Ford CEO Farley Regrets Not Tackling Quality Issues Sooner

[ice-capades]

Ford CEO Farley Regrets Not Tackling Quality Issues Sooner

https://fordauthority.com/2024/02/ford-ceo-farley-regrets-not-tackling-quality-issues-sooner/

 

 

It’s no secret that Ford has faced plenty of quality woes over the past few years, ones that made it the most recalled automotive manufacturer in the U.S. in 2023. Ford CEO Jim Farley is well aware of this fact, noting that the company has made improving quality a priority, and proceeding to set varying “best-in-class quality” targets for its vehicle lineup in that regard. Farley previously blamed this downward trend on corporate inefficiencies that disappeared and wound up growing back, and chairman Bill Ford later noted that he’s pleased with the actions the company’s CEO has taken to right the proverbial ship. However, while speaking at the recent 2024 Wolfe Conference, Farley admitted that he didn’t act aggressively enough – or perhaps soon enough – to rectify these problems before they grew.

 

“So, in line with that, I wished I had had the same laser focus on transforming our industrial system,” Farley said. “The capability atrophy in engineering, supply chain and manufacturing in Ford, John and I talk about this every day was much more – needed a much more fundamental reset than I had realized. And if I had – if we had approached same vigor that we restructured and got out of India, restructured South America, restructured China, restructured Europe, if we had approached, as a management team, tackling the industrial system at Ford the same vigor, and is actually a quite different execution, would have required a quite different execution. It’s not just getting rid of people – we’ve got rid of 20,000 people – it wasn’t that. It’s a totally different muscle.”

 

“I think you would have a much stronger Ford. We would have a much stronger base. The irony of that, though, is that if we had done that quicker, would we have really trusted that organization to disrupt itself like we have? I think one of the biggest gifts, turns out one of the biggest gifts the management team has given ourselves, is the small skunkworks team, who really came up with a way of executing an affordable platform with a completely different orientation that my industrial team would have never been able to do. So it’s not perfect, but, yes, I think we all have regrets. And that’s a big one for me. So a humbling thing.”

 

This admission comes on the heels of Farley noting that it could take a number of years to completely correct Ford’s quality woes, though that process is already underway. In fact, starting with the launch of the redesigned 2023 Ford Super Duty, the automaker began shutting down production when it identifies a problem, then proceeding to fix it before restarting assembly lines – a process that has since been emulated with multiple new vehicle launches.

Edited February 19 by ice-capades
Additional Content

[akirby]

16 minutes ago, ice-capades said:

the automaker began shutting down production when it identifies a problem, then proceeding to fix it before restarting assembly lines – a process that has since been emulated with multiple new vehicle launches.

Oh you mean the way Japan has been doing it for over 50 years.  What a concept.

 

Good to see he recognizes lack of engineering talent as a big contributor.

[ice-capades]

The quality issues at Ford go back decades. It's been addressed repeatedly in marketing campaigns including the "Quality is Job #1" campaign that was used for so many years, but the reality is that little has changed so far overall. All too often over the years, management at different levels have tried the "Ford Has a Better Idea" approach with little results up to today. Ford has gotten more serious about the quality issues with delivery holds on certain models to address quality issues before releasing vehicles for shipment to Dealers. It appears that recent actions have helped address and improve the quality issue, but it's still early in the process regarding the quality issues to decide whether the actions taken will be successful long term. Hopefully, Ford is turning the tide on the quality issues, and they'll finally benefit from the warranty cost savings.            

[silvrsvt]

The other issue is with sub manufacturers...even back in the visteon days the plant my dad worked at used to get wiring harnesses in and they have to throw away a significant amount of them because they where screwed up. Even in my other jobs I've worked at the biggest issues I've seen have been supplier issues and not design issues (though I have seen some dumb decisions done there too)...so that is another angle to this issue. 

[Bob Rosadini]

" It’s not just getting rid of people – we’ve got rid of 20,000 people "– 

What does Farley mean by this?  The subject is "quality" isn't it? His statement relates to cost reduction.  If anything might that be part of the problem?  In particular if in that head reduction, senior people are targeted if they are at the higher end of the salary range for a particular job classification.  No doubt,  senior people who are on "cruise control" should go, but I would have to believe head count reduction can have negative consequences when talent leaves the system.

[Captainp4]

I like the "laser focus" shout out to Mulally, even if it wasn't intentional lol

[mackinaw]

49 minutes ago, Bob Rosadini said:

" It’s not just getting rid of people – we’ve got rid of 20,000 people "– 

What does Farley mean by this?  

 

I took it to mean they've eliminated layers of useless bureaucracy.

[fuzzymoomoo]

26 minutes ago, mackinaw said:

 

I took it to mean they've eliminated layers of useless bureaucracy.

they did?

