robertlane Posted August 7, 2007 Share Posted August 7, 2007 Ford Motor Co. was able to reduce its warranty costs by $700 million during the first half of the year. The progress came across the board, and was due to Ford’s quality improvements, said Joseph Hinrichs, Ford Motor Co.’s vice president of North America manufacturing. The rest of the article. Quote Link to comment Share on other sites More sharing options...
wescoent Posted August 7, 2007 Share Posted August 7, 2007 Imagine that... if you improve quality to segment-leading levels, your warranty costs plummet. AND your customers are happier. Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted August 7, 2007 Share Posted August 7, 2007 It's good that Ford is making strides on quality. Now they need to advertise this. The majority of people out there, even some Ford fans, still think Ford is building the same junk they built in the 1990s ... Quote Link to comment Share on other sites More sharing options...
ANTAUS Posted August 7, 2007 Share Posted August 7, 2007 SO it's safe to say that good reliability is saving the company $1BIL+ !!! I think thats more than enough reason to continue the improvements. Hmm maybe we can reach $2BIL in savings... Thats about 1-2 vehicle programs right there that can be created from the savings... Quote Link to comment Share on other sites More sharing options...
macattak1 Posted August 7, 2007 Share Posted August 7, 2007 Geeez, That is great news! Great in that they saved that much money. I wonder how much they had to spend to do it? I wonder how much it will gain them? On the other side that is kind of pathetic. $1.4 billion in warranty savings for this year. Just guessing on the number. But it could be much higher. What does that say about what they have building??? Peace and Blessings Quote Link to comment Share on other sites More sharing options...
focus05 Posted August 7, 2007 Share Posted August 7, 2007 Geeez, That is great news! Great in that they saved that much money. I wonder how much they had to spend to do it? I wonder how much it will gain them? On the other side that is kind of pathetic. $1.4 billion in warranty savings for this year. Just guessing on the number. But it could be much higher. What does that say about what they have building??? Peace and Blessings Well, divide $1.4 billion by the approximately 10,000,000 vehicles under warranty (three years of sales plus some longer warranties and used cars) and you get $1,400 per vehicle saved. That's at least two significant repairs. I would bet that some of this is also better accountability with dealers. I wonder if Ford could up their powertrain warranties to 6/100k like GM now and maybe think about 4/50k as a bumper to bumper. I wonder what the incremental cost would be there versus how much it might boost revenues through higher sales, improved brand perception and better residuals (lower leasing costs and improved metrics on certified used car programs). Quote Link to comment Share on other sites More sharing options...
macattak1 Posted August 7, 2007 Share Posted August 7, 2007 Well, divide $1.4 billion by the approximately 10,000,000 vehicles under warranty (three years of sales plus some longer warranties and used cars) and you get $1,400 per vehicle saved. That's at least two significant repairs. I would bet that some of this is also better accountability with dealers. I wonder if Ford could up their powertrain warranties to 6/100k like GM now and maybe think about 4/50k as a bumper to bumper. I wonder what the incremental cost would be there versus how much it might boost revenues through higher sales, improved brand perception and better residuals (lower leasing costs and improved metrics on certified used car programs). Absolutely! Until Ford ups their Bumper to Bumper it is hard for me to take them as serious as I think they should be taken. 3/36 is nothing these days. People put 20k on a year easy. Not sure if their used car warranty repairs fall into this category? I would doubt it. I would think that it is only new sales warranty costs here. But maybe I am wrong. Peace and Blessings Quote Link to comment Share on other sites More sharing options...
tommy8768 Posted August 7, 2007 Share Posted August 7, 2007 Ford cuts warranty expenses-what did they do, slash the labor times they pay their techs again? Quote Link to comment Share on other sites More sharing options...
Furious1Auto Posted August 7, 2007 Share Posted August 7, 2007 I'm doing my part! Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted August 7, 2007 Share Posted August 7, 2007 Absolutely! Until Ford ups their Bumper to Bumper it is hard for me to take them as serious as I think they should be taken. 3/36 is nothing these days. People put 20k on a year easy. Not sure if their used car warranty repairs fall into this category? I would doubt it. I would think that it is only new sales warranty costs here. But maybe I am wrong. Peace and Blessings Who offers a bumper-to-bumper longer than 3/36? Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted August 7, 2007 Share Posted August 7, 2007 Who offers a bumper-to-bumper longer than 3/36? Exactly! I hate to break it to some of you but an extra long warranty does not imply that something is made to last, a car built to last does. A warranty is a piece of mind, not an assurance that something is made to a higher quality standard. Quote Link to comment Share on other sites More sharing options...
