Ford's Warranty Repairs Costs Decline Further in 2008 as Quality Continues to Improve

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• Ford has reduced its worldwide warranty repairs costs by $1.2 billion in the past two years.
• The warranty repair rate for Ford, Lincoln and Mercury vehicles in the U.S. is now almost 50 percent lower than it was in 2004.
• Since 2005, each new model from Ford has consistently delivered better quality than the models they replaced.

DEARBORN, Feb. 2, 2009 – Ford Motor Company’s steady vehicle quality improvement in recent years is beginning to translate into significant savings for the company and far fewer trips by customers to the repair shop.

In the past two years alone, Ford has reduced its warranty repairs costs by $1.2 billion, according to the latest company figures. These savings can be attributed to four straight years of quality improvements on Ford, Lincoln and Mercury vehicles. Ford’s initial quality is now in a virtual tie with Honda-Acura and Toyota-Lexus-Scion for the 2008 model year, according to the latest U.S. Global Quality Research System (GQRS) study.

Ford strives to be best in class in every phase of vehicle development – from design to pre-delivery – internal measures continue to show the company is making significant quality strides.

For example:

• The warranty repair rate for Ford, Lincoln and Mercury vehicles in the United States is now almost 50 percent lower than it was in 2004.
• Ford F-Series Super Duty and Lincoln Mark LT rank atop their respective segments with fewest “things gone wrong” (TGW) and in customer satisfaction.
• Ford Mustang GT500 had the least number of TGWs among sports cars.
• Overall, 18 of 24 Ford domestic brand vehicles posted TGW improvements.

“Ford is following a set of standardized processes around the world in product development, manufacturing and purchasing with a discipline this company has never seen,” said Bennie Fowler, Ford group vice president, Global Quality.

Continued Improvements
The drive to improve quality is most evident during a new-model launch. Since 2005, each new model from Ford has consistently delivered better quality – as measured by warranty rates and things-gone-wrong metrics – than the models they replaced.

“The last 24 months have revealed some our best quality results,” said Curt Yun, director, Global Warranty. “Our new models have been achieving continuously declining warranty repair rates and lower warranty costs, as a direct result of our overall quality improvements.”

In the U.S., for example, owners of Ford, Lincoln and Mercury vehicles have reported fewer concerns at three years in service for each of the past five years, according to the Global Quality Research System (GQRS) survey, compiled for Ford by the research firm RDA Group.

“We’ve reached the point where our initial quality is second to none among the full-line manufacturers,” said Fowler. “We expect that high quality to be reflected in future high-mileage surveys as our new models age.”

Built-in Design Quality
Ford’s Global Product Development System ensures quality is built-in early in the process. It starts with the company’s commitment to develop and implement consistent standardized engineering processes. By fully utilizing Computer Assisted Design toolsets, Ford is signing off on all aspects of its designs even before the first prototype is built.

Ford’s design and engineering analysis processes makes it possible for problems that previously might not have surfaced until launch to be flagged and corrected in the virtual world. Ford uses cutting edge virtual tools to verify up to 40,000 design standards in its Virtual Engineer Lab. Virtual technology also is used to confirm that the product can be manufactured with quality in the assembly plant for which it is slated.

Manufacturing Quality Process
Ford also provides assembly plant teams the necessary tools to deliver quality in the manufacturing process. For example, the company’s Quality Operating System (QOS) is critical for identifying and correcting problems within the manufacturing facilities.

QOS is implemented in each plant by Variability Reduction Teams (VRT) – cross-functional groups of engineers, plant management and product specialists, including the company’s most skilled problem solvers who’ve been trained through Six Sigma. Each team is assigned to one of 12 vehicle subsystems crucial to customer satisfaction, such as paint or body interior, and examines every detail, looking for imperfections so slight that even the untrained eye, or ear, could not detect them.

For example, Ford’s 2010 Taurus was subjected to rigorous testing for squeaks and rattles at each design phase. Every inch of the vehicle was scrutinized for unwanted noise from the outside in, down to the sound of the Easy Fuel™ Capless Fuel Filler door when it’s closed.

Another example includes the development of Ford’s new fuel-efficient 3.5-liter EcoBoost V-6 engine. By the time the first twin-turbocharged, direct injection engine is decked to a 2010 Lincoln MKS this summer at the Chicago Assembly Plant, the equivalent of more than one-million grueling test miles will have been logged by EcoBoost prototypes.

Ford also uses a process called Early Claims Binning to help streamline communications about potential quality issues between plants and dealerships. Warranty claims are fed to the assembly plant every day where the issue is dissected and either traced back to the installation process and addressed on-site or fed back to the design engineer for resolution in design.

Customer-driven Quality
Ford’s commitment to deliver the best quality possible for its customers is unwavering and the company is committed to pushing its quality levels even higher.

As Ford’s newest vehicles hit the road, company officials expect warranty claims to continue their downward trend.

“I see the recent $1.2 billion in worldwide warranty cost savings as a compelling reason to continue down this path,” Yun said. “Instead of setting aside those funds to fix cars, we’d much rather invest it in exciting product programs for our customers.”

Ford’s commitment to world-class quality extends beyond preventing things that go wrong. Customer-driven product features, such as fuel economy, craftsmanship, and quiet interiors are designed into the vehicle to deliver an exceptional and affordable ownership experience.

“This is One Ford at its best,” said Fowler. “It has taken thousands of dedicated people, from the plant floor to the executive suite, working together to strive for quality every day.”