[Bob Rosadini]

51 minutes ago, mackinaw said:

 

I took it to mean they've eliminated layers of useless bureaucracy.

Ok, hopefully that is what he ment..although Fuzzy isnt so  sure of that

35 minutes ago, fuzzymoomoo said:

they did??

 

[DeluxeStang]

At least it's improving. Aside from explorer, and maybe escape, most of the Ford products being built now seem to have decent quality. 

[Captainp4]

15 minutes ago, DeluxeStang said:

At least it's improving. Aside from explorer, and maybe escape, most of the Ford products being built now seem to have decent quality. 

I couldn't come up with an answer I felt confident in for your other thread that doesn't have a caveat with it.

[tbone]

1 hour ago, DeluxeStang said:

At least it's improving. Aside from explorer, and maybe escape, most of the Ford products being built now seem to have decent quality. 

The dealer picked up our 2023 Escape for a recall on screen replacement. Other than that, though, the build was quality has been very good.

[tbone]

3 hours ago, silvrsvt said:

The other issue is with sub manufacturers...even back in the visteon days the plant my dad worked at used to get wiring harnesses in and they have to throw away a significant amount of them because they where screwed up. Even in my other jobs I've worked at the biggest issues I've seen have been supplier issues and not design issues (though I have seen some dumb decisions done there too)...so that is another angle to this issue. 

imagine if you were Boeing. In my opinion, they have subcontracted out way too many things, and they appear to be currently feeling the impact of that.

 

Imagine if Ford could save money on warranty costs enough that they can stop trying to save money through decontenting.  

Edited February 19 by tbone

[mackinaw]

1 hour ago, Bob Rosadini said:

Ok, hopefully that is what he ment..although Fuzzy isnt so  sure of that...

 

Ford went from 202,000 employees in 2017 to 173,000 employees in 2022.  They added 4,000 employees in 2023.

 

https://www.macrotrends.net/stocks/charts/F/ford-motor/number-of-employees

[DeluxeStang]

4 hours ago, Captainp4 said:

I couldn't come up with an answer I felt confident in for your other thread that doesn't have a caveat with it.

I mean, most of Ford's trucks and crossovers are pretty reliable, as is the mustang. 

[Trader 10]

9 hours ago, silvrsvt said:

The other issue is with sub manufacturers...even back in the visteon days the plant my dad worked at used to get wiring harnesses in and they have to throw away a significant amount of them because they where screwed up. Even in my other jobs I've worked at the biggest issues I've seen have been supplier issues and not design issues (though I have seen some dumb decisions done there too)...so that is another angle to this issue. 

But other manufacturers are apparently having far less issues with sub manufacturers than Ford which would indicate more of a design issue and/ or not allowing subs to make reasonable returns to insure better quality. 

[jpd80]

Making and selling vehicles is a license to print money, I cannot believe Ford’s continuing propensity to self harm.

The Ford brass need to do a cost analysis to realise how much profit they throw away thanks to poor choices

and then actually do something about it.

 

Edited February 20 by jpd80

[akirby]

8 hours ago, Trader 10 said:

But other manufacturers are apparently having far less issues with sub manufacturers than Ford which would indicate more of a design issue and/ or not allowing subs to make reasonable returns to insure better quality. 

Some of it is definitely design like the original Bronco hard tops made by Webasto.  It was too difficult to build reliably at volume but Webasto was also at fault for not pointing this out (maybe they didn’t realize it but that’s their business to know).  But Ford also shortcut the testing process to get them out the door.  
 

I think the biggest problem with Ford and their suppliers is they squeeze them too much on cost.  Imagine if they had given 1/4 of the $2B they spent on warranty costs recently to the suppliers up front.  It takes discipline to spend the money up front and not be tempted to cut corners.

[silvrsvt]

1 hour ago, akirby said:

I think the biggest problem with Ford and their suppliers is they squeeze them too much on cost.  Imagine if they had given 1/4 of the $2B they spent on warranty costs recently to the suppliers up front.  It takes discipline to spend the money up front and not be tempted to cut corners.

 

Or companies taking the work and wanting to maximize profits and  cut corners. 

 

What it boils down to is that its a process and not purely a design issue by Ford. 

[tbone]

1 hour ago, silvrsvt said:

 

Or companies taking the work and wanting to maximize profits and  cut corners. 

 

What it boils down to is that its a process and not purely a design issue by Ford. 

This is why it’s paramount to have a strong relationship with your suppliers, so they don’t do stuff like that. I think it boils down to Ford paying a sub an amount to make a reasonable profit while having trust that they will bill a quality product. It’s a partnership, and shouldn’t be adversarial, kind of like how their relationship with UAW SHOULD be.  Trying to extract every penny out of their supplier Doesn’t lend itself to to a good relationship.  You can argue business is business, but that’s not exactly true when building relationships. Hopefully we will see some improvement on the supplier relationship index over the next couple years.

