Ford's quality turnaround leads to free money
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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Reader Comments (Page 1 of 3)
Zak 2:01PM (2/22/2008)
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PhattyDre16 1:27PM (12/02/2007)
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.
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Icon149 7:39PM (12/02/2007)
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.
J.Crew 1:27PM (12/02/2007)
This is common sense. I can hear the accountants in Dearborn having a revelation... "Gee, you build it right the first time... it saves us money! I guess we won't nickle and dime the suppliers at every chance we get..."
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Mike 4:16PM (12/02/2007)
Yeah, I'm glad ford finally figured this trick out. It only took them 100 years. Your awesome ford ... most forward thinking car company in the world. What's the sound of one hand clapping?
cigarbaron 1:33PM (12/02/2007)
"Nipping at the heals of its Japanese competition"
Did anyone else notice this?
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Doctor Kum 1:37PM (12/02/2007)
Yes, that was such blatant and racist choice of words. How unfortunate and foolish, self marring journalism!
Judy Zik 2:20PM (12/02/2007)
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.
J.Crew 3:21PM (12/02/2007)
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.
willem 5:36PM (12/03/2007)
Only a clueless nincompoop would mistake that phrase for a racial slur. Leave it to overly-sensitive, touchy-feely, politically-correct leftists to lob a charge of racism where none exists.
dougjp 1:52PM (12/02/2007)
I found the choice of words totally irrelevant to racism or anything else worth noting, but then I'm not out looking for it. That's not my hobby. If you get the idea I hate those who are, then you have hope yet.....
Play on words dominates the press, just look at any newspaper front page headlines for a while, and it will always appear. So why is it only in this specific "area" where the self appointed "protectors" cry foul, and not when it involves other peoples? The answer is obvious and its high time it was exposed - reverse discrimination, pure and simple.
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cigarbaron 2:15PM (12/02/2007)
Calm down. I just noticed it. You seem to be the one sensationalizing something here. Let me ask you something. Why is it here in these "areas" that "self appointed protectors" like yourself feel so compelled to come out and douse out reader criticism. There's constructive criticism and then there's just plain flaming.
You seem to be doing a far more heinous deed in limiting free speech by crying sensational foul. You sound intelligent enough to know that there's emotional appeal in what people say. And what you basically did was self righteously confirm any doubts we did have about the post and partial mindsets like youself. Unless you have a more sound argument than one with a premise that we may yet have hope, your post is essentially back noise and not worth any more of my time.
Ben 2:11PM (12/02/2007)
this is good news for ford. now if they only used their global resources better, like GM is.
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psarhjinian 2:26PM (12/02/2007)
By "use your global resources better", you mean outsource as much as possible to Daewoo as the engineering costs are cheap, right?
I'm not being (completely) facetious, either. I'm fully expecting GM-DAT to take over as much of GM's mainstream business as it can handle. They've proven they can do 80% effort, low-margin cars far better than GMNA ever could (I mean, have you seen how much better the base Optra is than the Cobalt?). It wouldn't suprise me at all to see the Epsilon and Delta cars, as well as the next Corsa, go over to GM-DAT in the future.
Ford isn't there yet: they don't have a dirt-cheap engineering group akin to GM-DAT since Kia was eaten by Hyundai.
Ben 2:42PM (12/02/2007)
?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.
skoochy 2:14PM (12/02/2007)
Wow, only $300 in savings for 2008? And they expect that to matter? I still have a $300 cash limit on my ATM card!
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skoochy 2:16PM (12/02/2007)
Grrr double poster
Apu 2:42PM (12/02/2007)
Well, double-poster. $300 goes a long way in fighting off dem Japs. We gotta save China from dem Toyota samurais, man!
skoochy 2:14PM (12/02/2007)
Wow, only $300 in savings for 2008? And they expect that to matter? I still have a $300 cash limit on my ATM card!
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PhattyDre16 7:11PM (12/02/2007)
Um, you realize they're talkin 300 million right?