Ford Warranty Costs Plummets on Higher Quality

[jpd80]

This is the point from the 2007 Q1 report:

Cost savings of $500 million, $400 million of which was associated with North America – bringing total cumulative cost savings to $1.9 billion toward the 2008 target of reducing annual operating costs by $5 billion compared with 2005.

 

It's highly likely the $400 Million cost saving from NA is far more than just warranty savings.

 

So far, the world wide cumulative savings are $1.9 Billion on 2005's operating costs. I'm wondering where they're going to find the extra $3.1 Billion in cost savings before next year, their target is $5 Billion cost reduction after all.

Edited April 29, 2007 by jpd80

[grbeck]

It would be interesting if someone (JD POWERS, CONSUMER REPORTS) was able to publish the warranty costs per vehicle sold by various manufacturers and model.

 

There would have to be some way to standardize the figures. For example, GM warrants the drivetrain for a longer amount of time than either Ford or Chrysler, so its warranty costs per vehicle could potentially be higher than those two. That does not necessarily mean that GM's quality is inferior.

 

Also, in the long run, use of that figure could DISCOURAGE a manufacturer from being generous with customers, especially with out-of-warranty items (or, "goodwill" coverage). After all, strictly sticking to the warranty terms and costs would result in lower warranty costs per vehicle - even if, in the long run, it results in an uhappy customer.

Edited April 29, 2007 by grbeck

[NickF1011]

WHAT!!

 

umm Ford trucks are the longest lasting pickups on the roads, but maybe you are talking about the SUVs of which i don't know, but i have had three F-150s all with over 100k on it, not one problem....PERIOD.

 

their pickups are just better, maybe you are talking about recalls because i did have to go in for that, which took, let see... 10 min cause the guy was in the bathroom, he changed the cruise control right in the parking lot and i was off

 

sorry if i came off as harsh

 

Trucks typically have more problems than cars. That's just the way it is. Ford's may be damn good trucks, but the best truck is still going to have more problems than the best car, speaking on averages. So yes, the number of trucks in the Ford showroom are undoubtedly going to lower their overall numbers compared to less truck-dependent brands like Mercury or Honda.

[old_fairmont_wagon]

Something else to consider with these figures, hasn't the focus seen some warranty tinkering over the past few years? IIRC, there was a period of time that it came with a 5 or 10 year, 100K powertrain warranty. Also, recall that emissions systems have somewhat different, and longer, warranties than most other vehicle parts as well. This means that there is going to be a longer term footprint for previous years sales then we are giving credit for. Granted, you're talking about one powertrain line and a set of systems on most cars that most people don't even care if they break, unless it stops the engine from running.

 

What this improvement in quality does allow foMoCo to do, however, is to offer a more competitive warranty package while keeping vehicle costs in check. THAT will improve their sales as it is a buyer confidence booster for the brand. Quality improvement may take time to sink into your customer's head, but, a longer warranty is something tangible that a customer can take with them. Another factor with that longer warranty, it boosts vehicle residual value for the duration of the warranty. This leads to lower lease rates for the customer and a larger profit factor on those leases. For fleet buyers, it reduces TCO on all their vehicles as they are resaleable for more money, and, while most non-rental fleet vehicles are kept for 3 years or more, it lowers maintenance costs on those units.

 

So, what I'm saying is that, this is a good thing that compounds on other good things and speaks positively about the future health of the brand.

[kevinb120]

It could be true Oval, I mean Ford likes to screw people and Toyota are always the savior.

 

 

You mean like the possible 6+ million potential sludge issue engines that Toyota does everything they can to get out of paying to repair?

[kevinb120]

It would be interesting if someone (JD POWERS, CONSUMER REPORTS) was able to publish the warranty costs per vehicle sold by various manufacturers and model.

 

 

CR just uses mysterious unoducmented customer surveys to determine 'reliability'. They don't even post how many contributors there are to the information, nor have I ever met someone who has sent one in on a domestic car. How easy would it be for Toyota to send in thousands of surveys?

[Surgen]

CR just uses mysterious unoducmented customer surveys to determine 'reliability'. They don't even post how many contributors there are to the information, nor have I ever met someone who has sent one in on a domestic car. How easy would it be for Toyota to send in thousands of surveys?

 

I just filled one in on-line. They ask what vehicle you have, how many miles, how much you've spent on repairs, and on what. Took me about 5 minutes to fill in for my two vehicles.

[ANTAUS]

I dont think CR even knows how to evaluate a vehicle. I just read my neighbors CR for this month...they went on to recommend the Saab 95. Yet, everything they stated in the valuation was negative.

 

"it's neither sporty, nor particularly luxurious and refined"

"it performs well enough overall, but lacks polish"

Fuel efficiency isn't particularly impressive, despite having 4 cylinders"

"Realiability has been average"

"The ride is stiff and occupants feel alot of road texture"

"Noise levels are higher than in many carws in the category"

"The 4 cylinder sounds pelasant enough, but is not as smooth as many V6's"

 

Only the brakes received some positive praise...

 

All this and yet they rated it as "Recommended" ?? Based on WHAT?!!

[jpd80]

Makes you think all their opinions are based on someone else's research.

I wonder if they even drove the car.....

[David Johnson]

It would be interesting if someone (JD POWERS, CONSUMER REPORTS) was able to publish the warranty costs per vehicle sold by various manufacturers and model.

 

Per model might be a stretch, but per manufacturer is not too difficult.

 

http://www.warrantyweek.com/archive/ww20060620.html

[Jeff Colgrove]

Sales volume does impact the numbers. SLTS also impacts the numbers. Ford dropped the warranty pay times 30% across the board. They also squeezed the vendors to death so the parts are now cheap. When Ford recalls a part the price drops to nothing.

 

Dont let thier voodoo math fool you. Its all bullshit.

[iantm]

I have an 07 focus hatchback that my wife and I bought back in March. We've been having a problem where the car will not start on an intermittent basis. When I go to turn the key - there's no certainty as to whether it will turn over or not. So I took it to the Ford dealer to have it checked out after ten occurrances to try and find a pattern (there was none). The dealer had it for a day, called me up and said "You can pick up the car. By the way, we didn't do anything to your car. The"Ford acknowledges that there is a problem, and presently advises against performing repairs until a conclusive fix is found. If it happens again - hold down the gas pedal and it should fire right up.".

 

Considering the attitude of "Let's hold off on doing repairs until we have a conclusive fix figured out", it doesn't surprise me that warranty claims are reduced. Unfortunately - frustrated owners like myself are likely on the rise.

[Ron W.]

Sales volume does impact the numbers. SLTS also impacts the numbers. Ford dropped the warranty pay times 30% across the board. They also squeezed the vendors to death so the parts are now cheap. When Ford recalls a part the price drops to nothing.

 

Don't let their voodoo math fool you. Its all bullshit.

 

Bingo.

Also don't forget that although most techs have a sense of honor and a pride in their ability to repair almost anything there are those that will not even make an attempt due to the fact they might spend an hour on a problem and get paid for .3 (18 minutes)