akirby Posted August 7, 2007 Share Posted August 7, 2007 Exactly! I hate to break it to some of you but an extra long warranty does not imply that something is made to last, a car built to last does. A warranty is a piece of mind, not an assurance that something is made to a higher quality standard. A warranty is nothing more than an insurance policy - the cost is simply overhead that has to be built into the business case. You can put a lifetime warranty on a piece of junk if you can afford to pay for it. Quote Link to comment Share on other sites More sharing options...
2005Explorer Posted August 7, 2007 Share Posted August 7, 2007 (edited) It is time for them to increase their warranty to a 5/60 (6/70 on Lincoln) bumper to bumper. It would show total confidence in their product and a warranty like that would really drive sales because people would give Ford a chance knowing that they back their product. It may not be an assurance that the product is better, but people will give the product a chance if they know they are covered. The quality is getting to a level where Ford could afford to do it. Edited August 7, 2007 by 2005Explorer Quote Link to comment Share on other sites More sharing options...
macattak1 Posted August 7, 2007 Share Posted August 7, 2007 (edited) Hyundai offers a 5 year unlimited on top of their 10/100k. Maybe the B2Bs don't need to be too long. But if they are not going to do that then they sure could bump up their pwt warranty. Give me at least 7/75k or something like that. Excluding Chrysler, the longer the warranty the more perceived value the product has and the greater perceived expectations the Mfg has in the auto. It is not so much a case that the extended warranty being overhead but that they sell extended warranties for a F350 diesel for $2500 that Ford only charges the dealer about $1000 and the rest is profit to the dealer. A long warranty does not imply quality? OK, then No warranty sounds like it would be just fine with you? No warranty would not imply Junk right? Or, you could just be taking the opposite position for fun. If I asked 100 people if they would rather have a 4/50k B2B over a 3/36 I think I know their answer. Even if the cost goes up by $100 for the auto I know their answer. That is only 16k more miles but a whole lot of perception change. Heck, Ford wont even match GMs pwt warranty. It is all part of the Big picture and perception is the single biggest factor. Toyota got to where it did by improving quality, good pricing, growing number of models, nice looking dealerships, matching others mfgs in everything, etc. By basically having a higher perceived value. No one thing is going to save Ford. The safety of their cars means little if they are boring. The quality of the cars means nothing if they don't show that they believe in their own quality. Its all a piece of the puzzle. Toyota has more of those pieces and better aligned over the last 10 years. For Ford to grow, they have to show that they are not able to compete with the best, but that they are with out doubt one of the best. otherwise they are just Ford. Peace and Blessings Edited August 7, 2007 by macattak1 Quote Link to comment Share on other sites More sharing options...
2005Explorer Posted August 7, 2007 Share Posted August 7, 2007 Hyundai offers a 5 year unlimited on top of their 10/100k.Maybe the B2Bs don't need to be too long. But if they are not going to do that then they sure could bump up their pwt warranty. Give me at least 7/75k or something like that. Excluding Chrysler, the longer the warranty the more perceived value the product has and the greater perceived expectations the Mfg has in the auto. It is not so much a case that the extended warranty being overhead but that they sell extended warranties for a F350 diesel for $2500 that Ford only charges the dealer about $1000 and the rest is profit to the dealer. A long warranty does not imply quality? OK, then No warranty sounds like it would be just fine with you? No warranty would not imply Junk right? Or, you could just be taking the opposite position for fun. If I asked 100 people if they would rather have a 4/50k B2B over a 3/36 I think I know their answer. Even if the cost goes up by $100 for the auto I know their answer. That is only 16k more miles but a whole lot of perception change. Heck, Ford wont even match GMs pwt warranty. I agree completely with what you are saying. If tomorrow Ford said...our 5/60 will become a bumper-to-bumper that would shake the industry a hell of a lot more then the GM powertrain did or the Chrysler lifetime (with limitations) warranty. Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted August 7, 2007 Share Posted August 7, 2007 Where did I say anywhere in my post that not offering a warranty is acceptable? Lets not put words into my post. Ford could offer a warranty from now to the end of time, but if the product they are offering sucks or is built horribly no one would give a damn. Hyundai has offered their industry leading warranty for quite sometime, but they are still attempting to over come the stigma of the Hyundai logo. Citing that as an example it just goes to show you how product offering and brand preception go a long way to keeping away potential buyers. Are there people out there that have purchased Hyundais/Kias because of the warranty, well yes.........but until someone is able to find some hardcore diffinitive information, I'm not sold. If Honda and Toyota have gotten away with the warrantys that they have, due to their product offering being 'solid' and 'reliable' then I fail to see why Ford has to follow suit. If anything in the import buyer world, a longer warranty might imply that Ford still isn't up to snuff from a quality/durability perspective hence the reason behind the longer warranty. Quote Link to comment Share on other sites More sharing options...
