Ford hits quality milestone, aims for perfect new car launch

Detroit — ford motor The company regularly touts itself as a cornerstone of American manufacturing, business and trucking leadership with its best-selling F-Series pickups, but it has also led the nation in areas it’s less proud of: vehicle recalls and quality issues.

Over the past decade, they have hurt the Detroit automaker’s bottom line, eroded customer confidence and tarnished Ford’s reputation. After setting an industry record with 153 recalls for 13 million cars and trucks in 2025, the company has issued 53 recalls for more than 12 million vehicles so far this year.

But that time is coming to an end for Ford, as the automaker achieved key quality milestones, CEO Jim Farley told CNBC in an exclusive interview. He said Ford has learned from past mistakes and will use that knowledge to try to perfect its suite of new products over the next few years.

“Our best days are ahead of us as we continue to execute this quality turnaround for our investors, employees and customers,” Farley said in a phone interview. “We’re going to be introducing all new vehicles across our North American product line in the next few years, so we have to launch that all-new lineup perfectly.”

Doing so will be a difficult task. Launching new cars, especially those with new technologies such as software-defined systems or electric powertrains, is complex, and one issue can have a ripple effect across the product line.

It’s something Farley knows all too well. Such issues cost Ford billions of dollars during his nearly six-year tenure at the company’s helm.

The automaker this week recalled 741,195 SUVs and F-150 pickup trucks of various model years from 2018 to 2021, adding to the recall total for 2026.

Investors are closely monitoring the issue, saying unnecessary warranty costs pose a risk to the company’s guidance and future business plans. Warranty costs are costs incurred by automakers to cover repair, replacement, and other costs if a defective part or manufacturing occurs within a certain period of time or mileage after a customer purchases a new vehicle.

Ford said it is targeting a $1.5 billion reduction in warranty and material costs in 2025, adjusted for volume and mix, and further reductions in warranty and material costs in 2026. This comes after the company’s warranty costs hit a peak of $4.8 billion in 2023.

“While warranty costs have clearly been a drag on earnings over the past few years, Ford appears to have ‘turned the corner,'” Barclays analyst Dan Levy said in a May 15 note to investors, noting that warranty earnings have increased year-over-year for the fourth straight quarter. “While we believe the warranty improvements in the first quarter are encouraging, we believe further improvements are still needed.”

Last week, the company received external recognition for its years of efforts to improve product issues after J.D. Power’s initial quality rankings named the Ford brand the top mass-market brand in the United States.

Ford shares have risen 2% since the news was announced on June 25, marking the company’s second-best trading day of the month.

This is the first time since 2010 that Ford has led mainstream brands in the influential study, which evaluates the expected quality of new vehicles based on owner-reported problems within the first 90 days of ownership. Ranked 23rd in 2023, Ford ranks third among all brands behind luxury manufacturers Porsche and Hyundai Genesis. Toyota came in fourth place before the Lexus brand.

Ford made improvements in nearly every vehicle category of initial quality measured by JD Power, including software, infotainment and powertrain.

The approval comes as Mr. Farley ramps up efforts to restructure Ford’s leadership team, including bonuses and incentives. Focus on quality. And modernize your own processes as well as those of your suppliers and other partners to more proactively identify potential issues.

“I’m very proud that an American car company can beat the world on initial quality, but obviously none of us are satisfied,” said Farley, who worked at Toyota for nearly 19 years before joining Ford. “We still have a lot of work to do to become the number one quality brand in every aspect.”

Farley said Ford must continue to improve its reputation for overall quality, including long-term durability, as well as reduce warranty costs and future recalls.

In the J.D. Power U.S. Vehicle Reliability Study released in February, Ford and its luxury brand Lincoln ranked 18th and 19th, respectively, well below the industry average. This study examines vehicles over a longer period of time.

Farley declined to predict when Ford, which has led U.S. recalls since 2024, would lose its position, saying it can’t control what happens with older vehicles or the quality efforts of its competitors. But he said everything the company is doing “will definitely lead to a significant reduction” in future recalls for current and future products.

“The ultimate measure of success is whether we can do that over five or 10 years from launch through all kinds of economic cycles,” he said. “Everyone wants answers quickly, but when it comes to quality, the most important measure of success is time.”

A recall is when a company corrects a mistake that was discovered or unrecognized during the development or production of a vehicle. These range from mundane issues like visor labels and software updates to serious issues that can be fatal to consumers.

Ford’s recent quality efforts have focused on catching problems in vehicle development as early as possible, and Farley said this has meant structurally reorganizing the company’s processes.

He introduced a new organizational structure, hiring 350 technical experts starting in 2023, holding more daily meetings, encouraging closer collaboration with suppliers and implementing more rigorous testing throughout the vehicle development process.

Ford also changed its bonus structure, tying executive compensation more closely to quality metrics. swirl and johnson controls They brought additional quality expertise.

Ford still has to deal with issues along the way. After introducing new artificial intelligence tools to detect problems, the company ultimately had to bring back so-called veteran “grey-bearded” engineers to mentor younger staff and better train the AI ​​models.

“We’ve found in the past that Ford has restructured the company to save money, but also laid off experienced supply chain, manufacturing and engineering talent,” he said. “Bringing those people back complements all of this AI technology.”

For many companies, it is becoming increasingly clear that while AI can increase productivity for many tasks, it may not be as effective if it is not properly trained and deployed to assist human employees in their work.

Farley said that while Ford’s commitment to quality is a never-ending journey, the company is about halfway through its latest turnaround effort under the Ford+ Business Plan and believes the company’s future is starting to turn around.

“After 40 years, we know how important quality and durability are and how difficult it is to be the best, but right now it’s in its infancy,” Farley said. “We can’t lose this momentum. This has to be a culture.”