Back in the 1980s, Ford’s ad campaigns ran on the idea that quality was “Job One.” If there was ever a time for truth in advertising, it’d be now, when Ford’s pervasive manufacturing issues keep costing it billions of dollars every year. On today’s morning news roundup, we lead with just how Ford is trying to get it together on the quality front.
Also on today’s docket, we have Mary Barra’s big payday; some tough news for General Motors on the chip shortage front; and more on Elon Musk’s price-cut strategy at Tesla, which may depend on being able to deliver one of his biggest and most ambitious promises. There’s a lot going on—no Bare Minimum Mondays in The Autopian’s Blog Mines—so let’s get into it. [Editor’s Note: What the hell? Bare Minimum Mondays are a thing? That’s it, I’m going to be keeping a close eye on our Monday numbers. A close eye! -DT].
Ford Tries To Raise The Bar, Starting With The New Super Duty
It’s a tough time for Ford Motor. In addition to undertaking the same electrified and digital transformation as almost every other automaker, it’s having to address quality and reliability issues at the same time—two major undertakings, but the first one cannot happen without the second.
After all, Ford had to post a $2.2 billion loss for 2022 and a good chunk of that can be attributed to $4.17 billion on warranty claims that year alone. (Yes, that’s a lot.) Basically every new Ford vehicle launch in recent years has seen quality issues, costly recalls and upset customers. That’s not what you want when you’re try to roll out a ton of new products, chase Tesla on the EV front and convince buyers and investors alike that you have what it takes to survive long-term.
CEO Jim Farley is one of the sharper guys in the business right now, so you know he knows his ass is on the line to fix this. How could it not be? So today we have a good deep-dive from Reuters into what’s being done to fix these quality issues, starting with the new Super Duty truck line at its Louisville, Kentucky plant.
There’s no single magic bullet here, but a lot of different, detail-focused initiatives. Those include adding quality inspectors, using more cameras for detailed inspections, driving a higher percentage of vehicles to check for defects and even halting the line to catch problems if necessary—a last-ditch move that can cost millions of dollars. But it’s being done here if that’s what it takes:
As part of a new approach to stamping out quality demons, Kentucky Truck Plant manager Joseph Closurdo said he stopped production for as long as three days earlier this year. The halts gave engineers and suppliers time to fix defective parts discovered as workers began building a new generation of Ford’s highly profitable heavy-duty pickups.
“We would shut the build down if we weren’t meeting one of the targets” for quality, Closurdo said on the plant floor last week.
Halting the assembly line rather than building trucks and fixing them later was just one element of a new approach to attacking quality problems that Ford is road-testing with the launch of the redesigned Super Duty trucks.
[…] Instead of test-driving a small sample of trucks to check for squeaks, rattles or infotainment system glitches – problems that take down scores on external quality surveys – Kentucky Truck deployed workers to drive 28,000 of the first new-generation Super Duties along a 25-mile (40 km) route near the factory.
“If it’s got a button, touch it. Make sure it works,” said David Jones, a member of the test-driving team and a 34-year Ford veteran whose father also worked at Kentucky Truck.
The story says that Kentucky Truck’s two lines are now running at close to full speed, cranking out an array of trucks and SUVs about once per minute. And the quality lessons learned here will soon be rolled out to other plans like the one making the new 2024 Mustang.
With any luck, these improved tactics will cut down on Ford’s recall headaches. It literally cannot afford to keep getting this wrong.
Mary Barra Takes Home The Big Three Payday Crown Again
Speaking of American auto industry CEOs, GM’s Mary Barra kept her title as the highest-paid chief executive in 2022, although it was down a few hundred grand from the previous year. (I hate it when that happens.) This detail comes to us from Securities and Exchange Commission filings reported by The Detroit News.
Here’s how much money car company CEOs make, if you’re curious:
Barra, 61, received pay last year of $28.97 million, down slightly from her 2021 compensation of $29.1 million. Even with the decrease, her 2022 compensation was more than both of her crosstown rival CEOs.
In late March, Ford Motor Co. reported that CEO Jim Farley, 60, made nearly $21 million in total compensation in 2022 — down 8% from 2021. Carlos Tavares, 64, CEO of Stellantis NV, maker of Jeep SUVs, Ram pickup trucks and other vehicles, received $24.8 million in 2022, a 22% increase from 2021.
