As Ford Authority recently reported, Ford stock tumbled dramatically last week following the release of the automaker’s Q2 financial reports, which were disappointing for a number of reasons. FoMoCo’s adjusted profit of 47 cents per share was far below analyst expectations of 68 cents, but perhaps a bigger concern stems from swelling warranty costs – which grew by $800 million compared to Q1 2024, leading to a massive impact on profits. Now, CEO Jim Farley has provided some insight as to what drove that substantial increase in warranty costs.
“The other thing we maybe made it more difficult in a way, but better for the company fitness-wise, is we put a lot of new technology in our vehicles,” Farley said during Ford’s Q2 earnings call with investors. “And that new technology is difficult for the dealers to diagnose when customers come in and say something is wrong with my SYNC system.”
“They replace modules unnecessarily, et cetera, and that hits our warranty reserves. What we’ve found though is that this kind of fixing is different than mechanical fixes, where that OTA capability redirected to these defects can really reduce our cost outlays for the warranty…against the warranty reserves. And we’re working all of those cost curves every day for each of our models.”
Looking ahead, Ford still expects to hit its warranty cost targets for the entirety of 2024, in spite of this massive jump, but it’s not terribly surprising that investors are a bit skeptical, regardless. However, there are some signs that the automaker’s quality is improving, as it ranked above the segment average in the recently-released J.D. Power 2024 U.S. Initial Quality Study, and Farley himself recently stated that the 2024 Ford lineup has better initial quality versus 2023 and prior, too.
We’ll have more on Ford’s warranty costs soon, so be sure and subscribe to Ford Authority for ongoing Ford stock news and around-the-clock Ford news coverage.
Comments
Maybe proper training for techs ahead of introducing new tech would be a positive step to prevent unnecessary parts replacements. Additionally SYNC has nothing to do with the 10 speed transmission failures going in several models that are often repeat failures costing thousands of dollars with each failure plus the repeated cam phaser failures that are also ongoing, another big bucks repair.
Is that the same transmission that also goes into the Camaros? Are they having similar problems?
The thing is the Camaro’s aren’t having 10speed auto transmission issues Ford is it seems GM got it right with there 10spd’s I don’t know what the heck ford is doing 😂🤣
Blame his people for bringing out tech products that are FLAWED form the beginning!
All about the $$$$ for parts & repair at the stealership.
Wait until Ford has to replace all eco boost engine from 2016 to 2019. I was a Ford man until I bought a poorly designed eco boost 2.0 engine. It failed right after warranty and Ford said too bad. I’m glad that they have so many class action lawsuits against them. I would still be a Ford man if they would have done what is right and replace the junk designed engines and say yes it was a poor designed. But oh no they hire teams of lawyers to try to escape paying. We are now a Toyota family, and hate to say,but will never buy from big 3 again. Toyota does what is correct when they design poorly.
Hope that you do not own one of 102,000 V35A V6 engines that need to be totally replaced, or, one of 280,000 Toyota transmissions that are being recalled. My 2017 Lincoln MKT w/ 114,000 miles continues to roll on with no isses save for normal maintenance.
Oh don’t worry Joe that internal water pump is about to go any day now 😂🤣. I’ll still take a Toyota with the debris in there 3.5TT over a 3.5 Ecoboost any day they still having Timing chain stretching issues VVT issues, ford is just string you along until the warranty is done . Then your done being loyal to a car manufacturer makes no sense .
Doubt your wonderful MKT will make to 200,000 miles without any major breakdowns, Toyotas and Hondas usually go well over 200,000 miles before any major breakdowns.
It’s like I’ve said before if you got shanked by ford and no satisfaction, you will go somewhere else and buy a competitors vehicle,once you leave you will NEVER COME BACK.doesnt take brain surgery to figure that out,Harvard boys need to have common sense, but never taught that at university.
4 years and no improvement under Farley. As is his history he is much better at talking a good story than actually executing. How much longer will this be tolerated?
He should be living in a van down by the river lol
The reason for POOR QUALITY and profit loses lies in the lap of a CEO with the name of Jim Farley. The man making the big bucks and unwilling to accept responsibility for POOR PERFORMANCES! As mentioned by above commenter, I also am NO longer a Ford man.
I wonder how many of those electronics modules were the ones during the “chip shortage”, that stranded unfinished vehicles in massive storage lots. Sync is not bad (especially when coupled with Android Auto or Apple CarPlay), but updates are a hassle for the -average- owner. The process of updating via USB, making sure all of the file names are in the correct folder and unzipped… then expecting you to update with engine running for half an hour. I’m dealing with a Nav update that’s been a real mess… and I know what I’m doing!
