At Ford, Quality is Now Problem 1 In May 2022, Ford recalled some Ford Expeditions and Lincoln Navigators after reports of fires while vehicles were parked. In June, it recalled 49,000 Mustang electric SUVs over concerns that the battery contactors could overheat. In the first 7 months of that year, Ford had 46 separate safety recalls on 6.8 million vehicles, more than any other U.S. auto maker. Part 2 Once touted for its quality record"Quality is Job 1" was its

was its slogan for much of the 1980s and

1990slast

year Ford set aside more than $4 billion for warranty costs, up 76% from 5 years earlier. Those billions that Ford spends yearly on warranty repairs and recalls could instead have gone towards spending for new EV models, and battery and manufacturing plants.

Part 3

In 2021, Ford allocated $1,041 per vehicle for covering warranty claims compared with $713 per vehicle for rival GM. This year, in addition to the recalls, auto-safety regulators also opened a defect investigation into 2021 Ford Broncos after receiving reports of "catastrophic engine failures" at highway speeds.

Part 4

One of the challenges at Ford was that it tried to make too many last-minute design and engineering changes ahead of a new-vehicle launch, increasing the risk of problems down the line. Workers rallied to fix problems when they blew up, but weren't empowered to flag them early in the process when there was still time to head them off. Consumer Reports says Ford has too many new-model launches bunched together and often makes more substantive changes in its redesigns, while other car companies use more carry-over parts.

Part 5

Ford recently installed video cameras to monitor the early build of

vehiclesbefore

productionto

target any steps they can eliminate or simplify. Higher tech cameras are now used to inspect the vehicles for quality, too, allowing workers to scour for an incorrectly placed hose or a paint blemish. "We are placing more time and emphasis on ensuring everything is done right upfront to prevent quality issues from manifesting later in the development process," says Ford's new quality czar.

Part 6

How Ford compares itself to rivals in quality has changed, too. It now sets its quality targets against the benchmarks of its competitors. One example is the quality of Ford's Bronco SUV as compared with the Jeep Wrangler.

Source: The Wall Street Journal (August 6-7, 2022).

Part 7

Critical Thinking Questions

1. What appears to be causing many of Ford's quality problems leading to high warranty costs?

A.

supply chain issues

B.

nobody in charge of quality control

C.

too many design changes

D.

bad tires

E.

poorly trained workforce

Part 8

2. In 2021, approximately how much more did Ford allocate per vehicle for warranty claims than General Motors?

A.

146%

B.

76%

C.

46%

D.

328%

E.

32%