[…] Pay for other GM executives in 2022 included:
Paul A. Jacobson, executive vice president and chief financial officer, $10.2 million in 2022, up from $9.57 million in 2021
Mark L. Reuss, president: $14.3 million, up from $12.5 million in 2021
Douglas L. Parks, executive vice president, global product development, purchasing and supply chain: $8.77 million, down slightly from $8.83 million in 2021
Stephen K. Carlisle, executive vice president and president, North America: $8.79 million, down slightly from $8.98 million in 2021
Barra’s had quite a run from the ignition switch scandal to the rapid electrification effort GM’s now undertaking, and I think she’s one of the best CEOs that automaker has had (independent of the fact that the bar for that is extremely low.)
But GM Is Struggling With Chips
But GM’s big electric push can be summarized in two words: “It’s coming.” The Cadillac Lyriq EV is barely anywhere right now production-wise [Editor’s Note: I saw out of my BMW i3’s window Jamie Lee Curtis driving hers in LA just the other day. -DT], the GMC Hummer EV is experiencing serious quality problems (and it’s patently ridiculous), the Chevy Bolt just entered hospice care and the Equinox and Silverado EVs are all still forthcoming. I think this rollout is due to be slower than GM’s been hyping it up to be.
And let’s put aside EVs and just talk normal cars for a second, too. According to a new study reported on by Automotive News, GM’s plants rank among the very worst hit by semiconductor shortages. This all bodes poorly for sales, profits and costs to the consumer:
The 11 GM plants — seven in the U.S., three in Mexico and one in Canada — have cut 327,148 vehicles in total from their production plans in 2023, according to AutoForecast Solutions, which has tracked the disruption of the chip shortage since it began in 2020. That figure accounts for about 58 percent of all chip-related North American production losses in 2023, and about 29 percent of the global total.
Emphasis mine up there, because holy shit. You don’t hear much any more about the chip shortage—I think it’s the kind of pandemic-related news we all know about and almost ignore now—but it’s still very much a thing. And GM’s feeling some of the worst of it.
Tesla’s Price Cuts Hinge On Autonomy And Subscriptions
Finally, here’s the Wall Street Journal’s Tim Higgins on the larger strategy behind these crazy rapid-fire Tesla price cuts we’ve seen all year. It’s not just about gobbling up market share—not entirely, anyway.
Musk’s plan apparently relies on a much-discussed and so far much-loathed possible key to future auto industry revenues: subscriptions. Basically, the plan is to get as many Teslas into people’s hands as they can right now, so they can charge them later on for subscriptions to the so-called Full Self-Driving tech:
Some fear Mr. Musk is picking a page from the industry’s dusty old playbooks by chasing a crown of global sales leadership, potentially at the expense of profit margins.
Mr. Musk maintains he is making a 21st-century gamble that he can, over time, profit from future software subscription-style revenue from Tesla owners, including for autonomous-driving capabilities.
“We do believe we’re…laying the groundwork here and that it’s better to ship a large number of cars at a lower margin and subsequently harvest that margin in the future as we perfect autonomy,” Mr. Musk said last week.
His argument is akin to Apple Inc.’s with iPhones and App Store sales: The bigger the fleet of Tesla vehicles sold today, the more potential for higher-margin software profits in the future.
The plan’s not unprecedented. Hyundai is hoping subscriptions will make up some 30% of future profits. But Tesla’s really the only major automaker still making big, bold, “just around the corner” promises when it comes to autonomy.
Full Level 4 self-driving, depending on who you ask, is somewhere between five years and a century out. The people saying “five years” are typically those who were saying the same thing 10 years ago, and there are fewer of those voices now that Argo AI and other firms have gone kaput.
But Musk remains extremely bullish on autonomy. In many ways, it’s the boldest claim he’s ever made, and for him that’s saying a lot. He’s the one who once promised drivers five figures’ worth of annual passive income from Tesla robo-taxis and made the claim that Tesla would be effectively worthless if it can’t solve self-driving. Clearly, he isn’t giving up on that if “perfecting” Full Self-Driving is the reason behind these price cuts, which have dug into the profit margins Tesla investors love so much.
