 8 0 --LEWIS C. VERALDI is a large man who, at the age of 50, has been with Ford for more than 36 years. He likes to tell the story about how he almost became a priest rather than a corporate vice president. In 1944, he had been accepted by both a Jesuit seminary and a trade school operated by Ford. ''My father, who was an Italian immigrant and never spoke English, told me, 'You make 20 cents an hour at the trade school. You can go to the seminary after you graduate from trade school.' ''

Veraldi is one of the compa-ny's top engineers, credited with the development of the subcompact Fiesta model that sold more than four million units in the United States and in Europe in the mid-1970's. Now, faced with Ford's mounting financial losses (which ultimately will total $1.5 billion in 1980), he is about to set protocol on its ear once again. ''We were fighting for our survival,'' Veraldi says later.

Traditionally, automobiles in Detroit have been developed sequentially, with little communication between the design, engineering and manufacturing groups. Designers prepare dozens of sketches of new possible models, and the most successful are transformed into full-size clay models. Once a design is approved by top management, it is turned over to the engineering departments, which develop and test each of the thousands of parts that go into a car. The finished specifications are turned over to the manufacturing staff so that it can prepare the assembly lines for mass production. As one engineer put it, ''We would wrap the plans for a new car around a rock and toss it over the wall to manufacturing. If it didn't come flying back within a few weeks, we assumed they could build it.''

But Detroit has learned that there is a difference between just making something and making it right. Many European and Japanese cars are designed for ease of assembly, since frustrated workers frequently make mistakes if a part is difficult to attach or adjust.

With this in mind, Veraldi has invited manufacturing and assembly experts to attend the scores of design meetings. This is the first time these groups have come together and some of the suggestions are novel - for Detroit. At one gathering, engineers from the company's assembly plant in Atlanta recommend that each side of the car be made of a single piece of metal, rather than welded together from a dozen or more pieces as they are in older American plants. Making one side out of one piece, they argue, will eliminate the errors that inevitably creep in during welding, help produce a more solid feel when the door is closed, and make a better actual fit. (Ultimately, each side of the car is made out of two pieces because the company does not have a stamping press big enough to create a whole side. Under the old system, the idea would have never been raised.) Another time, Veraldi takes the design team to the Atlanta factory, to meet with the assembly-line workers. One worker asks that all the bolts used in the design be the same size. ''That way,'' he explains, ''I won't have to spend time switching tools.''

Finally, the heads of all the engineering groups get together.

''It took about a year between the decision to go front-drive until we agreed on the basic architecture of the car,'' Veraldi recalls. ''It was in June 80 that we went from a concept to a program. We put a stake in the ground and said, 'We've got a car.' '' J U N E 1 9 8 1 <--WHILE the Taurus team is working out the details of the cars, the automobile market starts to shift again. Gasoline prices seem stable and Americans are accustomed to paying $1.35 a gallon. Although small cars are selling well, Ford planners are worried about what people will want late in 1984 or early 1985, the projected introduction date for the Taurus models. Until recently, large has always been synonymous with luxury in the United States.

What makes the planners all the more anxious is the fact that the Taurus line will be the basis for most of the company's larger, luxury models through the 1990's; there will be cosmetic changes, but the components will remain the same.
A small group, including Veraldi, Jack Telnack, Ford's chief designer, and Harold Poling, head of Ford's North American Automotive Operations division, begins to review the basic design and marketing assumptions about the line. One day this month, they meet in Dearborn at the top-secret styling studio, a round, domed building where, for the last 28 years, Ford executives have come to look over new models. After examining the full-size clay models of the Taurus and the higher-priced Sable, the men reluctantly decide they are too small. They agree to stretch the wheelbase of 102 inches to 106 inches, and to increase the overall length and width as well. Although the changes are measured in inches, the decision will delay introduction of the cars by at least a year, because everything must be re-engineered.

''I felt like we had wasted a year and had to start all over,'' Veraldi said.

The delay is all the more bitter because this is Ford's first major model change in some time. In 1976, Harold Sperlich, one of the company's top product planners, waged a fierce campaign to produce small cars and was fired by Henry Ford for his efforts. He left and eventually became president of Chrysler. Lee Iacocca departed in 1978 before he could institute major changes, and another group of executives who tried to push for larger models disappeared after the 1979 oil crisis made big gas-guzzlers a thing of the past.

In the meantime, General Motors has been enjoying outstanding success - and concomitant profits - with the X models. Four more lines of G.M.'s front-wheel-drive cars will appear on the road before Taurus.