[paintguy]

Too often, quality is relegated to a program or campaign of limited duration. Japanese companies just have it as a way of doing business. Ford culture also has a habit of rewarding reporting of "Green Status" for new model programs and systems. Mulally tried to rid this tendency. Backsliding after his departure was rapid. Launches reported at green status, when it was anything but. Suppliers and contractors were all but forced to indulge the fantasy.  Cost reduction goals have led suppliers to cut corners and have Ford engineers accept to meet a target. Then leave it  for the assembly line to make it work.

 

[akirby]

1 hour ago, paintguy said:

Too often, quality is relegated to a program or campaign of limited duration. Japanese companies just have it as a way of doing business. Ford culture also has a habit of rewarding reporting of "Green Status" for new model programs and systems. Mulally tried to rid this tendency. Backsliding after his departure was rapid. Launches reported at green status, when it was anything but. Suppliers and contractors were all but forced to indulge the fantasy.  Cost reduction goals have led suppliers to cut corners and have Ford engineers accept to meet a target. Then leave it  for the assembly line to make it work.

 

As I’ve said before, you have to make it more painful to have a problem make it to production than it is to miss cost and date commitments.   Farley making quality a 70% factor is a good first step.

[grbeck]

There are several aspects of quality. There is workmanship (build quality), short-term quality and long-term quality (i.e., reliability). 

Based our on our ownership experiences, Ford needs to make sure long-term quality is consistently good. Our 2005 Focus SE sedan was a beast - went 235,000 miles with only two major problems (alternator went at about 130,000 miles and idle air-control valve soon after that). The engine and transmission were fine when we traded it, and the air conditioning still blew ice-cold air. And my wife didn't baby that car. If anything, I had to repeatedly remind her to schedule regular maintenance for that car.

 

The Focus was so good that, without hesitation, we traded it on an off-lease 2014 Escape SE that had only 4,000 miles on the odometer. At 95,000 miles the radio head unit failed completely, and the automatic transmission went out completely at 113,000 miles. (Our experience was not unique - the transmission in a friend's 2014 Escape failed at 75,000 miles!) It also took the dealer seven months to get a replacement transmission. That has soured my wife on Ford. I like the new Explorer - particularly the 2025 model - but I haven't been hearing consistently good things about those. 

[DeluxeStang]

24 minutes ago, grbeck said:

There are several aspects of quality. There is workmanship (build quality), short-term quality and long-term quality (i.e., reliability). 

Based our on our ownership experiences, Ford needs to make sure long-term quality is consistently good. Our 2005 Focus SE sedan was a beast - went 235,000 miles with only two major problems (alternator went at about 130,000 miles and idle air-control valve soon after that). The engine and transmission were fine when we traded it, and the air conditioning still blew ice-cold air. And my wife didn't baby that car. If anything, I had to repeatedly remind her to schedule regular maintenance for that car.

 

The Focus was so good that, without hesitation, we traded it on an off-lease 2014 Escape SE that had only 4,000 miles on the odometer. At 95,000 miles the radio head unit failed completely, and the automatic transmission went out completely at 113,000 miles. (Our experience was not unique - the transmission in a friend's 2014 Escape failed at 75,000 miles!) It also took the dealer seven months to get a replacement transmission. That has soured my wife on Ford. I like the new Explorer - particularly the 2025 model - but I haven't been hearing consistently good things about those. 

I'd recommend an escape hybrid for your wife. Escape hybrids are notoriously reliable, some would say even more reliable than your old focus. 

 

I believe Farley say Ford is aiming to have long term quality that's on par, or superior to Toyota and Honda. He mentioned that in their latest earnings call unless I'm mistaken. But I do agree with you. Short term quality is nice, but I want Ford to be the go to brand when it comes to cars that are considered reliable even when they have 200k miles on them. 

 

I wouldn't be surprised if that's the reputation some Ford models in a few decades, the maverick is already seen as the spiritual successor to the 90s rangers, including in the reliability department. So it's not all bad. It sounds things are turning around. Hacket did a lot of damage to the company imo, and that includes quality, but Farley seems determined to right the ship. Good guy, the best leader Ford's had in decades imo. 

[paintguy]

6 hours ago, akirby said:

As I’ve said before, you have to make it more painful to have a problem make it to production than it is to miss cost and date commitments.   Farley making quality a 70% factor is a good first step.

Agree 100%. One of the best plant managers I had used to say of launch: "You find a problem early in the build, it might cost $100 to fix. After Job1, $1 million might not fix it". Agree Farley is moving in a correct direction. Hope the next levels of management get the quality focus hard wired into their DNA.