macattak1 Posted August 7, 2007 Share Posted August 7, 2007 I agree completely with what you are saying. If tomorrow Ford said...our 5/60 will become a bumper-to-bumper that would shake the industry a hell of a lot more then the GM powertrain did or the Chrysler lifetime (with limitations) warranty. Or why not leave the Ford a 3.36. But put the Mercs at 5/50 and the Lincolns at 7/75? I mean, if they want Merc and Lincoln to grow it can not only be done via product as their product is the same to such a historically great extent. Time to differentiate the 3 on more than just one makes more Black sedans than the others. Since Merc and Lincoln are not selling much volume it cant hurt that much if it does. Besides, then all things being equal, the same Ford product has a higher perceived value even with a lower B2B than the others. Same engine, parts, etc. Same perceived value. First thing a Toy sales person tells you is the the Hylander has the Lexus PWT in it! Wooooohoooooooo. And how many people fall for that? A whole bunch of them because Lexus, even with their ES350 challenges, is a great perceived value. If Merc and Lincoln were better percieved values then Ford would be lifted by that as well. Seriously. Why would I pay $20k more for a Lincoln Fusion than a Ford Fusion? That is not great perceived value. Peace and Blessings Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted August 7, 2007 Share Posted August 7, 2007 Or why not leave the Ford a 3.36. But put the Mercs at 5/50 and the Lincolns at 7/75? I mean, if they want Merc and Lincoln to grow it can not only be done via product as their product is the same to such a historically great extent. Time to differentiate the 3 on more than just one makes more Black sedans than the others. Add a complete maint. package, similar to BMWs, on all Lincolns and there you go. Quote Link to comment Share on other sites More sharing options...
ANTAUS Posted August 7, 2007 Share Posted August 7, 2007 Instead of adding rebates which can diminish the cars value and hurt depreciation, I say it's positive to add a longer warranty. It's perceived as a better value...and really, if the vehicles have better quality now, what will it hurt to do so ? One of the big 2.5 will have to take that route at some point, and naturally the others will follow. My past 3 LS's had maintenence package included for the first year, but I believe that died last year. Really, how much were those 2 scheduled visits could have cost? BMW keeps tauting it has it's maintenance package on it's new vehicles. Quote Link to comment Share on other sites More sharing options...
macattak1 Posted August 7, 2007 Share Posted August 7, 2007 Where did I say anywhere in my post that not offering a warranty is acceptable? Lets not put words into my post. Ford could offer a warranty from now to the end of time, but if the product they are offering sucks or is built horribly no one would give a damn. Hyundai has offered their industry leading warranty for quite sometime, but they are still attempting to over come the stigma of the Hyundai logo. Citing that as an example it just goes to show you how product offering and brand preception go a long way to keeping away potential buyers. Are there people out there that have purchased Hyundais/Kias because of the warranty, well yes.........but until someone is able to find some hardcore diffinitive information, I'm not sold. If Honda and Toyota have gotten away with the warrantys that they have, due to their product offering being 'solid' and 'reliable' then I fail to see why Ford has to follow suit. If anything in the import buyer world, a longer warranty might imply that Ford still isn't up to snuff from a quality/durability perspective hence the reason behind the longer warranty. Hmmm, I find it odd when people jump to '...putting words in my mouth' type statements. What does "Exactly!" at the start of your post mean? You wrote it. I read it. MY perception is that you are clearly showing your position and that your position is that longer warranties do little to nothing and just cost more to the MFG. Now, if you notice my statements you will see ?'s at the end of them. Meaning that I am Not putting words in your mouth. I am asking you questions, yes, with implications, but still questions. Even rhetorical questions. But still questions. And they are not even entirely directed towards you, but anyone that thinks longer warranties for Ford would do little to nothing. It is then not a far reach at all to state that if longer is not better than little to none would not be worse. That is, unless there is some universal metaphysical perfection to the 3/36 warranty that I am unaware of? Peace and Blessings Quote Link to comment Share on other sites More sharing options...