''That was a biggie,'' Poling said of the decision. ''It sounds like an easy decision: 'We've got the wrong size, make it bigger.' But the delay was significant and we had just come off a horrendous loss year and badly needed this product in the market.'' O C T O B E R 1 9 8 1 --TWENTY-SIX months after the committee decided on Ford's Taurus program, the engineers have completed the basic redesign of the car. The board of directors approves the first $200 million to start tooling the assemby line for the Taurus engine and transmission, the components with the longest lead time. At last, the Taurus program is on the road. C H R I S T M A S 1 9 8 1 --WHILE the rest of Detroit is on its annual weeklong holiday, several dozen Ford technicians are hard at work putting the final touches on the clay model of the second Taurus prototype, including all the modifications decided on eight months earlier. Their children and spouses must celebrate without them; the program is already six months behind and the company can't afford any more delays. J U L Y 1 9 8 2 --DOZENS of designers, many of them graduates of the Art Center College of Design in Pasadena, Calif., and the Center for Creative Studies in Detroit, sit in front of their sketch boards in a large open room at the design center in Dearborn, across the road from the Henry Ford Museum, and try to rough out a shape that will look different from models already on the road but will still carry five or six passengers.

The designers have general guidance from the product planners, the business-oriented people who analyze the automobile market to determine what people will want in the coming decade. The planners have compiled a list of words and phrases to define the car and have written them in Magic Marker on a long sheet of white paper. One phrase sticks out: ''No Quiche.'' The car should be basic and substantial, not trendy.

Ford has a formal 10-year product cycle plan, the outer limits of which are continually being revised. But about five years before a car is introduced, decisions have to be made about its general form and, three years beforehand, the design is frozen except for small details, such as exterior trim.

In order for the first Taurus car to roll off the line on July 29, 1985, final decisions about the exterior and the instrument panel must be made this month. The look of the Taurus is a calculated risk. In an effort to distinguish its designs from General Motor's wedge-shaped cars, Ford has emphasized rounded, European-influenced styling. In doing so, the designers have violated a tenet established in the 1950's when the innovative Raymond Loewy-designed Studebakers were spurned by the public because they looked ''funny.'' The unwritten law: Never stray too far from the path of G.M. Jokes circulating around the industry about Ford's new ''jellybean look'' don't ease preproduction jitters.
Some people, however, are excited by the break: ''We can go on forever following G.M. and never go wrong,'' said Frederick Simon, a Ford planner. ''Or we can step out on our own and get a whole slice of the market - or lose it.''

''Shortly after he became president, Don Petersen met with me and some of my people to review what we were doing,'' recalled Jack Telnack, the reed-thin, fashionably dressed top designer. ''We showed him the sketches and he said, 'Are you really happy with this?' I said, 'Not really,' and he told us to do what we really wanted.''

The new look is a triumph for Ford designers, who chafed for years under Henry Ford 2d's penchant for boxy cars. But Ford product planners are nervous: Will the average American accept the Taurus? Initial consumer research, in which renderings were shown to consumers in New York and on the West Coast, suggests that potential customers are put off by the car's stark, European appearance.

''We backed off a bit when we found people balking at the German, made-in-the-Black-Forest look,'' said John Risk, one of the product planners.

The solution is an obvious one in a city where a top designer once said: ''My favorite color is chrome.'' Designers add bright metal to the dashboard and front end. ''We did it tastefully,'' Risk said, a bit defensively. ''We didn't glop it on.'' J A N U A R Y 1 9 8 4 --THE NEW cars have been officially designated the Ford Taurus and Mercury Sable. They are essentially the same, although the higher-priced Sable is slightly longer, with a plusher interior and a flashier exterior.

The decision on names comes after almost a year of tests run by the company's advertising agency. Early favorites were Probe and Optima for the Ford model and Lucerne for the Mercury. Other candidates included Telstar, Tiara, Orion, Spectra and Ancona.

Coming up with a name is remarkably involved, especially since it is considered one of the most important aspects of marketing. The name, executives hope, will be something that people can relate to and - above all -something people can remember. Some in the industry go so far as to suggest that sales of certain models were actually hurt by a name. Names that are silly must be avoided, as well as those that could have double meanings. (There have been some gaffes. According to legend, a number of Chevrolet Novas made their way down to Latin America, where they sat in the dealers' lots. The reason: translated into the Spanish, no va means ''won't go.'') Ford has had more than its share of trauma over such christenings. When the E car (later called the Edsel) was being developed in the 1950's, a Ford executive hired the poet Marianne Moore to help brainstorm. ''Utopian Turtletop'' and ''Mongoose Civique'' were among her suggestions. No poets have been asked back to Ford.
When Lew Veraldi and John Risk were doing the early planning for the car, they discovered that both their wives had the same astrological sign, Taurus. ''It sounded pretty good for a program name,'' said Risk. ''It stood for something bold and aggressive, so we applied it to the program and it stuck. Ninety-nine percent of program names never make it through the selection process, but this one researched well, so we used it.''

