It’s no secret that Ford has faced a bevy of quality woes in recent years, leading to it being the most-recalled automotive manufacturer on multiple occasions. Aside from being a massive inconvenience for owners, these problems have also cost the company countless dollars in terms of warranty costs, which has hampered its bottom line in a big way. Ford CEO Jim Farley has worked to rectify these issues in a variety of ways in recent months – including tying quality metrics to management bonuses – and it appears that this move is set to cost those folks a solid amount of money.
According to Reuters, Farley has informed Ford management that bonuses will be cut to 65 percent of their total while speaking at a town hall event this week. “I’m proud of the progress but we’re not satisfied at all,” Farley said, adding that these bonus payouts may change based on Q4 results. “When we meet or exceed our targets for those factors – and we achieve the ambitious goals of Ford+ – the team is rewarded,” a Ford spokesman said on Thursday. “We are focused on lowering our costs, improving our quality and making Ford a higher growth, higher margin, more capital efficient and more resilient business.”
There are some signs that Ford quality has improved over the course of 2024, with Farley previously stating that the automaker’s latest model year lineup has better initial quality than prior years. Additionally, Ford ranked above the mass market segment average in the 2024 J.D. Power U.S. Initial Quality Study (IQS) after making a significant improvement on its 2023 results in that same study, with the previously-problematic Ford Explorer even ranking second in its segment.
In addition to using artificial intelligence on its assembly lines to spot problems early in the production process, Ford has also implement quality checks for refreshed and redesigned models that have thus far saved it from issuing even more recalls. Regardless, after taking over as CEO of Ford a few years ago, Farley has also admitted that he regrets not moving to rectify these quality issues sooner.
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