• Dec 2, 2007
Ford's quality record at the beginning of this decade was so bad, the automaker was spending billions on warranty repairs, while simultaneously turning off potential buyers in droves. The blue oval has been righting the ship for the past couple of years, with vehicles like the Fusion and Taurus leading a quality renaissance that has the automaker nipping at the heels of its Japanese competition. That quality improvement has been cutting losses, with $900 million in savings achieved in 2007, and more on the way. The embattled automaker is forecasting an additional $300 in savings for 2008, which means Ford is expecting additional quality improvement. The money will eventually be used to finance new product, but for now the cash infusion is merely stemming Ford's substantial North American losses. There is little doubt that newer models like the Edge and Milan are far more reliable than what Ford was making even three or four years ago. The trick will be to convince the public to forgive Ford for its past woes and give the automaker another chance.
[Source: Detroit News]


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  • 36 Comments
      • 7 Years Ago
      I have no problem giving my hard earned dollars to a Ford product. After a 97 Explorer and a 93 Probe GT which I drove for years and were overall problem free, Ford is on good terms with me.

      The thing that has sold me on imports that I have owned over the years has been the connected steering feel, the nimble attitude and the excellent fuel economy. I'm pretty sure that if Ford starts implimenting its excellent Euro products into this Country, that they'll have similar characteristics.

      Meanwhile GM couldn't produce a fun to drive car unless it comes out of Bowling Green otherwise they're about as inspiring and fun to drive as a John Deere tractor. They're either floaty, pillowy boats (entire Buick lineup), completely numb and forgettable Chevy's (except the Corvette), or they have that eighties nose heavy, torque steer city, understeering mess like the front drive GrandPrix or Impala, especially those with the V8 under the hood.

      I swear it's their SUV team designing cars for them.
      • 7 Years Ago
      Ford has a long way to go in winning people back to their brand. Maybe 20 years running of decent quality ratings will help, but more likely the ship has sailed. They mistakenly underestimated the competitive field of choice the consumer would demand. So now they're living with their assumptions. Moral of the story is, when you think the consumer is stupid enough to put up with shoddy quality over a period of time, you lose as a brand and consumers move on to your competitors. Ford has treated their customers like idiots for decades so it will take decades to win back the trust, if that's even possible. Arrogance in Dearborn = rapid market share decline.
      HotRodzNKustoms
      • 7 Years Ago
      @ Doug it's rare for any service department to be profitable, let alone profitable enough to support the entire dealership. I crunched the numbers on the Cadillac dealership with the #1 rated service department in the western region and it costs them $2,800 a hour to keep their doors open. On a average day 300 cars leave the service department. Now somehow I doubt even the majority of those cars are leaving with even $100 worth of work. So I don't think the Ford dealers are surviving on their service departments. They are surviving on high margin high option trucks such as the F-350 King Ranch or w/e the hell they call it and to top it off many dealers are now adding and financing $20k+ in even higher margin dealer accessories.
        • 7 Years Ago
        @HotRodzNKustoms
        You're saying dealerships let you leave the service department with less than $100 worth of service? One overpriced engine "overhaul" is enough to take care of the day.
        • 7 Years Ago
        @HotRodzNKustoms
        $100 on the average service is pretty easy when even the most basic oil change is $90 at a Caddillac dealer. Of course that's still cheap compared to what some Mercedes dealers charge for an oil change ($200+ for their specially imported German Syntec).

