Ford (Finally) Discovers Quality

Ford has announced that focusing on quality saves money. Too bad it took them so long to find out.

The automaker just issued a news release stating that the warranty repair rate for Ford, Lincoln and Mercury vehicles in the United States is now almost 60 percent lower than it was in 2004, and that this falling repair rate contributed to a $1.2 billion reduction in Ford’s worldwide warranty costs over the past 18 months.

“It all starts with the company’s commitment to developing and implementing standardized engineering processes,” says Art Hyde, chief engineer, Global Product Development System. “By fully utilizing our (Computer Assisted Design) toolsets, we are signing off on all aspects of our designs before we even release the first prototype.”

Hyde says the design and engineering analysis process makes it possible for problems – that previously might not have surfaced until launch – to be caught and corrected in the virtual world.

“We’re using some of the same software and equipment as our competitors, but how and when we use it has given us a competitive advantage,” Hyde said.

A competitive advantage? Really? I imagine executives over at Toyota are having a good laugh over that one. Didn’t the Asian automakers steal vast amounts of market share from the Big Three over the last 50 years by producing better quality vehicles? And didn’t they (or at least Toyota) do so by recognizing that defects and the work required to fix them are waste?

Don’t get me wrong. I’m glad Ford is producing better cars and saving money on warranty costs. And I know that the quality of its cars (as well as those of GM and Chrysler) has improved to the point where it just about matches the quality of Japanese cars.

However, don’t tell me Ford is gaining a competitive advantage on quality. They may have caught up with their competitors on quality. But they haven’t passed them.