BUMMER William Noll. Good Luck on That / Those Update Issues…. I been “TRYING” With F O R D to get the New Blue Cruise Software Installed on my F-150 for TWO YEARS????? F O R D has pretty much thrown their Hands in the AIR and said We don’t know what to Do???? And. I have had an OPEN CASE # now for over a MONTH, Crickets???? Unless “I” Do the Calling…. FORD just Sit’s on there Thumbs and Does… You Guessed it “NOTHING”. What in the WIDE WORLD OF SPORTS is FORD / FARLEY Doing??? Ya….. NOTHING!!!! Very Disappointed with FORD RIGHT NOW!!! $88,000.00 and this is what I get??? CRICKETS???? Or the ever so Famous (Can’t duplicate the Customers Concern)???? B.S.
“They replace modules unnecessarily, et cetera, and that hits our warranty reserves. What we’ve found though is that this kind of fixing is different than mechanical fixes, where that OTA capability redirected to these defects can really reduce our cost outlays for the warranty…against the warrant?????? No Kidding. PPT!!! And Farming out our Electronics to Other “COUNTRIES”????? James Farley is to be the Sole BLAME here!! Sorry, Hire whomever ya want to FIX This MESS, Until that Person IS FOUND…… KEEP REDUCING FARLEY’S SALARY!!! By $100K PER MONTH, and NO GOLDEN PARACHUTE till something Changes, And if it Means HIS JOB….. Asta La Vista BABY….. And you Ain’t coming Back!!!! And this OTA CRAP??? I have a 2022 F-150 LOADED TO THE HILT, running on the Release 1.0 Blue Cruise Software, You ALL KNOW????? The Stuff that DON’T Work!!!! And now one know’s what to do at F O R D???? Just Simply Unacceptable!!! F A R L E Y, Get it together…. OR…. YOUR “FIRED”!!! Without Any Severance PAY of ANY Sort!!! Go Help someone else go BROKE!!! And by the way JIMMY…. “THANKS”….. For Nothing!!!! 👎.
Sync has been a disaster since it was rolled out years ago…not user friendly.
Instead of getting simpler to use, each iteration gets more complicated.
FFS boffins who design it, make it usable for normal humans!!!!
I’m going on my third Sync4 APIM (module) on my 2023 Bronco. Cry me a River on your profit. I paid big dollars for a new vehicle and haven’t been able to use the monitor and everything associated with it (radio, SiriusXM, back up camera, cross traffic warning, settings, manual, etc, etc) half of the time during my first year of ownership. Very frustrating. I had friends that were considering Broncos or other Ford trucks but have changed their minds because of the hassles they have seen me go through.
Farley sounds a lot like Joseph Biden. He never does anything wrong, but is dealing with the mess he was handed. Well, that doesn’t fly in my book. If there are problems with Sync 4 then Dearborn should have a software program to analyze each installation (vehicle) and that program should be in the hands of the dealers. This isn’t rocket science, folks. Farley just jumps from problem to problem, eliminating vehicle lines entirely and ‘de-contenting’ other vehicles to make a few more $$$, while ignoring the customer’s wants and needs. Where’s Mulally when you need him? How about getting a car guy or gal at the top that loves cars and doesn’t worry about the Detroit Railroad Station and the company jet?
Mulally was 100% responsible for the 2012 Focus transmission debacle. He knew of the issues. Engineering said we cannot start production until this is addressed and POS Alan ignored them and the warranty pony show started.
He;s full of it. Ive had some Sync issues but a lot more non-Sync issues.
Ford and Boeing. Both took a dive after Allen Mullaly left. The BUILD quality is the issue. Sync is a false flag. They have no idea how bad the hole they have dug truly is
Jim better be careful. I think there is a countdown to a class action lawsuit coming for Blue Cruise
Hands free driving is Dangerous!!! 500 Miles on my 24 F150 hitting a bump in freeway or dip in Road Truck goes into Search Mode , Wheel going left to right violently. Within Inches of Sideswiping a semi. Happened on I75 in Michigan . I have had the Truck in Dealership 3 times Now, Also Truck Computer was set to go 20 mph over Posted limit. Please Don’t let your kids take on Freeway until you are sure everything is Set Correctly! Waiting again to Hear from Ford service. TY SOUTHGATE FORD FOR BEING COOPERATIVE.
Simple, bring back buttons, duh?
Ford needs to replace Farley ASAP. If not he will put this once great company in a place it may never recover from
Tommy Boy is the dumbest CEO Ford has had and they have had a lot of dumb CEOs.
First kills cars then says consumers need to fall back in love with the same type of vehicle he killed. Then he screwed dealers out of millions and in some cases out of business over his failed EV program because he was in love with Tesla. Now he’s blaming high warranty issues on Sync and not the terrible engines and poor programming destroying transmissions.
This dude has been a complete failure.
Spot on
Thanks to Failure Farley, Ford products now have Alfa Romeo quality/reliability. Expect Ford to have lower 3Q and 4Q profits than is expected due to the millions of recalled vehicles worldwide than have yet to be repaired.