        Anyways, the service departments definitely make money at the dealers, even a Toyota service department makes money since most of the maintainence services are crazy marked up.
        • 7 Years Ago
        @HotRodzNKustoms
        Tekdemon, Don't know where you got that $90 figure from. Three Caddy dealers within twenty miles from here and not one charges over $45 for an oil change and all three wash and vacuum.
        • 7 Years Ago
        @HotRodzNKustoms
        Hate to disagree, Hotrodz. I work at a Ford dealer, and the new car dept makes no money, even on the supposed high margin Lariat trucks. There are too many Ford dealers vying for the customers, and most new cars and trucks we sell go out at close to invoice. I compared notes withe 2 other salesmen, and of our 20 combined deals last month, 15 were where we call "minimum commission deals" meaning less than $500 gross profit - before cleaning, PDI, filling the gas tank etc.. On the other hand our service dept charges like $89/hour labor and there is good profit in parts.
      • 7 Years Ago
      Ford products in my family have been trouble free and very inexpensive to maintain. Much, much better than the GM crap cars we've had (Grand Prix, Bonneville, 2 Malibu's all needing repairs within less than one year of warranty period being up)

      Good thing that GM offers that 100k warranty now, cause in my experience, you're gonna need it.

      I think it's time Ford upped the warranty as well to signify the confidence.
      • 7 Years Ago
      The primary reason for the quality improvements is that most of Ford's North American product offerings are based on the proven and refined Mazda 6 platform.

      Use of common platforms, drivetrains, & components is the fastest path to quality improvements.

      Ford's challenge is to make each model look physically different while retaining as many common components as possible for quality & cost. As an example, I see problems with having the premium priced Lincoln being associated with just being a gussied up Fusion/Milan.
        • 7 Years Ago
        The Mazda6 has been consistently under par. Ditto the CX-7/9, especially next to the Edge and MKX. Parts sharing has very little to do with it--they share designs, not parts.

        The truth is that Ford's production setup for the Fusion and Edge are better than Mazda's in this case. You can see this in how Hermosillo's products (Fusion) are much, much better than AutoAlliance (6, Mustang) or Hiroshima (the CXs).
      • 7 Years Ago
      Wow, only $300 in savings for 2008? And they expect that to matter? I still have a $300 cash limit on my ATM card!
        • 7 Years Ago
        Um, you realize they're talkin 300 million right?
      • 7 Years Ago
      I agree with this article but I wouldn't call it "Free Money". The amount of money invested into new quality procedures and design elements needs to be taken into account. These investments that lead to greater quality need to be subtracted from the savings in warranty repair in order to give us the actual amount of money Ford saved.
        • 7 Years Ago
        Sorry man, Quality is Free, no matter how you slice it, it always costs more in the long run to build/produce a low quality product. The long term costs are always higher then what it would have cost to build it right the first time. Ford finally figured this out, thank god.

        Lets hope they can keep it up and stop the bleeding in time.
      • 7 Years Ago
      Err, doesn't this just give people less reason to buy a used Ford, now that Ford is telling people how crappy their cars used to be that they're going to be saving $1.2 billion a year on repairs compared to just 2 years ago?
        • 7 Years Ago
        [In responce to the comment about Ford's used vehicles quality.]So, would it be better to continue to build low-quality vehicles? Ford doesnt make money off somebody buying a '98 Taurus at a used car lot. Yes, higher quality older cars related into new car sales eventually (like when a college kid who's 90 Camry served him 250,000 miles, he goes and buys a new one as a result). But, this takes time, and better now than never.

        It will help sales now, as well as in the future. When a custumer goes to shop midsized sedans, and ends up looking at a NEW Camry and a NEW Fusion, and Fusion comes out to be just as high on the projected reliability and everything else is there (but with a lower retail price), then Ford sells a car to a guy who would've otherwise bought a new Toyota. Its a slow process, but its working.

        Fords of higher quality and lower fleet sales (increased retail) are translating into much higher resale values than in years past. Just look at the depreciation for a previous-gen (2000-07) Taurus compared to a new one.
      • 7 Years Ago
      "Doug it's rare for any service department to be profitable, let alone profitable enough to support the entire dealership. I crunched the numbers on the Cadillac dealership with the #1 rated service department in the western region and it costs them $2,800 a hour to keep their doors open. On a average day 300 cars leave the service department. Now somehow I doubt even the majority of those cars are leaving with even $100 worth of work."

