New Ford CEO Jim Farley is tasked with righting the financial ship at the iconic automaker, a daunting task considering the fact that 2020 has been one of the most challenging years any organization has faced. Things are looking up, however, as Ford managed to beat Wall Street expectations by reporting a third-quarter profit of $2.4 billion on revenues of $37.6 billion as the CEO revealed his future plans for the automaker. Now, Farley is looking to reduce costs moving forward, a process that includes curbing warranty costs.
“Our warranty coverages in the last few years is up $1 billion to $2 billion depending on the year, and that is not okay,” Farley said during a recent analyst call. “So, although it moderated in the (third) quarter and we have taken a lot of actions on craftsmanship, long-term durability, we have a much bigger ambition to improve the quality of our vehicles. We have taken a lot of countermeasures. They will take time.”
“We’re moving with urgency to turn around our automotive operations, improve our quality, reduce our cost, and accelerate the restructuring of underperforming businesses,” Farley continued. “And third, we are going to grow again, but in the right areas – allocating more capital, more resources, more talent to our very strongest businesses, and vehicle franchises.”
Farley’s emphasis on lowering warranty costs is particularly important as the automaker prepares to launch a host of new products including the 2021 Ford F-150, 2021 Ford Mustang Mach-E, 2021 Ford Bronco, and 2021 Ford Bronco Sport.
“These are fantastic opportunities for us on the top line for the next many years to come,” Farley said, adding that Ford’s North American profit margins could top 10 percent.
We’ll have much more on Jim Farley’s plans to right the financial ship at Ford very soon, so be sure and subscribe to Ford Authority for the latest Ford business news and around-the-clock Ford news coverage.
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Jim Farley needs to focus on Sedans for Ford and Lincoln brand
On the contrary, he needs to focus on profitability and growth. It's just not there for sedans these days. At some point in the future, the pendulum may swing back, especially if energy prices surge. But for now, SUVs and trucks are the products that drive the top and bottom lines.
My Escape has had a roof leak since purchase. Ford does not back their vehicles!! Manfacturing defects are the responsibility of the owner!! I plan on buying more vehicles in my lifetime and guarantee none will be Fix Or Repair Daily!! Ford sells garbage and doesn't back their product!! I am a CAW member!!
I can attest to their poor quality. The 10 speed automatic on my 2020 Mustang was a mess. Harsh jerky shifts and a huge jerk when going into reverse. Worst automatic I’ve ever owned. Ford can’t fix it. They update the software and it’s a lot better for a few days then rapidly goes downhill again. Pathetic for a transmission they’ve been making 3 years!
Strut bearings also needed replaced at 14k miles. Rear window didn’t roll up fully. And driveline had a vibration between 50 and 70 mph. Body fits also not up to standard. I traded it off already. Done with Ford.
Thank goodness we have a genuine car guy back on top of the company. Now hold accountable the executives responsible for allowing quality to slip...yet again. What about you Bill Ford? Why did this happen under your watch? You’ve seen this before, after you cleaned things up post Jack Nasser era?
I have a 2020 Ford Explorer ST and having transmission problems also Ford is giving me the run around. I should of brought a Toyota Highlander can’t believe Ford is doing this .
I am excited by Fords future. But note quality issues. I rented a Mustang in March. Was surprised by gaps in door panels, window closing etc. And F150 interiors are Transformer plastic like. Need some detailed attention to design and quality.
The Focus and Festiva 6 speed dry clutch transmissions were a warranty mess with many owners going through multiple clutch packs, Ecoboost engine failures due to coolant leaks on the 1.6 and 1.5 liters were more than should happen. There was many fit and finish issues with the 2020 Escape and 2020 Explorer. The Explorer roundly gets poor marks for the quality of the interior in car magazines reviews. Our 2018 Edge and 2018 Ecosport had been fine though. Always buy a extended Ford ESP plan to play it save if you keep your cars a long time.
The Festiva was made in Korea by Kia. Were you referring to the Fiesta? I have 2. No issues.
My 2020 Raptor.. wish I had never bought it. The 10R80 transmission is absolute garbage. I just had a new transmission installed two days ago and a new valve body three weeks before that. It actually runs worse now.
I owned a 2018 F150 before my raptor and the drive line vibration was unbearable... I should have kept my Tundra I owned before buying Ford again.
I think that the phrase, "reducing costs" and "increasing reliability" may run counter to one another in many areas. The above examples mention a few, but as a current platform Mustang owner, the disturbing answer supposedly offered by the company as to why they opted for the MT82 6 speed manual instead of another unit like say the Tremec in the GT 350, was that they were trying to keep the base cost of the car below the Chevy Camaro.
If this in fact true, and I'm not sure it is, I would then ask one simple question...why? You have a sub-brand that is by far well above in notoriety in it's category to any competitor in name recognition and historical mystic. Instead of worrying about beating price points of "competitors", why not concern yourselves with make the best in category? I'm sure most would rather pay a few dollars more for the best experience, than worry about how many total units a model sells. Why not focus more on the customer experience...that's ultimately what make the brand. Stop looking at yourselves as the "also ran", and start looking at yourselves as the "only ran".
I think Ford loses interest in thier customers after the sale.. complaints abound all over the internet about many of these problems and law suits have been filed but Ford seems apathetic at best in resolving these problems. I grew up on Ford and the management in recent years has been awful..
Bill Ford was the equivalent of the coaches son being quarterback even though he has a spaghetti arm and can't learn the plays.. I'm disgusted
They finally figured out why Japanese vehicles were outselling them and that’s quality. Better quality leads to less warranty. duh Ford. What took you so long?
My sentiments exactly… dah
Build better vehicles all way around and thus reduce warranty cost. Plain & Simple!!!
I have owned Ford products most of my driving life. Only car I owned that wasn't a Ford or Mercury was Plymouth Sundance, which was a very good car too. I currently have 2018 Taurus and haven't experienced any issues yet. Throughout the years every care except one was an improvement over the last. That one was an 82 Granada. My 2000 Cougar went 15 years with factory installed original equipment; except break pads, tires and filters. Even the hoses and belts lasted 17 years and 210k miles. I am very surprised to read these comments about problems.