Well, I’ve used Full Self-Driving (note: Tesla’s cars are not “self-driving” and in fact no cars on sale today are) and it’s like teaching a terrified 15-year-old to drive after they’ve been secretly raiding mom and dad’s liquor cabinet all afternoon [Ed note: This is hyperbole, of course — I feel I need to clarify this given the passionate nature of Tesla stans. -DT]. If this is the plan, Musk and company have a long way to go.
Your Turn
What’s the worst quality issue you’ve experienced on a new car? I’ve been fairly lucky on that front, although I owned an R56 Mini Cooper for several years and I can tell you that some stereotypes are true for a reason.
Give me a break. If you think Chris Farley or Hanna Barbera Mary have earned their companies a dime a share over where they are you are nuts. These manufacturers fight to pay executives more money than the other they take pride being able to pay failures more money than anyone should be paid. I say cut the top management, cut thec2nd level sycophants, hire the best in the 3rd tier a reasonable pay but options to increase that on real improvements. Barley Farley cant do a decent intro of a new car ever? Give him a hundred million so noone hires him away. How about hiring a real car guy pay a real wage and bonuses based on profitability after warranty claims? These top people aint worth shit. I could do a better job drunk throwing darts at a board. Oh also Ford should their next union contract mention their union workers are fuvking drunk idiots and no increase until the guys with 30 years experience learn to build cars.
How I’d fix Ford’s quality problems:
In House more stuff.
I’d transition into making commercial vehicles that the public want to buy.
I’d stop making cars with automatic transmissions. Ford couldn’t build a reliable and durable automatic transmission to save their company from bankruptcy if they had to. Instead I’d make planetary e-CVTs (like what is in most of Toyota’s hybrids and in the new Maverick Hybrid) standard as they are more efficient while being simpler, more durable, more reliable, and cheaper than modern automatic transmissions.
With the new planetary e-CVTs being standard we could get rid of the overstressed ecoboost engines and replace them port injection naturally aspirated engines that when combined with the e-CVTs have just as good of performance specs if not better while being better in basically every other way for cheaper.
If you don’t want an e-CVT you better learn how to drive stick.
Then fire all of the bureaucracy who didn’t help.
This is why we need down votes. They build unreliable cars because senior union members are drunk and no nothing about building cars. Unions are a joke and ee need to quit supporting them making more money and not doung any job.
Not surprising that an anti-union post would be rife with typos and incorrect word choice.
Not the biggest fan of unions but ultimately quality is management’s responsibility. Period. I don’t care how good a worker you are – you can’t assemble a Tiger out of Pig parts. So first you need a good design made from quality materials.
A good design is built with durability in mind and with ease of assembly too. Again, great assemblers can’t do anything about a lousy transmission design, and can’t build a good design properly if you don’t give them the tools or the time.
Next: If you know your workers aren’t able to assemble the components correctly in the time you give them, you either need to give them more time or replace the workers.
Time to task allotted is entirely within management control.
Replacing the workers who don’t perform satisfactorily is also management’s responsibility. Of course the union will fight to save the workers but that’s their duty. However, the fact that the union will fight doesn’t relieve management of their responsibility to fix or remove problems (including workers) who negatively impact quality. I don’t care if the workers drink. I DO care if the workers are drunk to the point of not being able to perform their tasks quickly and properly…and safely. Guess whose job it is to remove drunks from the work floor?
Who said I was pro union?
I knew someone who was building transmissions for Chrysler while they were addicted to meth, though I’d rather choose a product built by someone on meth than someone who is drunk.
Interesting. I’d say that this is why we need downvotes.
Speaking of Ford quality and worst quality issues… the brand new 2013 Fiesta I bought as my first new car. Within 20 months, I had 8 trips to the dealer for warranty repairs. 4 times for brakes that would squeal when you weren’t braking, three times for the PowerShit transmission, and the final straw was a shorted out wiring harness in the dash. I traded it in for a new Kia and have only bought Kia and Hyundai since. Ford lost a customer for life over that shitbox.