      Go back to business school, if you went in the first place.

      Industry average per repair order is 3.2 hours (warranty or customer pay) that beats your 100 dollar figure right there.
      Most dealers look for 100% service department absorbtion, that means the service department or combo of service and parts department can absorb 100% of the dealers overhead front and back end, that leaves the front end profit on every car.
      So a service department can't make money? If it's not look at it's expense structure, most service departments are loaded with expense from the dealer. Ask a service manager what his Z account amount is or his percentage of rent for the building.

      I was the service and parts director for 9 stores in a dealership group for 17 years, each made net profit each month and not a small amount. I'm still associated with the automotive dealership business and do consulting, I help turn around service departments and improve CSI.

      • 7 Years Ago
      And Used cars. All the dealers around my area (so CAlif) are pitching used cars alot. The first three rows at the lots, every lot are used cars.Theycan make thousands on a used car and acouple of Franks on a new one.
      Plus dealer hold-back, corp-to-dealer bucks,Salesman spiffs and financing.
      Ford Credit was 70% of the positives for Ford at one time.
      • 7 Years Ago
      "Nipping at the heals of its Japanese competition"

      Did anyone else notice this?
        • 7 Years Ago
        Yes, that was such blatant and racist choice of words. How unfortunate and foolish, self marring journalism!
        • 7 Years Ago
        I doubt Autoblog was trying to be racist in using the expression "nipping at their heels" as Ford's quality is doing just that based on what the expression means, as in being very close. I would say a good editor would have caught such a possible inflamatory use of an old expression that refers certain types of dogs as in:

        --"Shelties sometimes try to "herd" the people into a group by running around, barking, and nipping at heels. This tendency appears most when children run around the yard in a group." --

        Ford is now close to being in the same group as Honda and Toyota in regards to quality, that is all they were saying.
        • 7 Years Ago
        If you are going to accuse someone of racism please at least use the correct english. It is heels (as in a body part) not heals (as in to cure). Either way you are really grasping at straws here.

        Any way you slice it building better cars is more profitable. Besides the cost there is the huge factor of customer satisfaction. It is expensive enough replacing a transmission under warranty but what kills you is when after doing it that customer still swears off your product because you left them and their family sitting on the side of the road. This is what killed the Windstar/Freestar more than anything. Ford, GM and Chrysler thought it was acceptable to leave a certain percentage of their customers on the side of the road if it meant an overall savings per unit. It worked in the past when customers were just happy to hear their repair was covered under warranty. Their customers spoke and said that wasn't acceptable anymore and Ford and GM seem to be listening.

        More than any financial statement these reliability numbers speak well for Ford's future. The Camry is proof that people will buy your car again no matter how boring next time if you give them something that isn't going to break down. Ford is going to have a much easier time holding onto Taurus and Fusion customers than they did Explorer and Windstar owners.
      • 7 Years Ago
      this is good news for ford. now if they only used their global resources better, like GM is.
        • 7 Years Ago
        ?unfortunately¿ (not sure if thats the right word unless you don't like GM) the daewoo outsourcing seems to work. Even thought the aveo sucks, people still buy them. And the new Saturn VUE is an Opel Antara rebadged, but parts of it are designed/engineered at Daewoo. The Aura is 100000% better than the old L-series crap, though it still has minor faults, nothing to write home about. So does the new Camry for that matter. I can speak unbiasedly (if thats a word) to that. We owned a 1994 Toyota Camry for 10 years and the only replacement part we ever needed for it was a new starter at 130,000 miles. Nothing ever broke on that car. And it was a pleasant car, too. Now we have a 2004 Highlander, and it is definitely way down in quality. Several issues already, faulty tires, exhaust issues. And it isn't driven hard either. So there you go. The Fusion seems good, but I would buy the new Malibu before I buy a Fusion.
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