Ford CEO Farley tells retired engineers fixing quality will 'take several years'
After a number of years of recalls troubling warranty costs, Ford hired former J.D. Power VP Josh Halliburton in March of this year to be executive director of quality. In November, Halliburton got a new boss, Ford moving longtime product development exec Jim Baumbick into the role of chief transformation and quality officer to replace Stuart Rowley. Having just called the audible, it’s going to take Ford time to execute the play. Ford Authority reports that when CEO Jim Farley recently spoke to the Ford Retired Engineering Executives (FREE) group, he told them, “Fixing quality is my No. 1 priority … It is the most important initiative in the whole company. And it’s going to take several years.”
Farley’s already been on the mission for a couple of years, and things aren’t much better now than when he officially became Ford’s CEO on October 1, 2020. One of the pillars of his company strategy was improving quality. According to Detroit Free Press figures, Ford Motor Company spent $3.923 billion in warranty costs in 2020 for 4.19 million cars sold globally, nearly $2 billion more than GM in a year where auto factories had to shut down for two months. Consumer Reports’ Annual Reliability Study rated the Ford brand 22nd out of 26 automakers in 2020, Lincoln pulling up in the caboose at 26th. In 2021, things got worse, Ford spending $3.952 billion on warranty claims for 3.94 million cars sold — and those two years were massive improvements over 2018 and 2019. Ford did climb two spots in CR’s reliability survey, Lincoln remained last. This year’s a bit mixed, Lincoln reaching 10th place on the CR survey, Ford at 18th, the same place it held in 2021, and both brands moving up slightly in CR’s Brand Report. However, Ford has had 46 recalls covering 6.8 million vehicles through the first seven months of this year, more than triple the next brand, Tesla, nearly five times GM in third. And CR rates bread-and-butter models like the Explorer and F-150 below average for reliability, so too the in-demand Mustang Mach-E, and says, “All other Fords are average.”
As Farley told the engineers, “We didn’t lose [quality] in just one or two years,” and as everyone who’s been sick knows, getting back to health almost always takes longer than getting sick. In comments about the issue to other audiences, reportage has always mentioned Farley’s connecting the warranty issues to customer unhappiness and Ford’s bottom line. This time, it was apparently all about Job One. “Until we fix quality,” he told the engineers, “nothing else matters.”
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