macattak1 Posted August 7, 2007 Share Posted August 7, 2007 Add a complete maint. package, similar to BMWs, on all Lincolns and there you go. That was my next point. I did sea these as I was looking for longer B2Bs. Yea, BMW and such give free Maint. for 3/36, even 4/50. But frankly, I don't care about that. I may want to do it myself. I may be out of town when I need it done. I may be in a hurry and need it done on my side of town or somewhere faster. All sorts of reasons. Heck, the town of 90k I live in has tons of MBs but the closest dealer is 60 min away? What good does that do me? Also, there is not much to the 15k, 30k, 50k mi inspections anymore. So much runs to 100k with out even looking at. Further, I don't know if I want to go in and deal with these guys regularly? Do I want to see my sales person every 3000 mi? I would much rather have a strong warranty that I wont have to use than a service contract. Peace and Blessings Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted August 7, 2007 Share Posted August 7, 2007 Alright, well it wasn't putting words into my post (couldn't put them in my mouth because I'm not speaking I'm typing). My apologies: A long warranty does not imply quality? OK, then No warranty sounds like it would be just fine with you? No warranty would not imply Junk right? Or, you could just be taking the opposite position for fun. That was just a silly assumption/question on your part. Anyhow, what I am arguing is that I doubt a longer warranty will be the silver bullett putting Ford above the rest of the competition out there. Again if the product offering is abysmal then a longer warranty won't do jack to pull new buyers into the showroom. Which brings me back to Honda and Toyota, both companies offer warranties that trail quite a few of their primary competition......and even with that being the case you don't get their customer base (which is ever growing) demanding more protection. If you build it right the first time and continuously improve in areas where you are defficent, the idea of a longer warranty simply takes a back seat. Case and point, Chrysler's new minivans will carry the lifetime warranty, which is great good for ChryCo........but what do you think shoppers will look at first a foremost? A Badge. Quality. Pricing. Efficency. Performance (well maybe), areas in which the Odyssey (a segment leader) have all but the most expensive Caravans beat. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted August 7, 2007 Share Posted August 7, 2007 Excluding Chrysler, the longer the warranty the more perceived value the product has and the greater perceived expectations the Mfg has in the auto. Yes. I'm sure the perceived value on a Kia Amanti exceeds that of the Toyota Camry because it has a longer warranty. :rolleyes: Quote Link to comment Share on other sites More sharing options...
Furious1Auto Posted August 7, 2007 Share Posted August 7, 2007 (edited) Exactly! I hate to break it to some of you but an extra long warranty does not imply that something is made to last, a car built to last does. A warranty is a piece of mind, not an assurance that something is made to a higher quality standard. That's exactly what the implication is, although it's not reality. It eventually will be an incentive for the manufacturer to build better quality to reduce the liability of their warranty work! Edited August 7, 2007 by Furious1Auto Quote Link to comment Share on other sites More sharing options...
Michael Reynolds Posted August 7, 2007 Share Posted August 7, 2007 That was my next point. I did sea these as I was looking for longer B2Bs. Yea, BMW and such give free Maint. for 3/36, even 4/50. But frankly, I don't care about that. I may want to do it myself. I may be out of town when I need it done. I may be in a hurry and need it done on my side of town or somewhere faster. All sorts of reasons. Heck, the town of 90k I live in has tons of MBs but the closest dealer is 60 min away? What good does that do me? Also, there is not much to the 15k, 30k, 50k mi inspections anymore. So much runs to 100k with out even looking at. Further, I don't know if I want to go in and deal with these guys regularly? Do I want to see my sales person every 3000 mi? I would much rather have a strong warranty that I wont have to use than a service contract. Peace and Blessings Well you may not care, but are you Lincoln's target audience. Afterall Lincoln is trying to pass as a lux brand, and offering any and everything (within reason) to appease their customers goes a long way. When you spend a bit more money on something you expect a bit more out of it, which is why I suggested it in the first place. All of the reasons you listed are all fine and dandy, but when it comes right down to it that sort of warranty is a convience and a means for the manuf. to quality control the maint. performed on major wear and tear items. Thus improving the ownership expeirence over the long term. Quote Link to comment Share on other sites More sharing options...
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