The Sable designation for the Mercury version was one of a number of preferred names for luxury cars. ''It's been popping up for years,'' said one Ford executive. F E B R U A R Y 2 5 , 1 9 8 5 --IT IS 6 A.M. in Boca Raton, Fla., and the light of street lamps bounces crazily off the pseudo-Spanish Colonial facade of the Boca Teeca Lodge. In the parking lot, four cars are lined up, two labeled ''Cobalt,'' two others ''Aegean.'' Anyone familiar with the automobile industry would recognize the Cobalt vehicles as members of G.M's A-body family that includes the Chevrolet Celebrity and Oldsmobile Cutlass Ciera. The Aegean sedan and station wagon are, in fact, Taurus prototypes, hand-built just two months ago in Dearborn.

Several dozen people stand in front of a tent. They are the first of 140 residents who have been carefully selected to test the two soon-to-be competing automobiles. For $50, these upper-middle-income men and women will spend two hours each evaluating the cars. Ford managers hope that their ''target buyers'' will give candid reviews.

This is one of a series of consumer-product tests. Detroit's auto moguls are sensitive to the accusation that they are out of touch with public taste and, though the atmosphere in Boca Raton is low-key, the testing is anything but casual. Each test driver is greeted by a monitor contracted by Ford. The greeting is always the same: ''Hello, my name is . I will be your guide for this survey.''

Drivers are asked to judge all aspects of the car, from appearance to handling, and rate them on a scale from 1 (poor) to 10 (excellent). Part of the exercise takes the consumers on a 22-minute drive over a carefully selected course that includes residential areas, limited-access highways and bumpy roads.

Ford executives are eager for the results. This is the first time actual cars have been tested by the public. In nine previous clinics, only renderings were available or mock-ups of the interior, called ''seating bucks.''

''Research gives you a glimpse of the truth,'' said Thomas Moulson, Ford's manager of car product research, who flew in from De-troit to observe the field test. ''You can't fight a war without reconnaissance aircraft. But what you come back with is just information. Management has to decide how to act on it.'' In 1982, for instance, the negative reaction of consumers on Long Island to early sketches of Taurus was enough to trigger major changes in the exterior design of the cars.
This time there are complaints about poor performance. Back in Detroit, engineers decide to adjust the throttle linkage to make the car jump a bit when the gas pedal is tapped. In this case, the consumers' reactions to acceleration outweigh engineering measurements. ''The zero-to-60 time is the same,'' said Risk, a lean marathon runner. ''But the perception is of better response.'' A U G U S T 1 9 8 5 --AUTOMOBILES are brought to market with a precision the military might envy - except when things go wrong.

On Ross Roberts's desk in Detroit's riverfront Renaissance Center is a blue looseleaf notebook bearing the title ''1985 Ford Taurus Launch Plan.'' The 150 or so typeset pages detail each step in marketing, advertising and selling the car.

Roberts knows his target. ''He - and most will be men - is in his upper 30's, makes $35,000 to $40,000 a year; 80 percent are likely to be married. Most will have white-collar jobs, 40 to 50 percent will have some college and there will be 2.6 people in the family.''

If he is right, a wave of relief will sweep Ford headquarters. Of late, imports have been capturing younger buyers, leaving the Big Three domestic companies with a dwindling pool of older -and, for the most part, poorer - customers. According to J.D. Power & Associates, an automotive market-research company, 41 percent of the buyers of American cars are 50 years of age or older. The median age of purchasers is 46, 11 years older than the 35-year-old average for Japanese cars. Lee Iacocca of Chrysler has quipped that the average age of Cadillac buyers is ''somewhere between 70 and deceased.''

Hopes of attracting younger and more affluent buyers is one reason Ford has taken the gamble with European-type styling. ''We still have things like the Grand Marquis'' - a big, square sedan - ''for our older buyers,'' one Ford man said. ''But I think we can get some conquest sales from the imports with these cars.'' A conquest sale, in Detroit's jargon, is when a company sells a car to a customer who had previously been driving a competitor's model.

T HE FIRST SABLE commercials will be aired on national television on the evening of Dec. 7, followed on Dec. 20 by the Taurus commercials. The new cars have been arriving at the lots of Ford dealers for the past several weeks and the salesmen are optimistic. Once both assembly plants are in full operation (and if projections are right), Ford hopes to sell more than half a million cars annually, with a base unit price of about $10,000.

The early reviews from the influential automobile magazines have been generally good. ''We have driven the future, and it ain't bad,'' read a headline in Car and Driver magazine.

Meantime, the men who were responsible for the Taurus and Sable are already focusing on other projects: Philip Caldwell, who, as chief executive officer and chairman, presided over the Taurus program for most of its life, retired early this year. Donald Petersen took his place and Harold Poling moved up a notch to become president. Lewis Veraldi has expanded his responsibilities to include the planning and engineering of luxury cars. These three men, along with Ford's engineers and designers and marketing men, are all working on the cars Ford will present in 1989 and 1990. ''All of our decisions are long-term,'' said Poling. ''We're working on the 1990's now, and the replacement for the Taurus that will be in the 21st century.''
John Holusha is chief of The Times's Detroit bureau.

1986: Back when the Taurus Ruled America