I’ve owned multiple late 90s VWs. I loved the VR6, but everything else was shit.
I’m currently enjoying Jeep’s famous bubbling paint fiasco on our ’20 Wrangler. Starting just around the 2 year mark the paint around most of the hinges started to bubble/blister (looks just like it’s rusting out). For their credit after 4 years Jeep seems to have made a parts change, but that’s 4 years of warranty claims on brand newish expensive Wranglers needing body work for many! Didn’t think I’d be fighting paint/corrosion gremlins in a vehicle under three years old.
That’s the David Tracy appearance package.
Even DT knows better than to mess with dissimilar metal corrosion.
That’s what happens when the idiots at Jeep bolt a bare steel door hinge plate to a bare aluminum door then paint over the both of them. Dissimilar metal corrosion has killed many a Land Rover, so many that it’s damn near unbelievable that Jeep could overlook it. Having two dissimilar metals together accelerates the corrosion of both metals.
I’ve seen an aluminum Land Rover bet corroded through as if rust did it due to dissimilar metal corrosion.
If I had a new Jeep I’d replace the doors with steel or fabric ones.
*bed not bet
Actually according to several columns here the paint quality has deteriated every year.
My worst was my ‘23 Wrangler 4xe (an $80k car!) – brake booster failed with <900mi and 5 weeks… which took 100+ days to fix since Jeep didn’t want to ship the part from OH to NY (I think they were keeping their stock to churn out new 4xe’s before the fiscal incentive change).
I reluctantly lemon-lawed my 4xe and now drive a used 3.6 v6 Wrangler that’s out of warranty, so I hope I’ll never have to deal with FCA in that capacity.
Well… unless you count my two-stroke Aprilia RS 125 that was towed 15 times in its first year due to mechanical failures. If you count that, then that’s arguably worse ????
The 4xe costs $80,000??!!
Just buy a 392 at that point, wow.
Worst quality issue on a new car? Window motor regulators (the dipping feature) on my 2003 Mini Cooper S. 3 dealer trips before fixed (under warranty, thankfully).
I want Maximum Bear Mondays. Like Bear Friday, but MAXIMUM. Like Fat Bear Week, except every week. BIG BEARS. SHOW US THE BIG BEARS.
I vote for it to be BEAR day everyday. Just makes sense. And Duck days on months with 31 days in them too.
I mean, every day is Chicken Day when you live, breathe and cluck* chickens, too.
*not a euphemism, actual clucking
Obscene pay for those “executives” for making shitty cars.
Perhaps each CEO deserves something more like 1-2m is appropriate.
The problems are way before the production line!
Remember when Toyota taught GM everything (NUMMI), and they learned absolutely NOTHING!
Barra is the best Detroit CEO since Alan Mulally, two of only maybe a handful of decent executives in US automotive history.
Too bad Ford can’t rebadge Mazdas anymore, since Mazda was spun off.
Glad all 4 of the new Fusion Sports on the dealer’s lot were dead when I went to look at one back in 2017. As cool as a turbo V6 with AWD would have been, it would have been no good spending a lot of time in the service dept. Later found out the electric system in those cars as defective and took Ford over a year to figure that out.
If it only takes 25 miles of driving for quality issues to surface, Ford’s got a much bigger problem.
That’s what I was thinking. What the hell is showing up on the line or within 25 miles of driving?
The Ford quality issues are real. I took delivery of a brand new Bronco last week, sporting a whopping 8 miles on the odometer. On my second day of ownership the sound deadening liner on the interior roof decided to depart the roof and reside on the seats below.
I was able to stick it back up into position, but WTF? (Other than that the vehicle is a hoot to drive!)
And so it began…
I encountered Ford’s stellar quality in ’97 when I bought a brand spankin’ new Ford Contour SE V6 5MT when I was fresh out of college. The WORLD CAR! Heralded amongst all the contemporary car mags as a “must have”.
Sure, on paper it was, but after 85 days in the shop over the next few years, and after all mechanical and electrical systems suffering an issue at some point or another, I won a lemon lawsuit, and promptly dumped it for a new Audi A4.
I vowed then and there to never darken the doorway of another Ford dealership. Their culture of crap-quality is not a recent development.